Glossary
Short definitions for Bitcoin, wallets, security, transactions, privacy, and adjacent crypto terms.
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A
Address
A Bitcoin address is an encoded string representing a destination for bitcoin payments. Depending on the type, it may be derived from a public key...
Address Poisoning
Address poisoning is an attack where an adversary sends tiny transactions to your wallet from addresses that closely resemble your own or your...
Address Reuse
Address reuse is the practice of using the same Bitcoin address for multiple transactions. It is a significant privacy and security risk that links...
Air Gap
An air gap is a physical security measure where a device is completely isolated from all networks — no Wi-Fi, Bluetooth, USB data connections, or...
Altcoin
An altcoin is any cryptocurrency other than Bitcoin. While thousands of altcoins exist with various claimed innovations, none have replicated...
B
Backup Verification
Backup verification is the process of testing that your seed phrase backups, multisig configurations, and recovery procedures actually work before...
Bech32
Bech32 is the address encoding format for native SegWit Bitcoin addresses, producing addresses that start with bc1. It offers better error...
BIP (Bitcoin Improvement Proposal)
A Bitcoin Improvement Proposal (BIP) is a formal document proposing changes, standards, or informational guidelines for the Bitcoin protocol. BIPs...
BIP39
BIP39 is a Bitcoin Improvement Proposal that defines a standard method for generating mnemonic seed phrases from random entropy. It specifies a...
Bitcoin
Bitcoin is a decentralized digital currency and payment network that operates without central authority. Created in 2009 by the pseudonymous Satoshi...
Bitcoin Standard
The Bitcoin Standard is an economic framework proposing Bitcoin as the foundation of a new global monetary system, analogous to the gold standard...
Block
A block is a batch of validated Bitcoin transactions bundled together with a header containing metadata, a timestamp, and a reference to the...
Blockchain
The blockchain is Bitcoin's public, immutable ledger that records every transaction ever made on the network. It consists of an ordered chain of...
Brain Wallet
A brain wallet is a Bitcoin wallet where the private key is derived from a memorized passphrase or sentence. The passphrase is hashed to produce the...
C
Chain Analysis
Chain analysis is the practice of tracing Bitcoin transactions on the public blockchain to de-anonymize users, identify fund flows, and link...
Change Address
A change address is the address where leftover bitcoin is sent back to you in a transaction. Since UTXOs must be spent in full, the difference...
Clipboard Malware
Clipboard malware (also called a clipper) is malicious software that monitors your clipboard for cryptocurrency addresses and silently replaces them...
Coin Control
Coin control is the practice of manually selecting which specific UTXOs to use as inputs in a Bitcoin transaction. It gives users precise control...
CoinJoin
CoinJoin is a privacy technique where multiple users combine their Bitcoin transactions into a single transaction, making it difficult for...
Cold Storage
Cold storage means keeping Bitcoin private keys on a device that never connects to the internet. True cold storage requires an air-gapped hardware...
Confirmation
A confirmation occurs when a Bitcoin transaction is included in a block that is added to the blockchain. Each subsequent block added after that...
Consensus
Consensus in Bitcoin is the mechanism by which all network participants agree on the current state of the blockchain without a central authority. It...
CPFP
Child Pays for Parent (CPFP) is a fee-bumping technique where the recipient of an unconfirmed transaction creates a new high-fee transaction...
Custodial Wallet
A custodial wallet is a Bitcoin wallet where a third party (exchange, company, or service) holds and controls the private keys on your behalf. You...
D
dApp (Decentralized Application)
A decentralized application (dApp) is software that runs on a blockchain network rather than centralized servers. While dApps promise censorship...
Dead Man's Switch
A dead man's switch is an automated mechanism that triggers a pre-defined action — such as transmitting recovery instructions or releasing access to...
Decentralization
Decentralization is the distribution of power, control, and decision-making across many independent participants rather than concentrating it in a...
DeFi (Decentralized Finance)
DeFi refers to financial applications built on blockchain smart contracts that aim to replicate traditional financial services without...
Derivation Path
A derivation path is the hierarchical route used to generate specific keys from a master seed in an HD wallet. It follows a standardized notation...
Difficulty Adjustment
The difficulty adjustment is Bitcoin's automatic recalibration mechanism that occurs every 2,016 blocks (approximately two weeks). It adjusts the...
Dollar-Cost Averaging (DCA)
Dollar-Cost Averaging is an investment strategy where you buy a fixed dollar amount of bitcoin at regular intervals regardless of price. DCA removes...
Duress Wallet
A duress wallet is a decoy wallet containing a small, sacrificial amount of bitcoin that you can surrender under physical threat. It protects your...
Dust
Dust refers to extremely small amounts of bitcoin in UTXOs where the cost of spending them (transaction fees) would exceed or approach their value...
E
Entropy
Entropy is the measure of randomness or unpredictability used in generating cryptographic keys and seed phrases. High-quality entropy ensures that...
Ethereum
Ethereum is the largest altcoin platform, designed as a general-purpose blockchain for smart contracts and decentralized applications. It differs...
Extended Fingerprint (XFP)
An extended fingerprint (XFP) is a short identifier derived from a wallet's master public key. It uniquely identifies a specific wallet or signing...
F
Fiat Currency
Fiat currency is government-issued money that is not backed by a physical commodity like gold. Its value derives from government decree and public...
Full Node
A full node is software that independently downloads and validates every block and transaction in the Bitcoin blockchain against all consensus...
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H
Halving
The halving is a programmed event that cuts the Bitcoin block reward in half every 210,000 blocks, approximately every four years. This mechanism...
Hard Fork
A hard fork is a non-backward-compatible change to the Bitcoin protocol that makes previously invalid blocks valid. All nodes must upgrade to follow...
Hardware Wallet
A hardware wallet is a dedicated physical device designed to generate, store, and use Bitcoin private keys in an isolated environment. It signs...
Hash Rate
Hash rate is the total computational power being used to mine and secure the Bitcoin network, measured in hashes per second. A higher hash rate...
HD Wallet
A Hierarchical Deterministic (HD) wallet generates all keys and addresses from a single master seed using a tree-like structure. This means one seed...
HODL
HODL is a Bitcoin community term meaning to hold your bitcoin long-term rather than selling during price volatility. Originating from a famous 2013...
Hot Wallet
A hot wallet is a Bitcoin wallet where the private keys are stored on an internet-connected device. It provides convenience for frequent...
Hyperbitcoinization
Hyperbitcoinization is a theoretical tipping point where Bitcoin becomes the dominant global monetary standard, driven by voluntary adoption rather...
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Inheritance Planning
Inheritance planning for Bitcoin is the process of arranging for your heirs to access your bitcoin after your death, without compromising security...
Input & Output
Inputs and outputs are the fundamental components of every Bitcoin transaction. Inputs reference previously unspent outputs (UTXOs) being spent...
K
Key Ceremony
A key ceremony is a formal, documented process for generating Bitcoin private keys or seed phrases under controlled conditions with maximum...
KYC (Know Your Customer)
Know Your Customer is a regulatory requirement that forces financial institutions, including Bitcoin exchanges, to verify the identity of their...
L
Labeling (UTXO Tagging)
Labeling is the practice of tagging each UTXO in your wallet with metadata about its source, purpose, or privacy status. Good labeling enables...
Lightning Network
The Lightning Network is a layer-2 payment protocol built on top of Bitcoin that enables fast, low-cost transactions through a network of...
M
Mempool
The mempool (memory pool) is the waiting area where unconfirmed Bitcoin transactions sit before being included in a block by miners. Each full node...
Metal Backup
A metal backup is a physical device made of steel or titanium used to permanently record a Bitcoin seed phrase. Metal backups resist fire, flooding...
Mining
Bitcoin mining is the process of using computational power to find valid blocks, securing the network and processing transactions. Miners compete to...
Multisig
Multisig (multi-signature) is a Bitcoin spending condition that requires multiple private keys to authorize a transaction. A common configuration...
N
NFT (Non-Fungible Token)
A Non-Fungible Token is a unique digital asset recorded on a blockchain, representing ownership of a specific item such as art, music, or...
No-KYC Bitcoin
No-KYC bitcoin refers to acquiring bitcoin without submitting identity verification to a centralized exchange. Methods include peer-to-peer trading...
Non-Custodial Wallet
A non-custodial wallet is a Bitcoin wallet where you alone control the private keys. No third party can access, freeze, or confiscate your funds...
Nonce
A nonce (number used once) is a value that miners change repeatedly when attempting to find a valid block hash. By iterating through nonce values...
Not Your Keys, Not Your Coins
A foundational Bitcoin principle stating that if you don't control your private keys, you don't truly own your bitcoin. Leaving bitcoin on an...
O
OP_RETURN
OP_RETURN is a Bitcoin script opcode that allows embedding a small amount of arbitrary data (up to 80 bytes) in a transaction output. The output is...
Open-Source Software
Open-source software publishes its complete source code for anyone to inspect, audit, modify, and distribute. In Bitcoin, open source is not just a...
Operational Security (OPSEC)
Operational security is the practice of protecting sensitive information by analyzing what data an adversary could collect and taking steps to deny...
Orphan Block
An orphan block (more accurately called a stale block) is a valid block that was mined and propagated but not included in the longest proof-of-work...
P
Paper Wallet
A paper wallet is a Bitcoin private key and address printed on a piece of paper. Once considered a cold storage method, paper wallets are now widely...
Passphrase
A passphrase (sometimes called the 25th word) is an optional additional word or phrase added to a BIP39 seed phrase during key derivation. It...
PayJoin
PayJoin (also called P2EP or Pay-to-EndPoint) is a privacy technique where both the sender and receiver contribute inputs to a Bitcoin transaction...
Phishing
Phishing is a social engineering attack where adversaries impersonate trusted entities to trick victims into revealing sensitive information like...
Plausible Deniability
Plausible deniability in Bitcoin security means structuring your custody setup so you can credibly deny the existence of additional wallets or...
Private Key
A private key is a secret 256-bit number that grants complete control over the bitcoin associated with its corresponding address. It is the...
Proof of Stake
Proof of Stake (PoS) is a consensus mechanism where validators are selected to create blocks based on the amount of cryptocurrency they have staked...
Proof-of-Work
Proof-of-work (PoW) is Bitcoin's consensus mechanism that requires miners to expend computational energy to find valid blocks. It creates an...
PSBT
A Partially Signed Bitcoin Transaction (PSBT) is a standardized format (BIP174) for constructing and passing unsigned or partially signed...
Public Key
A public key is the cryptographic counterpart to a private key, derived through elliptic curve multiplication. It is used to generate Bitcoin...
R
Replace-by-Fee
Replace-by-Fee (RBF) is a Bitcoin protocol feature that allows an unconfirmed transaction to be replaced with a new version that pays a higher fee...
Reproducible Builds
Reproducible builds are a software development practice where compiling the published source code always produces a bit-for-bit identical binary...
S
Satoshi
A satoshi (sat) is the smallest unit of bitcoin, equal to 0.00000001 BTC or one hundred-millionth of a bitcoin. Named after Bitcoin's pseudonymous...
Sats per vByte
Sats per vByte (sat/vB) is the standard unit for measuring Bitcoin transaction fee rates. It represents the number of satoshis paid per virtual byte...
Script
Script is Bitcoin's stack-based programming language used to define the conditions under which bitcoin can be spent. Every transaction output...
Secure Boot
Secure boot is a firmware verification process that ensures only cryptographically signed and authorized code runs on a device when it starts up. In...
Secure Element
A secure element is a tamper-resistant microchip designed to store cryptographic keys and perform signing operations in a protected environment. In...
Seed Phrase
A seed phrase (also called a recovery phrase or mnemonic) is a human-readable sequence of 12 or 24 words that encodes the master secret from which...
SegWit (Segregated Witness)
Segregated Witness (SegWit) is a Bitcoin protocol upgrade activated in August 2017 that separates transaction signature data from the transaction...
Self-Custody
Self-custody means personally holding and controlling your own Bitcoin private keys without relying on any third party. It is the practice of being...
Shamir's Secret Sharing
Shamir's Secret Sharing (SSS) is a cryptographic scheme that splits a secret into multiple shares, where a defined threshold of shares is required...
Side-Channel Attack
A side-channel attack extracts secret information from a device by analyzing its physical emissions — power consumption, electromagnetic radiation...
SIM Swap Attack
A SIM swap attack occurs when an adversary convinces your mobile carrier to transfer your phone number to a SIM card they control. This allows them...
Smart Contract
A smart contract is self-executing code deployed on a blockchain that automatically enforces the terms of an agreement. While altcoin platforms...
Soft Fork
A soft fork is a backward-compatible upgrade to the Bitcoin protocol where new rules are a subset of the old rules. Non-upgraded nodes continue to...
Software Wallet
A software wallet is an application running on a computer or smartphone that manages Bitcoin keys and transactions. It can function as a standalone...
Sound Money
Sound money is money that possesses scarcity, durability, divisibility, portability, and fungibility — properties that allow it to reliably store...
Stablecoin
A stablecoin is a cryptocurrency designed to maintain a stable value by pegging to an external asset, typically the US dollar. While useful as a...
Stacking Sats
Stacking sats is the practice of regularly accumulating small amounts of bitcoin, measured in satoshis (sats) — the smallest unit of bitcoin...
Store of Value
A store of value is an asset that maintains or increases its purchasing power over time. Bitcoin's fixed supply of 21 million coins, combined with...
Supply Chain Attack
A supply chain attack compromises hardware or software during manufacturing, distribution, or update processes. In Bitcoin, this means tampered...
T
Taproot
Taproot is a Bitcoin protocol upgrade activated in November 2021 (BIP340, BIP341, BIP342) that improves privacy, efficiency, and smart contract...
Timelock
A timelock is a Bitcoin script condition that prevents a transaction output from being spent until a specified time or block height has passed...
Token
A token is a digital asset created on an existing blockchain rather than having its own independent network. Unlike Bitcoin, which is a native asset...
Tor (The Onion Router)
Tor is a decentralized anonymity network that routes internet traffic through multiple encrypted relays, hiding your IP address from the services...
Transaction Fee
A transaction fee is the amount of bitcoin paid to miners for including a transaction in a block. Fees are calculated based on the transaction's...
Two-Factor Authentication (2FA)
Two-factor authentication adds a second verification layer beyond your password, requiring something you know and something you have. For Bitcoin...
TXID
A TXID (Transaction ID) is a unique 64-character hexadecimal hash that identifies a specific Bitcoin transaction. It is computed by double-SHA256...
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V
Vanity Address
A vanity address is a Bitcoin address that contains a specific, human-readable pattern chosen by the user. It is generated by repeatedly creating...
VPN (Virtual Private Network)
A VPN encrypts your internet traffic and routes it through a server operated by the VPN provider, masking your real IP address from the services you...
W
Warm Wallet
A warm wallet is a Bitcoin wallet with limited or intermittent internet connectivity, sitting between the full exposure of a hot wallet and the...
Watch-Only Wallet
A watch-only wallet is a Bitcoin wallet configured with public keys (typically an xpub) but no private keys. It can display balances, generate...
White Paper
The Bitcoin white paper is the original nine-page document titled 'Bitcoin: A Peer-to-Peer Electronic Cash System,' published by Satoshi Nakamoto on...