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Crypto Denominations Explained: Sats, Gwei, Lovelace, and Jager

UTC by Beatrice Mastropietro · 8 min read
Crypto Denominations Explained: Sats, Gwei, Lovelace, and Jager
Photo: Depositphotos

Cryptocurrencies are often traded in units of smaller denominations than their base units. These smaller divisions of cryptocurrency allow for more precise pricing and can make it easier to trade fractional amounts of a currency. In this guide, we will explain the most common denominations and what they mean.

If you are new to the cryptocurrency world, you have probably heard a lot of terms thrown around that you’re not quite sure about. “Satoshi,” “Bitcoin,” and “altcoin” are just a few of the strange words you may have come across, and it can be tough to understand what they all mean. For example, “Satoshi Nakamoto” is the name used by the unknown person or persons who developed Bitcoin (BTC), created and deployed the Bitcoin blockchain, and wrote the original Bitcoin whitepaper. Besides, “Satoshi” is also often used to refer to very small amounts of Bitcoin. Below, we will discuss these small amounts in detail. In the crypto industry, they are referred to as “crypto denominations.”

Crypto Units and Denominations Defined

To understand cryptocurrency units and denominations, it is first important to understand what a cryptocurrency unit is. Simply put, a cryptocurrency unit is a standardized measure of value for a particular digital asset. This is similar to how the dollar is the standard unit of currency in the United States or how the euro is the standard unit of currency in Europe.

There are two main types of cryptocurrency units: base units and derived units.

Base units are the primary or base measure of value for a particular digital asset. For example, Bitcoin (BTC) is typically measured in satoshis (or sats), the smallest unit of Bitcoin that can be traded on the blockchain. Ethereum (ETH), on the other hand, is typically measured in Wei, which is the smallest unit of ETH that can be traded.

Derived units, on the other hand, are secondary measures of value that are based on the base units of a particular digital asset. For example, 1 BTC equals 100,000,000 satoshis, and 1 ETH equals 10^18 wei. As such, derived units provide a way to measure larger amounts of a digital asset without using too many base units.

Meanwhile, cryptocurrency denominations are simply alternate names for particular cryptocurrency units. For example, the smallest units of Bitcoin are called satoshis:

  • 1 Satoshi = 0.00000001 BTC
  • 10 Satoshi = 0.0000001 BTC
  • 100 Satoshi = 0.000001 BTC
  • 1,000 Satoshi = 0.00001 BTC
  • 10,000 Satoshi = 0.0001 BTC
  • 100,000 Satoshi = 0.001 BTC
  • 1,000,000 Satoshi = 0.01 BTC
  • 10,000,000 Satoshi = 0.1 BTC

Notably, you will also often see BTC referred to in smaller denominations like millibitcoins (mBTC) or microbitcoins (μBTC).

Similarly, ETH is sometimes referred to in smaller denominations like gwei or Finney. And XRP is sometimes referred to in smaller denominations like drop or mark.

There are a few reasons why crypto projects might opt to use denominations.

Firstly, it can make it easier for users to understand prices. This is because most people are more familiar with dealing in smaller units like dollars or euros than larger units like Bitcoin or Ethereum. As such, using denominations can help to bridge the gap between traditional fiat currency and digital assets.

Secondly, using denominations can prevent issues with precision. For example, if the price of BTC is $10,000 and you want to buy 0.001 BTC, you would need to input “0.00001” into the BTC/USD trading pair on an exchange. However, if BTC were measured in mBTC (millibitcoins), you would only need to input “10” into the mBTC/USD trading pair.

Further, using denominations can make it easier to perform mathematical operations. This is because most people are more comfortable working with smaller than larger numbers. As such, using denominations can help to make complex calculations simpler.

When it comes to choosing which cryptocurrency units and denominations to use, there are a few factors that you need to consider.

  1. First, you need to think about what you are trying to achieve. For example, using smaller units like satoshis or wei might be a good idea if you’re looking to make small purchases with digital assets. However, if you want to make larger purchases or trades, using larger units like Bitcoin or Ethereum might be a better option.
  2. Second, you need to think about what is most comfortable for you. Some people prefer working with smaller numbers, while others prefer working with larger numbers. As such, you should choose the units and denominations you feel most comfortable using.
  3. You must also consider what is most common in the crypto community. While there’s no “right” or “wrong” answer here, using the units and denominations that other market participants commonly use can help make it easier for you to communicate and trade with others.

There’s no correct answer regarding choosing which crypto units and denominations to use. Instead, it’s up to you to decide which option is best for your needs.

Now that you have a better understanding of cryptocurrency units and denominations let’s look at some of the most common ones you can come across.

Bitcoin Denominations

Bitcoins are not physical objects, they are digital units used to purchase goods and services or traded for other currencies. Bitcoin denominations refer to the units of Bitcoin used to measure value.

The most commonly used denomination is the Bitcoin block reward, which is currently 12.5 BTC per block. When a new block is created on the Bitcoin network, the miner who solved the puzzle receives 12.5 BTC as a reward.

However, there are also smaller denominations of Bitcoin used to measure smaller values, such as 1 satoshi (0.00000001 BTC). These smaller denominations are important because they allow for more precise transactions and are easier to use when dealing with very small amounts of BTC.

As you can see, a variety of Bitcoin denominations are used to measure value. Each has a different value, and they’re all useful for different purposes. So, when dealing with Bitcoins, be sure to use the right denomination for the value you’re trying to measure.

Ethereum Denominations

As the Ethereum network and its native currency continue to grow in popularity, so do the various denominations used to measure smaller amounts of ETH. This can be confusing for newcomers to the space, so let’s look at some of the most common ETH denominations and what they represent.

Wei is the smallest unit of Ethereum, it is named after Wei Dai, the creator of b-money, one of the first decentralized digital currencies. 1 ETH equals to 10^18 wei.

Gwei is a denomination of ETH named after Vitalik Buterin, the creator of Ethereum. 1 Gwei equals 10^9  ETH.

Microether is another denomination of ETH and is equal to 1/1000th of an ETH.

Kether is a denomination of ETH equal to 1/1000th of a microether.

With all these different denominations, it can be easy to get confused about how much ETH you have. However, by understanding the meaning of each denomination, you can better keep track of your ETH holdings and know exactly how much you have in each unit.

Cardano Denominations

Cardano has a unique denomination system, which helps prevent confusion and ambiguity when discussing values in ADA.

The base unit of ADA is called a Lovelace, named after Ada Lovelace, the world’s first computer programmer. 1 ADA equals to 1,000,000 Lovelaces. The next unit is a Kilolovelace (K ADA), followed by a Megalovelace (M ADA).

  • 1 K ADA = 1,000,000 Lovelaces (ADA)
  • 1 M ADA = 1,000,000 Kilolovelaces (K ADA)

Cardano also has two smaller units of account, the micro-Lovelace (uLOV) and the nano-Lovelace (nLOV).

  • 1 uLOV = 0.000001 ADA
  • 1 nLOV = 0.000000001 ADA

The Cardano denomination system is designed so that all values can be represented without any decimal points. This avoids ambiguity and makes it easy to understand how much ADA is being talked about.

BNB Denominations

Binance Coin (BNB) is the native cryptocurrency of the Binance exchange. It was created in 2017 to fuel the Binance ecosystem and is used to pay for various fees on the platform, including trading fees, listing fees, and withdrawal fees.

BNB is different from other cryptocurrencies due to its tiered structure. There are three tiers of BNB: Base, Standard, and Elite. Each tier has its own benefits and privileges.

The Base tier is the lowest tier and is meant for new users. It has a lower trading fee than the Standard and Elite tiers.

The Standard tier is the most popular tier and is meant for experienced traders. It has a higher trading fee than the Base tier but comes with additional benefits, such as early access to certain features and exclusive customer support.

The Elite tier is the highest tier and is meant for professional traders. It has the highest trading fee but comes with all of the benefits of the Standard tier, plus even more exclusive benefits, such as early access to certain features, concierge service, and invitations to events.

There are two types of BNB: ERC-20 BNB and BEP2 BNB. The former one is the original BNB token created on the Ethereum blockchain. Meanwhile, BEP2 BNB is the new BNB token created on the Binance Chain blockchain.

ERC-20 BNB can be used to pay fees on the Binance exchange. BEP2 BNB can be used to pay fees on the Binance DEX exchange.

The denomination of BNB is known as Jager, it takes its name after the Binance manager in Telegram. 1 Jager equals to as much as 0.00000001 BNB.

Bottom Line

Crypto units and denominations can seem confusing at first, but they’re quite simple once you understand how they work. In a nutshell, units refer to the base currency in which a digital asset is measured, while crypto denominations refer to smaller divisions of that unit.

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FAQ

What is a crypto denomination?

Crypto denominations are units of digital currency. Denominations help users understand how much they are spending or investing in a particular cryptocurrency.

What are sats?

Sats, or satoshis, are the smallest unit of measurement for a bitcoin transaction. One satoshi is equivalent to 0.00000001 BTC. The term “Satoshi” is named after Satoshi Nakamoto, the creator of Bitcoin.

How many sats are there in 1 BTC?

There are 100,000,000 satoshis (sats) in 1 BTC.

What is Gwei?

Gwei is a unit of digital currency used to purchase goods and services on the Ethereum network. It is named after Wei Dai, the creator of b-money, and it equals 1/1,000,000,000 of an ETH. Gwei is often used to price gas fees on the Ethereum network.

What is Lovelace?

Lovelace is the name given to the smallest denomination of currency on the Cardano blockchain. One Lovelace equals 0.000001 ADA, and is named after Ada Lovelace, who is considered to be the world’s first computer programmer.

What is Jager?

The denomination of BNB is known as Jager, it takes its name after the Binance manager in Telegram. 1 Jager equals to as much as 0.00000001 BNB.

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