What Are Rare Sats?

Rare sats are satoshis with qualities or origins that distinguish them from other sats. But to understand what makes a sat rare, first you need to look at the underlying concept. A satoshi is the smallest unit of bitcoin. Think of it like one penny out of a dollar, except there are 100 million satoshis in 1 bitcoin. For much of their existence, satoshis functioned only as a unit for crypto transactions.

The introduction of the Ordinals Protocol has changed things. By allowing for the identification, tracking and inscription of data on individual sats, each one has essentially become an NFT. This created a new use case for satoshis and greater demand for rare ones.

Ordinals Protocol creator Casey Rodarmor established rarity levels, under which the first sat mined after a difficulty adjustment period is considered rare. These generally occur every 2016 blocks (roughly every two weeks).

Additionally, sats with other special characteristics or that were exchanged as part of famous transactions are valued as collectibles. One example is the sats mined by Bitcoin creator Satoshi Nakamoto (for whom they are named) and sent in the first bitcoin transaction. These appeal to collectors because of their history and rarity.