A common misconception among people who are new to Bitcoin is that they have to buy an entire Bitcoin, all at once, to get started. This is not true. Since Bitcoin is digital and practically infinitely divisible, you can buy, sell, send and receive fractions of a Bitcoin; you don’t need to transact with a “whole” coin.
Just like all fiat currencies can be broken down into cents, 1 BTC can be broken down into smaller units all the way to eight decimal places: 0.00000001 BTC. This, the smallest possible fraction of a Bitcoin is known as a ‘satoshi’, named after the person or group of people who created Bitcoin. There are 100,000,000 (one hundred million) satoshis in a Bitcoin.
Bitcoin platforms, like Luno, allow you to specify the amount of local currency you want to spend and then give you the equivalent amount of Bitcoin you will receive in exchange for it. For example, if 1 BTC costs 1000 USD and you only have 500 USD to spend, you will simply receive 0.50 BTC.
Inversely, you can also specify the amount of Bitcoin you want to buy. The platform will show you the amount you need to pay in local currency. For example, if you want to buy 0.25 BTC, and the exchange rate is 1000 USD/BTC, you’ll be charged 250 USD.
The price of Bitcoin has gone up significantly in the past few years. As the value of a “whole” Bitcoin increased, to be useful for day to day transactions, people started accounting in smaller units.
Breaking it down into smaller units keeps Bitcoin usable as the price continues to rise. So, if the Bitcoin price keeps increasing by thousands of dollars (which it has been over the past few months) it’s still possible to buy or use small fractions of Bitcoin.
It’s never too late to get started with Bitcoin. Learn, buy and use Bitcoin.
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