A satoshi (or just "sat") is the smallest unit of bitcoin: one hundred-millionth of a BTC, 0.00000001. Every amount that has ever moved on the Bitcoin blockchain is, at the protocol level, a whole number of satoshis.
The short answer
One bitcoin equals exactly 100,000,000 satoshis. There are no decimals on-chain: Bitcoin's software stores every output as a 64-bit integer count of sats, and the familiar eight-decimal BTC format is applied afterward for display. When you send someone 0.005 BTC, the network records 500,000 sats.
The arithmetic behind the cap is tidy: 21 million BTC × 100 million sats each = 2.1 × 10¹⁵ sats, about two quadrillion. That fits comfortably inside a 64-bit integer, which is precisely the kind of margin a protocol designer leaves on purpose.
Where the name comes from
The unit is named after Satoshi Nakamoto, Bitcoin's pseudonymous creator. Nakamoto never used the term; the whitepaper and early code just speak of "coins" and integer base units. The community coined "satoshi" around 2011 as small payments made whole-BTC amounts impractical, and it stuck hard enough that "stacking sats" became shorthand for accumulating bitcoin in small increments.
Sats, bits, mBTC: the denomination ladder
Several intermediate units were proposed over the years; two are still worth recognizing on sight:
Where you meet sats in practice
Fees are the big one. Bitcoin transaction fees are quoted in sats per virtual byte (sat/vB): a price per unit of block space, not a percentage of the amount sent. A typical single-input SegWit payment weighs about 141 vB, so at 5 sat/vB it costs roughly 705 sats regardless of whether it moves $10 or $10 million. Bitcoin fees, explained covers the whole mechanism.
Sats are also the native unit of the Lightning Network's user experience; invoices routinely denominate in sats because whole-BTC numbers are unwieldy at coffee-money scale. And "dust", an output too small to be worth spending because the fee to move it would exceed its value, is defined in sats too (in the region of a few hundred, depending on output type).
Can a satoshi be subdivided?
Not on-chain. The base layer cannot represent a fraction of a sat, full stop. Off-chain systems can: the Lightning Network internally accounts in millisatoshis (1/1000 of a sat) to route fees precisely, but any amount that settles back to the blockchain gets rounded to whole sats.
If Bitcoin's purchasing power ever made one sat too coarse a unit for everyday pricing, subdividing further would require a consensus change: technically simple to describe, politically a much longer conversation.