Since 2009, Bitcoin’s price has skyrocketed. Today, you need to pay tens of thousands of dollars to purchase 1 Bitcoin (BTC). Back in the day, you could easily buy a Bitcoin or two for a couple of dollars. But nowadays, with a single Bitcoin being worth so much, not every investor or crypto enthusiast can afford to. Luckily, you don’t have to – as you can buy parts of Bitcoin.
If you are an experienced investor in the cryptocurrency field, you probably don’t think it’s weird to buy and trade, for example, 0.1 Bitcoin. But thinking in terms of decimal points is not intuitive. It makes Bitcoin harder to compare to fiat money which could be intimidating for newcomers, and it could lead to confusion in daily transactions. And that’s where mBTC comes in.
What Is mBTC?
One mBTC, also known as a millibitcoin (not to be confused with the cryptocurrency MiniBitcoin (MBTC)), is one-thousandth of 1 BTC.
1 mBTC = 0.001 BTC
And one uBTC, also known as microbitcoin, is one-millionth of 1 BTC.
1 uBTC = 0.000001BTC
Why Do We Need These Abbreviations?
First of all, Bitcoin is penetrating daily life more and more. Many companies already accept payments in cryptocurrency. For practical purposes, such metrics are essential.
Secondly, as the mining industry is growing, the miners that are competing with the centralized, giant mining farms sometimes mine around a couple of coins a month. That’s why we need this sort of lingo – so it’s easier for us to talk about daily profits in the mining business.
The same logic can apply to daily life, where we tend to spend smaller units of money than what a single Bitcoin is worth. Let’s say you want to buy yourself a coffee at Starbucks, and the price is the equivalent of $3, which is around 0.000018 BTC. The number of zeros in that one is a bit confusing for a daily purchase. 0.018 mBTC is less confusing. 18 uBTC is even better since you don’t need to count the zeros correctly. Moreover, spending 0.000018 BTC doesn’t feel that different from spending 0.00018 BTC. However, you would never miss the difference between paying 3 USD and paying 30 USD for a coffee. So, like we need cents alongside paper bills in fiat money, we need smaller units of cryptocurrencies to make things easier.
Apart from in daily transactions, the number of zeros after the point could also lead to confusion in the cryptocurrency environment, for instance in Bitcoin transactions and withdrawals in Bitcoin exchanges. For example, the minimum amount of BTC you can send on Coinbase is 0.0001, which we could also call 10 mBTC so it’s easier for us to wrap our mind around how much that is worth.
Lastly, be it a centralized mining farm or a solo miner, there is a huge industry behind cryptocurrency mining. Because that industry has become unbelievably profitable since Bitcoin’s price skyrocketed, it has led to the proliferation of a number of devices and software for mining cryptocurrency. The terms millibitcoin and microbitcoin are very useful for comparing and evaluating the efficiency of these products.
As Bitcoin becomes more widespread, suggestions for even more crypto denominations are popping up all over the internet.
In cryptology lingo, Satoshis & Bits are used to refer to even smaller denominations of Bitcoin.
A “Satoshi” or “Sat” in short, named after Bitcoin’s creator, is the smallest fraction of Bitcoin that can be recorded on the blockchain. It is equal to one hundred millionths of a Bitcoin (0.00000001 BTC).
A “bit” is another term used for a millionth of a Bitcoin (0.00001 BTC).
Overall, here is what you should know about the units.
mBTC = 0.001 BTC
uBTC (bit) = 0.000001 BTC
Satoshi = 0.00000001 BTC
Where Can You Buy mBTC?
The smallest amount of Bitcoin you can buy depends on the policy of every exchange. For instance, on Coinbase, the smallest amount of Bitcoin you can buy needs to be equivalent to 2 units of your local currency, that is to say, 2 US dollars if you are residing in the US. On PancakeSwap, this amount is also 2 US dollars, while on Binance, it’s 15 US dollars.
So where you can buy mBTC really depends on the value of Bitcoin, because the minimum amount of BTC you can buy depends on the current price of BTC in terms of fiat money. If we assume that BTC is around 50,000 USD, that makes an mBTC worth around 50 USD, which you can easily buy on any trading platform. But if the exchange rate of Bitcoin falls dramatically, let’s say under 5,000 USD, then we start talking about where we can buy mBTC.
When you trade or exchange cryptocurrency, you don’t always match the transaction amount to the last digit of Bitcoin you have. Some fraction of a Bitcoin usually is left in your wallet. This is called crypto dust. It is an unusable fraction of cryptocurrency that is leftover from your crypto activity.
The dust limit is the minimum amount of cryptocurrency that you can trade. Like the minimum amount of Bitcoin you can buy, it depends on the policies of the exchange platform. But in general, it’s determined to be 564 satoshis, which is equivalent to 0.00546 mBTC.
A Few Words Before You Go…
We are still adapting to virtual currencies and their implications on daily life. As digital money becomes a more integral part of our lives, our language inevitably will adapt to this evolution of our financial system. It is only a matter of time before we create a whole language not only around Bitcoin but also around altcoins such as Ethereum (ETH), Ripple (XRP), and many others. As we create and use digital currency, our language will evolve around it because humankind always finds ways to communicate more efficiently.
However, changing the terminology around Bitcoin units is a gradual process. For now, even though there are many proposals on forums, we haven’t come to a general agreement. So, as a disclaimer, even though these terms are widely used in the cryptocurrency community, they are not yet formal definitions.