We all feel from time to time that stinging regret when we see the jaw-dropping price of Bitcoin or bump into another Bitcoin millionaire headline. It’s even more painful if you had a close opportunity back in the early Bitcoin days to make a three-digit investment and get a few hundred bitcoins in return. The thing is that you decisively rejected the idea to invest in such a soap-bubble system with questionable utility.
Well, Bitcoin has proven all skeptics wrong the very first moment it broke the $20,000 barrier at the end of 2016. But there is no room for regrets, though — cryptocurrencies still have a long way to grow, and what’s more, you don’t have to buy a whole Bitcoin to be part of this elite game.
In this article, we’ll list all legit marketplaces where you can invest as much as your pocket can afford thanks to Bitcoin’s divisibility into smaller fractions.
What Is the Smallest Bitcoin Fraction?
A Canadian Dollar is divisible down to 2 decimal places, even though in conversions with weaker currencies, the percentage equation can take up more than two decimals — for instance, 1 Vietnamese Dong equals 0,000056 CAD. This leads to a considerable profit/loss gap when exchanging such unbalanced currencies.
Bitcoin and other altcoins, such as Bitcoin Cash (BCH), Ethereum (ETH), or Litecoin (LTC), which are built on the Proof-of-Work (PoW) protocol, don’t have that problem as their protocol and related software are designed to handle even smaller units due to the fixed coin supply.
The smallest Bitcoin unit is called a satoshi or sat, in honour of Bitcoin’s creator Satoshi Nakamoto. One satoshi divides Bitcoin down into 8 decimals, which means that it denotes a value of 0,00000001 bitcoins — or the other way round, 1 BTC equals 100,000,000 satoshis.
Bitcoin’s Metric System
Apart from satoshi, Bitcoin has a fully developed metric system, which has turned out to be essential in managing the circulating funds, given the fact that Bitcoin has a limited supply of 21 million units and the surge for it doesn’t seem to calm down:
algorithmic maximum: 20,999,999.9769 BTC
megaBitcoin (MBTC): 1,000,000 BTC
kiloBitcoin (kBTC): 1,000 BTC
deciBitcoin (dBTC): 0.1 BTC
centiBitcoin (cBTC): 0.01 BTC
milliBitcoin (mBTC): 0.001 BTC
microBitcoin (uBTC): 0.000001 BTC
finney: 0.0000001 BTC
satoshi: 0.00000001 BTC
Milli-Bitcoin (mBTC), micro-Bitcoin (uBTC) or a bit, and satoshi are the most popular fractions among seasoned Bitcoin traders. Different wallets allow you to choose different denominations depending on your preference. Generally, we got the impression that bits were more frequently used in the first Bitcoin boom in 2017, while satoshis got popularized during the pandemic Bitcoin frenzy of 2021, especially with wallets and financial services that support the Lightning Network.
The Lack of Unified Bitcoin Fraction
Despite the need for smaller Bitcoin fractions, most popular digital currency exchanges quote BTC prices in U.S Dollars, which means that users still need to deal with messy decimals when purchasing BTC in exchange for fiat currencies.
Thus, it’s a common practice to say we’re buying a portion of BTC in the amount of $500, which is 0.013 BTC (if we take $40,000 as an example for an average Bitcoin exchange rate). Don’t you think it’ll be more intuitive to say that we’re purchasing 1.28 million satoshis or 12,800 bits for $500?
Unfortunately, the blockchain community hasn’t adopted a unified fraction that will be commonly accepted by all or a greater part of popular marketplaces.
However, the total BTC supply is getting closer to its endpoint and Bitcoin’s price is expected to grow much higher and reach some point of stability. Therefore, it won’t be surprising to see satoshi listed on world-renowned crypto exchanges sooner than expected. Roughly said, Bitcoin has to reach $1 million so that SAT is worth 1 cent.
Where Can I Buy a Bitcoin Fraction?
The short answer is everywhere where you can buy Bitcoin. All crypto marketplaces allow you to buy a portion that is smaller than a single Bitcoin, but the minimum limit varies from one platform to another. The minimum limit can be a trading or deposit limit. Very often a platform offers purchases and trades without a minimum limit, but in reality, there is a norm that defines the minimum trading size at 0.00001 BTC.
On the other hand, it’s not recommended you invest less than $20 because Bitcoin purchases come with a set of fees (deposit fees, trading fees, and transaction fees), which also depend on the service. It will be unreasonable for the fee amount to exceed the cryptocurrency investment itself.
As for recommended platforms, you should know that even though there are different types of crypto services based on their operational principles, centralized crypto exchanges are considered the gold standard.
How Do Crypto Exchanges Work?
Crypto exchanges are platforms that facilitate buying, selling, and trading cryptocurrencies in a user-friendly manner. They have been the largest crypto marketplace since the Bitcoin inception, carving out an industry for themselves. There are over 400 active exchanges on the cryptocurrency market, so we can’t discuss their features in general terms. Crypto exchanges can differ in trading fees, security and regulation standards, supported digital assets (Bitcoin is welcome everywhere) and customer support.
Furthermore, If you’re a beginner and want to make a single Bitcoin purchase, you should pay special attention to the way in which the exchange processes transactions, the type of trading services it provides, and its user interface.
Optimally, in the beginning, you should settle for a crypto exchange that operates as a brokerage service rather than a trading platform, which runs on an ask-and-bid order system. Crypto brokers are tailored specifically for novices and allow you to make an instant purchase in exchange for your native fiat currency. On that account, these services charge more than pro trading platforms, but they’re worth the money, especially at this stage of your career.
A Beginner’s Guide to Using Crypto Exchanges to Buy BTC Fractions
Despite the vast number of distinctive features, crypto exchanges follow the same set of buying patterns.
Get a Bitcoin Wallet
The cryptocurrency exchange doesn’t directly impose this step, but it’s an essential to-do before engaging yourself in any crypto activity. Since bitcoins don’t have a physical version in the actual world, they need proper storage and a digital location from where you’ll manage your funds.
Crypto wallets can be software programs or hardware devices containing basic software. They generate two main pieces of information about your Bitcoin — a public and private key. The former functions as a Bitcoin address for other users to find you, while the latter is like a password for proving ownership over your funds. Depending on whether the wallet requires an internet connection for performing the main operations, we classify them either as hot or cold storage.
Hot wallets cover a large group of storage solutions, including web wallets, mobile, and desktop wallets. While you can assess a web wallet from a browser, mobile and desktop wallets are downloadable software programs that keep your keys in the device to which they’re downloaded.
On the other hand, the majority of centralized crypto exchanges offer web wallets as part of your account (read the section below). However, our sincere advice is to avoid in-exchange wallets despite the ease of use they offer. Crypto exchanges take full control over your private keys, and they usually keep your funds on their central online servers. The very fact your bitcoins reside online makes built-in wallets vulnerable to hack attacks and scams.
Therefore, the best storage alternative is investing in a hardware wallet that appears in the form of a small tangible device and keeps your private keys within the wallet device itself.
Create an Account
After getting an independent and trustworthy Bitcoin wallet, the next step is to register an account on the desired platform. This process doesn’t differ whatsoever from any other interactive web platforms or e-commerce sites for daily use. You’ll have to submit a valid email and a password and confirm the newly-created account with the email address you provided.
However, governments nowadays have tightened the regulations for crypto trading, especially when fiat money is involved in the transaction. There is a strong tendency for regulating crypto services as regular money transmitters, which requires full compliance with AML/CFT policies. This means that new users must undergo a process of identity verification — KYC, which includes uploading personal documents and utility bills to prove their identity and permanent residence. The process is a bit unpopular with traders, not only because of the exposure of information but also because it takes a few business days to have your account verified.
Select a Payment Method
Once you land the platform as a verified user, it’s time to fund your account with fiat. Native-based crypto exchanges are the best solution for fiat-to-Bitcoin purchases as they support payments in your local currency without pricey conversions and offer a variety of payment methods familiar in your area.
Some crypto exchanges enable direct synchronization of your bank account to your exchange account but even if they don’t, bank transfers are the most common and cheapest method for fiat deposits. Renowned Canadian-based exchanges like Bitbuy and Coinberry also support Interac e-Transfers for local residents.
Certainly, the Canadian crypto market is wide open to international brands like Coinbase and Binance that have adjusted their payment options to the local conditions and allow debit card, credit card, SWIFT, and even PayPal transfers.
Make the Purchase
As implied in this article, modern crypto exchanges follow a trend of getting cryptocurrencies closer to average users, so you don’t have to be a pro-trader in order to make your first Bitcoin purchase. “Buy” boxes are transparently displayed on the dashboard, together with the necessary instructions for completing the process.
Navigate to the Buy tab and make sure Bitcoin is selected (most probably the default option), select a payment method and insert the amount in CAD or USD (depending on the exchange) you want to invest. The Buy tab contains a direct converter that will calculate the exact fraction of Bitcoin you can get for that amount. Before confirming the transaction, make sure that all applying fees are also calculated/deducted from the total amount.
What’s the Smallest Fraction of Bitcoin I Can Buy on a Crypto Exchange?
As we mentioned, crypto exchanges set their own limits when it comes to the minimum tradable amount. As the Bitcoin exchange rate is usually quoted in USD, you can also expect minimum limits cited in USD or another fiat currency. We’ve gone through the best crypto exchanges in Canada to find out the smallest amount of BTC you can buy or trade with. Once again, note that some exchanges make these restrictions on deposits while some ask for a minimum trading amount regardless of the deposited amount:
- Bitbuy — $100 minimum deposit;
- NDAX.io — you can trade CAD to BTC with as little as $1;
- Coinberry — $50 minimum deposit;
- Coinbase — 2 Bitcoin units denominated in your local currency (e.g. $2 USD);
- Binance — $10 minimum trade;
- Gemini — 0.00001 BTC trade;
- Kraken — 0.0001 BTC order size;
- eToro — $25 minimum purchasing limit;
- Robinhood — 0.000001 BTC minimum order trade.
Other Methods for Buying a Fraction of Bitcoin
Regulated crypto exchanges are the most reliable method for purchasing your desired portion of Bitcoin but not the only one available on the vibrant crypto market. You can also consider these options if they suit your purchasing style better.
At first glance, Bitcoin machines sound like an ideal way to buy crypto on the go. Bitcoin ATMs or BATMs are physical kiosks located in busy city areas where users can purchase Bitcoin instantly with cash. Cash payments don’t mean that you can go unverified. Contrarily, BATMs can require various forms of identity verification (SMS, fingerprints, face recognition, and so on) but overall, the process is pretty straightforward and fast.
The real issue with BATMs is the ridiculously high commissions, which can reach up to 10% of the total transaction.
P2P (Peer-to-Peer) Services
P2P exchanges feature a different model than traditional crypto exchanges. They don’t facilitate participants’ transactions but connect the buyer and seller instead. After they find each other, participants set the terms of the transactions themselves. For example, if you want to buy a fraction of Bitcoin, you’ll make an account on a P2P platform and browse for a seller who offers the required amount and accepts a payment method that suits you.
As you can see, P2P exchanges offer you a more flexible trading environment, yet the entire setup looks a bit uncertain, particularly for first-time investors. Admittedly, P2P exchanges like Paxful enjoyed immense popularity until recently, as they allowed users to trade without verification. However, governments started applying the same mechanisms that restrict traders from exchanging assets anonymously, so the P2P marketplace seems to lose its initial charm.
A Few Words Before You Go…
Despite the sharp ups and downs, Bitcoin is an expensive endeavour in comparison to other investment vehicles. In 2015, it was a far-fetched idea because of the fear of the unknown and today, it still is, but because of the unattainable price.
The good news is that you can still invest in BTC by acquiring only a fraction of the amount that suits your financial possibilities. Experts assert that the demand for Bitcoin will only grow in the years to come, and BTC it’s on its way to becoming the new gold.
Hence, it sounds like a plan to own 5 million satoshis before the next Bitcoin surge.