It seems like everywhere you turn these days people are talking about bitcoin. And why not? As the clear leader in the cryptocurrency space, bitcoin is the standard by which all others are judged. It also happens to be the very first commercially viable cryptocurrency ever introduced. And that leads us to the topic of bitcoin units and denominations.

If you were to go to your average cryptocurrency exchange in search of bitcoin currency, also known as BTC, you would be presented with a variety of units and denominations to choose from. You certainly could buy whole coins at more than USD $6,200 apiece, or you could choose something smaller. It is entirely up to you.

To give you a better understanding of bitcoin units and denominations, we have put together a list of the top six questions people ask in regard to this topic. Hopefully you will find them helpful. Here at Coinbet.com, we want our readers to fully understand cryptocurrency as an investment, a way to gamble, or just a means of buying and selling online.

1. What are bitcoin units and denominations?

This is the number one question people ask on this topic. The best way to understand units and denominations is to think about whatever fiat currency your country uses. We will use the U.S. dollar to illustrate, given that it is the world's most commonly used base currency.

The U.S. dollar's starting denomination is the dollar bill. It represents one full unit. You have higher and lower denominations as well. Lower denominations include the penny (1/100), nickel (1/20), dime (1/10), quarter (1/4), and half-dollar (1/2). Higher denominations start with the five-dollar bill. They go up from there to include the $10 bill, $20 bill, $50 bill, etc.

Bitcoin units and denominations work the same way. A single bitcoin is the base unit with a value of 1. There are 12 additional units and denominations; six lower and six higher. All of them are represented in the table below:

Unit	Abbreviation	BTC Value
Algorithmic Max	N/A	20,999,999.9769
Megabitcoin	MBTC	1,000,000
Kilobitcoin	kBTC	1,000
Original Block Reward	N/A	50
Current Block Reward	N/A	25
Decabitcoin	daBTC	10
Bitcoin	BTC	1
Decibitcoin	dBTC	0.1
Centibitcoin	cBTC	0.01
Millibitcoin	mBTC	0.001
Microbitcoin	uBTC	0.000001
Finney	N/A	0.0000001
Satoshi	SAT	0.00000001

The nice thing about bitcoin units and denominations is that they are based on the decimal system. Everything is broken down into units of 10, with the exception of the Current Block Reward which fluctuates with price and demand. At the time of this writing, the Current Block Reward was set at 25.

2. Why the odd difference between Megabitcoin and Algorithmic Max?

This is a great question that has somewhat of a technical answer. A Megabitcoin is valued at 1 million coins while Algorithmic Max is just under 21 million. The relationship between the two doesn't enjoy the same metric relationship as all the other units and denominations. It has to do with the intentionally limited size of BTC.

When bitcoin was first introduced, its creator decided on a limited number of total coins that would ever be in circulation. That limit is 21 million. All those coins are not yet in circulation as some of them are used to reward miners. But once all 21 million are out there, no more will be issued. Hence Algorithmic Max is effectively 21 million as well.

There is some question as to what will happen to the value of BTC once Algorithmic Max is reached. Once all 21 million coins are out there, will the value be negatively affected by the fact that there will be no more coins to be had? Possibly.

Fiat currency would appear to have an advantage here because there is no limit to the amount of currency that could be in circulation. That's why it's possible to take raw materials, use them to create a valuable product, and generate additional cash in doing so. The volume of fiat currency in a market is reflective of the total value of goods and services, so more cash can be minted as wealth is created. You cannot do that with bitcoin.

3. Why are there so many denominations?

To say that bitcoin's creator was a forward-thinking genius is to understate what he really accomplished. The developer known to the world as Satoshi Nakamoto always intended bitcoin to grow in terms of both volume and value. That's why he did not release all 21 million coins immediately. His vision for future growth is what led him to create so many different units and denominations.

Way back when, a single bitcoin could be had for about one U.S. dollar. That is no longer the case. At the time of this writing, bitcoin is valued at over $5,500 per coin. Let's say you want to buy BTC for yourself. Do you have $6,200 laying around? If not, what are you going to do?

By introducing units and denominations, Satoshi Nakamoto made it possible for average consumers to get in on the bitcoin market regardless of how high its eventual price climbed. Even at $1 million per coin, you could purchase a single Satoshi (SAT) for one U.S. penny.

Having so many units and denominations satisfies bitcoin participants at both ends of the spectrum. Average consumers of limited means can purchase lower denominations while investors with considerable wealth can purchase higher denominations. Anyone who wants to get in on bitcoin can do so at whatever level he or she is financially comfortable with.

4. Will units and denominations ever change?

It is not unheard of for countries to change the units and denominations of their fiat currencies. For example, Canada did away with its penny in 2012. The U.S. had a two-dollar bill that was printed and circulated from 1928-1966. A new two-dollar bill was introduced in 1976 and, although the U.S. Treasury no longer prints it, existing bills are still honored as legal tender.

Cryptocurrency is remarkably different in this regard. Bitcoin is specifically designed to remain unchanged in perpetuity. That's not to say that platform developers couldn't change units and denominations down the road, but doing so would be very difficult to do without disrupting the entire blockchain. As such, it really is impractical to change things. It is also unnecessary.

The rationale behind getting rid of units and denominations in fiat currency is convenience. For example, the UK is considering getting rid of its 1p and 2p coins. As the thinking goes, the two coins are not used enough to justify keeping them around. It would be better to get rid of them and then either round up or down to make them unnecessary.

This is not a problem for bitcoin because no physical coins actually exist. They are just digital tokens represented in bitcoin's blockchain. As such, there is no question about convenience. It's not like users are worried about carrying around too many SATs in their pockets. It just doesn't work that way.

5. What are the most commonly expressed bitcoin denominations?

While there are actually 13 units and denominations in total, just three of them are commonly expressed for most purposes. These are as follows:

• Bitcoin (BTC) - 1 bitcoin
• Millibitcoin (mBTC) - 1/1,000 of a BTC
• Microbitcoin (uBTC) - 1/1,000,000 of a BTC.

Anything above 1 bitcoin is usually reserved for miners and investors, due to the high cost of a single coin. The average consumer deals in much smaller denominations for practical purposes. As such, mBTC and uBTC are the two most commonly represented denominations for buying and selling online.

6. What is XBT?

A lot of people confuse XBT with bitcoin units and denominations. XBT is neither. The XBT symbol relates to bitcoin as an investment similar to other commodities. Certain foreign currency exchanges have adopted XBT as a representation of BTC for the simple fact that the 'BTC' symbol doesn't comply with ISO 4217 standards.

Note that XBT is not a separate computer code with a separate blockchain letter. It is only a symbol representing BTC on foreign currency exchanges.

So why develop a new symbol? Because ISO 4217 standards require all symbols for commodities exchanged on a global scale to start with the letter 'X'. This designation lets investors know that they are dealing with a global commodity rather than a regional or local one. And because BTC is traded globally, its foreign currency symbol must also start with 'X'. There is nothing more to it than that.

Summary of bitcoin units and denominations

There's no need to get hung up on bitcoin units and denominations. It's really simple to understand if you compare it to your own fiat currency. The fiat currency you use has different units and denominations so as to facilitate transactions of any size without requiring people to own a lot of currency. That is exactly why bitcoin has so many units and denominations.

Bitcoin was designed to grow. To facilitate that growth, the system needs multiple units and denominations to accommodate different levels of coin ownership. Because bitcoin can be reduced to eight decimal points, it is very accessible to just about anyone in the world regardless of financial resources or income level. That is really the entire thing in a nutshell.