First off, let me start by stating that all of the information in this article will be relevant to all fiat currencies, but it is easiest to approach this from the perspective of only one fiat currency, and since my local currency is the US Dollar ($USD), it is the one that I will be using to illustrate my examples.

Why to think in Satoshis:

A very simplistic way of looking at what investing is, is to use some of your money to buy something with the hopes that it will appreciate in value so that when you sell it in the future you will get back your initial investment money, plus a profit on top of that. However, there is a huge difference between “investing“ and “investing efficiently” and this sentence 100% encapsulates why thinking in Satoshis is paramount.

Let’s say that:

• 1 Bitcoin is worth $12,000 USD
• 1 Ethereum is worth 0.1 Bitcoin

Let’s also say that:
• Tom bought $6,000 USD worth of Bitcoin or 0.5 Bitcoin
• Jane bought $6,000 USD worth of Ethereum or 5 Ethereum

Scenario 1 - After 2 days of market fluctuations, the new market values are as follows:
• 1 Bitcoin’s value went up to be worth $15,000 USD
• 1 Ethereum’s value went up to be worth 0.2 Bitcoin

• Tom’s portfolio of 0.5 Bitcoin is now worth $7,500 USD [15,000 (bitcoin’s current price) * 0.5 (Bitcoins owned)]. He has made a $1,500 profit! [$7,500 (current value) - $6,000 (initial investment)]

• Jane’s portfolio of 5 Ethereum is now worth 1 full Bitcoin [0.2 (Ethereum price) * 5 (Ethereums owned)], for a total portfolio value of $15,000 since she initially invested $6,000, her profit was $9,000 USD!

Scenario 2 – After 2 days of market fluctuations, the new market values are as follows:
• 1 Bitcoin’s value went up to be worth $25,000 USD
• 1 Ethereum’s went down to be worth 0.05 Bitcoin

• Tom’s portfolio of 0.5 Bitcoin is now worth $12,5000 USD [25,000 (bitcoin’s current price) * .5 (Bitcoins owned)]. He has made a $6,500 USD profit
• Jane’s portfolio of 5 Ethereum is now worth 0.25 Bitcoins [0.05 (Ethereum price) * 5 (Ethereums owned)], and since 1 Bitcoin is worth $25,000, then 0.25 Bitcoin is then worth $6,250. Her profit was $250 USD

Scenario 3 – After 2 days of market fluctuations, the new market values are as follows:
• 1 Bitcoin’s Value went down to be worth $3,000
• 1 Ethereums Value went up to be worth 0.5 Bitcoin

• Tom’s portfolio of 0.5 Bitcoin is now worth $1,500 USD, he has made a loss of $4,500 USD
• Jane’s portfolio of 5 Ethereum is now worth 2.5 Bitcoin, for a total USD of $7,500 USD. She has made $1,500 USD profit despite the fact that bitcoin is down.

By analyzing all 3 scenarios many points can be made, but the most important one to be made is that your profit is affected by but not solely determined by Bitcoin’s price fluctuation, in scenario 3 you can clearly see that Bitcoins price dropped by half and yet Jane was still able to turn a profit.

How does this affect you?

Well, whenever you look at your Blockfolio app or at your estimated $USD value on the Binance app/website or any other way in which you check the value of your portfolio, these apps/websites are arriving at that estimate by first hypothetically selling all of your alt coins to bitcoins and then comparing that Bitcoin value to the current BTC-USD value. This estimated value gives you a general idea on how the value of your portfolio would fair if you were to cash out all at that moment.

However, since you aren’t constantly cashing out of your investments, that money is still in the market, and if it is gonna stay in the market, might as well put it where ever you are going to get your best ROI, REMEMBER you aren’t trying to just “invest” you are trying to “invest efficiently”. There will be times when leaving all of your investments in Bitcoin has a better overall ROI and there will be times when being diversified into alt coins gives you a better overall ROI, but you would never know this by looking at USD alone. You can only notice this by comparing your alt-coin’s value to Bitcoin’s value. HENCE, it is critically important for a good crypto investor to know the value of their alt coin in terms of Bitcoins and not just in USD.

How to think in Satoshis

1 Bitcoin is worth One Hundred Million (100,000,000) satoshi.
1 satoshi is worth One Hundred Millionth (0.00000001) of a Bitcoin.
The current price of Ripple (XRP) is 0.00012099 Bitcoins, the way that you would read this is actually super simple . First, ignore the O before the decimal, then ignore the decimal and then ignore all of the 0s following the decimal until you reach your first non 0 number. So put simply, 1 XRP is worth 12,099 satoshis.

1 Cardano (ADA) is worth 0.00005575 Bitcoins, so it would be worth 5,575 satoshis.
1 Stellar Lumens (xlm) is worth 0.00004314 Bitcoins, so it would be worth 4,314 satoshis.