The Full Glossary

Every term used on this site, defined in plain language. The home page carries the same twenty-four terms in its pocket glossary; this page is the reference version to keep open while you read the guides.

Address

A string of letters and numbers you share so others can send you bitcoin, similar in spirit to an account number. One wallet can create many addresses, and using a fresh address for each payment makes your activity harder to follow.

Altcoin

Any cryptocurrency other than Bitcoin. Thousands exist, with different rules, risks, and levels of adoption. Bitcoin is not the same thing as every other cryptocurrency, and this site teaches Bitcoin only.

Blockchain

A chronological chain of transaction blocks maintained and checked by the Bitcoin network. Each block points back to the one before it, which is what makes quietly rewriting an old entry so difficult: every later block would no longer fit.

Block

A batch of confirmed transactions added to the blockchain at once, roughly every ten minutes. Each block records the fingerprint of the block before it, forming the chain. The ten-minute pace is a rule of the network, maintained automatically as mining power changes.

Confirmation

A transaction is confirmed when it is included in a block. Each block added after it counts as another confirmation. More confirmations mean a payment is more deeply settled and harder to reverse; many services wait for several before treating a payment as final.

Exchange

A service where people buy and sell bitcoin for national currencies or other assets. Exchanges set their own prices from live supply and demand, which is why the price can differ slightly from one exchange to another at the same moment.

Fiat currency

Money issued by a government, such as the US dollar or the euro. Fiat is not backed by a physical commodity; its value rests on law, custom, and trust in the issuing state. Bitcoin was designed as an alternative that no government issues.

Halving

An event roughly every four years when the reward miners receive for adding a block is cut in half. Halvings are written into Bitcoin's rules and are how the total supply approaches its 21 million limit. A halving does not guarantee any particular price movement.

Hardware wallet

A small physical device that keeps private keys offline and signs transactions without exposing the keys to your computer or phone. It is one common way to hold larger amounts more safely, though the recovery phrase still has to be protected.

Hash

The output of a mathematical function that turns any input into a fixed-length fingerprint. Change even one character of the input and the fingerprint changes completely. Bitcoin uses hashes to link blocks together and as part of the mining puzzle.

Hot wallet

A wallet whose keys live on a device connected to the internet, such as a phone app. Hot wallets are convenient for small amounts and everyday use, but the connection that makes them convenient also makes them easier to attack.

Mempool

The waiting room for transactions that have been broadcast but not yet included in a block. Miners usually pick transactions offering higher fees first, so when the mempool is crowded, a low-fee payment can wait hours or longer to confirm.

Mining

Proof-of-work activity that helps order transactions and add blocks under network rules. Miners spend computing power competing to add the next block; the winner is paid in new bitcoin plus transaction fees, and the work makes past records costly to alter.

Node

A computer running Bitcoin software that keeps a copy of the blockchain and checks every transaction and block against the rules. Anyone can run a node, and the thousands doing so independently are a large part of why no single operator controls the network.

Private key

A secret that proves control over bitcoin. Anyone with it may be able to spend those funds. There is no password reset for a private key: if it is lost, the bitcoin it controls cannot be recovered, and if it is stolen, the bitcoin can be taken.

Proof of work

The system that lets the network agree on which block comes next. Miners must show they spent real computing effort, which makes honest participation profitable and cheating expensive. It is the security backbone that lets strangers trust a shared record.

Public key

The counterpart to a private key. It can be shared openly and is used to create the addresses others pay to. The mathematics is one-way: a public key can be derived from a private key, but a private key cannot be worked out from a public one.

Satoshi

The smallest unit of bitcoin: one hundred-millionth of a bitcoin (0.00000001 BTC). Because bitcoin is divisible this far, nobody needs to buy a whole bitcoin; amounts of a few dollars' worth are ordinary. Named after Bitcoin's creator, Satoshi Nakamoto.

Seed phrase

A list of words, usually 12 or 24, that can regenerate a wallet and everything in it. Whoever has the phrase has the funds, which is why it belongs on paper in a safe place — never in a photo, a note app, or a website.

Transaction

A signed instruction that moves bitcoin from one address to another. Once broadcast, it waits in the mempool until a miner includes it in a block. Confirmed transactions are effectively irreversible, which is why checking the destination address matters so much.

Transaction fee

A small amount paid to miners on top of the amount being sent, chosen by the sender. Fees rise when many people want block space at once and fall when the network is quiet. A fee that is too low can leave a payment waiting.

Volatility

The degree to which a price moves up and down over time. More volatility means wider swings. Bitcoin has historically been far more volatile than major currencies or broad stock indexes, including drops of half its value or more.

Wallet

Software or hardware that manages the keys used to access and authorize bitcoin transactions. A wallet does not contain bitcoin the way a pocket contains coins; the bitcoin stays recorded on the blockchain, and the wallet holds the keys that prove it is yours to spend.

Whitepaper

The nine-page document published in 2008 by Satoshi Nakamoto that proposed Bitcoin: a peer-to-peer electronic cash system. It is short, readable, and still the clearest statement of what Bitcoin was designed to do and why.