The satoshi (a.k.a. "sats") is currently the smallest unit of measurement of bitcoin on its blockchain. They're equivalent to one-hundredth-millionth of a bitcoin (1 Satoshi = 0.00000001 ฿).

The term "bits" refers to 100 satoshis.

All amounts on the blockchain are recorded in satoshis, and satoshis are used whenever fractional amounts of bitcoins are needed, such as in transaction fees.

It was named in honor of Bitcoin's creator, Satoshi Nakamura.