Bitcoin: What’s the difference between sats/byte and BTC/kB?

Understanding Bitcoin Fees: A Guide to Converting Sats and BTC/KB

The world of cryptocurrency can be intimidating, especially when it comes to understanding fees. Two popular terms that come up often are “sats” and “BTC/kB,” but what do they really mean? In this article, we’ll break down the difference between sats/byte and BTC/kilobyte (KB) to help you convert between these two units of measurement.

What is a kilobyte (KB)?

A kilobyte (KB) is a unit of digital information that measures the size of files or data in megabytes. One kilobyte is equal to 1024 bytes. In Bitcoin Core, which displays block explorer fees, one byte is equal to 1/1024 of a kilobyte.

What does sats mean?

Sats is a native cryptocurrency used for mining and transactions on the Bitcoin blockchain. The total supply of satoshis (the smallest unit of satoshi) is capped at 21 million, meaning that no more new satoshis will be created. Each satoshi is worth approximately $0.00018.

The fee, expressed in satoshis/byte, represents the amount of Bitcoin that a miner must pay for validating transactions and securing the network. When a transaction is processed, the miner calculates the fee based on the cost of mining equipment, energy consumption, and other factors. The fee is then divided among the network participants involved in processing the transaction.

How ​​to convert from sat/byte to BTC/kB?

To convert from sat/byte and BTC/kB, consider the following:

• Kilobyte (KB) = 1 byte

• 1024 bytes per kilobyte (or 1 KB)

• 1 kilobyte (KB) ≈ 0.000937 satoshis (based on the current Bitcoin price)

Using this approximate conversion factor, here’s how to convert:

• BTC/kB ≈ sat/byte × 0.000937

• Example: Let’s say a miner charges $5 per byte. In this case:

+ BTC/kB ≈ $5 / 0.000937 ≈ 5,357 satoshis / KB

Please note that this conversion is approximate and may not be entirely accurate due to the complexity of Bitcoin network fees.

Conclusion

In conclusion, understanding the difference between sats/byte and BTC/kB is essential to making informed decisions about cryptocurrency investments. By understanding these two units of measurement, you will be better equipped to navigate the world of Bitcoin taxes and make more informed decisions about your digital assets.