From Address to Zero-Confirmations, the Bitcoin industry is full of all sorts of jargon, tech-speak, and slang. Here’s the ultimate bitcoin glossary to help you to navigate your way down your own bitcoin rabbit hole.
0-9
1MB Blocks
1 MB blocks refers to the hard cap on the amount of data that can be included in a block that is added to the blockchain.
21 Million
21 Million is the total supply of bitcoin that will ever be mined.
2FA: Two-Factor Authentication
2 Factor Authentication or 2FA is a method to secure your bitcoin wallet with an additional layer of security such as an additional password, confirming a link in an email, receiving an email, or using an authenticator app.
51% Attack
A 51% attack is when a mining pool controls at least 51% of the total hashrate and has the ability to omit transactions and reorganize the blockchain so as to erase previously confirmed blocks.
A
Address
A Bitcoin Address is where you send/receive bitcoin payments to/from. Each address is a unique alphanumeric identifier of approximately 35 characters and has a corresponding private key.
Address Cluster
A bitcoin address cluster is a collection of Bitcoin addresses that are linked to each other by multiple inputs merged in a single transaction or a series of change addresses over the course of multiple transactions. Address clusters are thought to be owned by the same person or entity.
Also see: Peeling Chain
AI: Artificial Intelligence
AI is short for Artificial Intelligence. AI is already being implemented in a number of tech industries and many believe that AI will be widely used in the Bitcoin industry.
Airdrop
An airdrop is when new crypto is printed out of nothing and distributed to users. Airdrops are often associated with altcoins but can also refer to free coins from bitcoin forks.
Air Gap
An Air Gap is a security measure to ensure that a computer or group of computers is isolated from a network of unsecured computers such as the internet or a local area network. Some Bitcoin hardware wallets can be 100% air-gapped.
Algorithm
An algorithm is a set of specific instructions that can be used to solve a problem, perform a calculation, or complete a task. Algorithms are used in mathematics and computer science to solve problems and process data. More advanced algorithms can reason, make deductions, and execute decisions automatically using mathematical and logical tests.
Alice, Bob & Eve
Alice, Bob, and Eve are common characters used in examples to describe how a specific type of bitcoin transaction might work. Alice and Bob are usually transacting and Eve is trying to eavesdrop on them.
Alphanumeric
Alphanumeric is any combination of numbers and letters to create a larger number or letter set. Alphanumeric sets use all 26 letters of the Latin alphabet and the numbers 0-9. All Bitcoin addresses and TxIDs are alphanumeric.
Also see: Hexadecimal
Altcoin
An altcoin (alt for short) is any cryptocurrency that isn’t bitcoin. Altcoin is short for “alternate coin” since Bitcoin is the first and most dominant cryptocurrency.
AML: Anti Money Laundering
AML is short for Anti-Money Laundering and is a common term in the banking industry. AML laws and regulations are currently being implemented across the bitcoin industry.
Also see: KYC
API
API stands for Application Programming Interface. They are a type of toolkit provided by developers so anyone can integrate a service with other tools or services.
ASIC Miner
ASIC Miner is short for Application-Specific Integrated Circuit and they have become the de facto standard for mining since they were engineered specifically for mining Bitcoin.
Also see: CPU Miner & GPU Miner
Attack Surface
In computer security, an attack surface of a system is the totality of ways in which an adversary can attempt to compromise security. An attack surface may include any aspect of a computer system that can be exploited by an attacker such as hardware components, software vulnerabilities, user accounts, and network connectivity.
The attack surface of a system is the total number of vulnerabilities that can be exploited by an attacker. In other words, the attack surface is the sum of all the attack vectors. So, if a system has ten potential vulnerabilities, then its attack surface would be ten.
Attack Vector
An attack vector is a path or means by which a hacker (or an attacker) can gain access to a computer system or network. This is not to be confused with attack surface which is the sum of all attack vectors.
To put it another way, the attack vector is the specific attack that was carried out, while the attack surface is the total number of possible attacks.
ATH
ATH is short for All Time High and one of the more common slang terms that you will hear in the bitcoin space. The current ATH took place back in December of 2017 with a price of approximately $18,600 USD per bitcoin.
ATM – Automoated Teller Machine
A Bitcoin ATM is a physical terminal used to exchange fiat currencies for Bitcoin and/or other cryptocurrencies. Bitcoin ATMs are sometimes referred to as BTMs for Bitcoin Teller Machine and are capable of making two-way exchanges so you can either buy or sell bitcoin for fiat at a physical terminal.
Atomic Swap
An Atomic Swap is a type of smart contract that allows 2 parties to exchange 2 assets without the need for a centralized intermediary such as an exchange.
Austrian Economics
The Austrian school of economics is a free-market approach that advocates for minimal government intervention and little to no regulation. According to the Austrian school, free markets are the most efficient way to allocate resources and produce goods and services. The school also believes that the private sector is best equipped to handle economic activity, and that government intervention only serves to distort markets.
B
Batched Transaction
Batched transactions are transactions that have multiple outputs in a single transaction to increase efficiency and reduce miner fees.
Big Blocks / Big Blocker
Big Block refers to the increase in the size of the bitcoin blocks to allow for more transactions to be processed per block. Big blocker refers to someone who supports the idea of increasing the block size to increase transactional throughput.
Big blocker is often used as an insult since increasing the block size leads to an increase in the cost of running a node and centralization of the network.
Bit
A Bitcoin, a bit is 1/1,000,000 of a bitcoin which is 100 sats.
In computer science, a bit is the smallest unit of data in a computer. A bit can store a 0 or 1, which are used to represent the two states of a digital signal.
Bitcoin (BTC)
Bitcoin is a peer-to-peer electronic cash system without any centralized authority such as a central bank, government, or corporation.
Bitcoiner
A Bitcoiner is one who owns bitcoin and uses it as a store of value, a medium of exchange, or a unit of account or any combination of these 3 things.
Bitcoin Dominance
Bitcoin dominance is the percentage of the total cryptocurrency market cap that is attributed to Bitcoin.
Bitcoin Exchange
A Bitcoin Exchange is any service that allows you to buy and sell bitcoin for other currencies. Some exchanges are for buying and selling bitcoin with fiat currencies like USD, GBP, EUR, etc. while others may exclusively buy and sell cryptocurrencies.
Bitcoin Faucet
A bitcoin faucet is a website or app that gives out small amounts of bitcoin for free, typically in exchange for completing micro tasks or viewing ads.
Bitcoin Network
The bitcoin network is a decentralized network of computers that work together to validate and process bitcoin transactions. The network is made up of bitcoin miners, who use powerful computers to verify transactions and add them to the blockchain, and bitcoin nodes, which relay information about transactions around the network.
BIP: Bitcoin Improvement Proposal
Bitcoin Improvement Proposals are how the global community proposes changes and improvements to Bitcoin. Some BIPs take place at the protocol level while many of them are adopted at the wallet level.
Bitcoin Miner
A Bitcoin Miner is anyone who operates a computer to compete to find the next bitcoin block. Whoever finds the next bitcoin block is rewarded with newly minted bitcoins. Anyone in the world is able to become a bitcoin miner however it is incredibly competitive.
Bitcoin Mining
Bitcoin Mining is the process of computers competing to systematically guess a precise number. The computers that find the precise number win a reward of new bitcoins, miner fees, and confirming new transactions on the Bitcoin blockchain. The term mining is used because bitcoin mining is meant to digitally simulate doing something that requires difficult work such as mining gold.
Bitcoin Wallet
A Bitcoin Wallet is software that is specifically designed for sending, receiving, and holding bitcoin. There are multiple kinds of bitcoin wallets but the 3 most common types are mobile wallets, desktop wallets, and hardware wallets.
Bitcoin Whitepaper
The Bitcoin Whitepaper is the original proposal for Bitcoin: A Peer-To-Peer Electronic Cash System. This paper outlines the basis of a new monetary policy that is based on mathematics rather than banks or governments.
Block
A Block is a file where a group of bitcoin transactions are permanently recorded on the blockchain. Each block has both newly mined bitcoins along with any other transactions that were sent in that particular block.
Block Explorer
A Block Explorer is an online tool that is used for exploring the blockchain. You can view address balances, transactions, miner fees, and much more with a block explorer.
Blockchain
The Blockchain is the collection of all of the blocks that have ever been mined. This chain of blocks is why it is called The Blockchain.
Blockchain Bloat
Blockchain Bloat is the congestion in the MemPool that causes transaction times to slow down. When the demand for on-chain transactions increases, the blockchain bloat is higher.
Block Height
The Block Height is the current number of confirmed Bitcoin blocks.
Block Reward
The Block Reward is the newly mined bitcoins that are awarded to the bitcoin miner that mines that block. The block reward is made up of two parts: the block subsidy and the transaction fees.
Block Size
The Block Size is the amount of information that is included in a bitcoin block. Currently, the bitcoin block size is 1MB.
Block Time
The Block Time is the time that it takes for a new block to be mined. It takes an average of about 10 minutes for each new block to be mined.
Bounty
A Bounty is a payment that is made by a company or individual for finding a bug or error in computer code and responsibly disclosing it.
BTFD
BTFD is short for “Buy The F*cking Dip” and it is one of the most common slang bitcoin terms. It means that you should buy bitcoin when the price dips.
BUIDL
BUIDL is an intentional misspelling for the word “Build” as a tribute to the word HODL.
Burn
Burn is a term used to describe bitcoins that are lost and gone forever. If you have lost the private key for an address, the bitcoin at that address is considered burnt or has been burned.
C
Change Address
A Change Address is an address where the remaining balance from a bitcoin transaction is sent. The sender of a transaction is the owner of the change address.
Client Side
Client-Side is when information is stored in the user’s hardware or device. Private keys on most desktop wallets keep the user’s private keys on the client while private keys stored under the custody of a third party are server side.
Also see: Server-Side
Cloud Mining
Cloud Mining services offer the ability to rent miners in remote locations around the world. These cloud mining services tend to gravitate toward parts of the world where electricity is abundant and cheap.
CoinJoin
CoinJoin is a privacy enhancing feature where users generate collaborative transactions to make it more difficult for chain analysis companies to break down user privacy.
Confirmation
A Confirmation on a bitcoin transaction verifies that the transaction has been included in a block. The more confirmations that a transaction has, the more secure it is. While small transactions typically only need 1 confirmation, 6 confirmations is considered very secure for larger transactions.
Consensus
Consensus is the agreement between all of the bitcoin nodes on the current state of the blockchain.
Crypto
Crypto is a general term used to refer to cryptography, cryptocurrency, or the entire cryptocurrency industry.
Cryptography
Cryptography is a math-based protocol used to encrypt/decrypt data and make digital signatures. Bitcoin uses cryptography to send and receive bitcoin as well as secure the bitcoin network.
Custody
Bitcoin custody refers to who is in control of your private keys. There are 3 types of bitcoin custody: Self custody, joint custody, and third-party custody. If your private keys are in third-party custody, you do not control your bitcoin.
Also see: Non-Custodial and server-side.
Cypherpunks
Cypherpunks are privacy activists who are heavily involved in the use of encryption to protect privacy. You are likely to hear the term “Cypherpunks write code” because you are not a true cypherpunk unless you are actively working to build a more privacy-centric future.
D
DAO
DAO is short for Distributed Autonomous Organization. Bitcoin is often called a DAO since it is not a centrally controlled organization with a typical corporate hierarchy.
DApp
DApp is short for Distributed or Decentralized App. The purpose of decentralized/distributed apps is to provide a solution to a problem without a central server or point of failure.
Dark Web
The Dark Web is a part of the internet that requires special tools to access and usually deals in black market goods and services. Although the dark web has a reputation for illicit activity, not everything sold on the dark web is illegal.
See also: Deep Web
Days Destroyed
Bitcoin Days Destroyed is a metric for measuring the inactivity of bitcoin at an address. The longer bitcoin remains idle at an address, the greater its days destroyed.
DDoS Attack
DDoS is short for Distributed Denial of Service Attack. DDoS attacks are a common way for hacker groups to attack a website in an attempt to overwhelm the server with bot traffic.
Decryption
Decryption is the act of unscrambling information with a specific code known as a decryption key.
Also see: Encryption
Deep Web
The Deep Web is part of the internet that is not easily accessible with normal tools such as search engines. It’s not an uncommon practice for companies to put certain parts of their website in the deep web to prevent them from being indexed by search engines.
The deep web is not the same as the dark web.
Deflation
Deflation is a decrease in the total supply of a monetary unit. The result of a deflationary currency is usually a decrease in prices for goods and services priced in that currency.
Desktop Wallet
A Desktop Wallet is a software wallet that installs on a desktop computer.
Digital Asset
A Digital Asset is another name for cryptocurrency. Bitcoin and all other cryptocurrencies are often called digital assets.
Digital Signature
A Digital Signature is a unique cryptographic signature using a private key. Similar to physically signing a credit card transaction; digital signatures are for signing bitcoin transactions. Only someone with access to a private key is able digitally sign a transaction.
Distributed Ledger
A Distributed Ledger is one of the primary characteristics of a blockchain. The distribution of all of the information on the blockchain is what allows bitcoin to work.
Divisibility
Divisibility is how easy it is to break up something into smaller pieces. Each bitcoin is divisible into 100,000,000 smaller units called Satoshis.
Double Spend
A Double Spend takes places whenever the same unit of money is spent more than once. Bitcoin solves the problem of the double spend. Double spends take place every day on legacy payment networks such a VISA and PayPal.
Dollar Cost Average
Dollar Cost Average is a strategy in which an investor purchases a fixed dollar amount of an asset over a period of time. DCA is a common way for investors to mitigate the risk of bitcoin’s volatility.
Dust
Bitcoin Dust is any amount of bitcoin that is worth less than the amount of bitcoin required to send it. If you have a tiny amount of bitcoin that you are unable to send from an address, it is considered dust.
Dusting Attack
Dusting Attacks are an attack on bitcoin privacy by sending tiny amounts of bitcoin to addresses that have been used in the past in an attempt to link owners of old addresses to new addresses.
E
Encryption
Encryption is the act of transforming or scrambling data to make it unreadable to anyone with out the decryption keys.
Escrow
Escrow is a third party service used to facilitate a trade. Escrow is used all over the world to facilitate trade for things like real estate, financial assets, bonds, deeds and other important documents.
ETF
ETF is short for Exchange-Traded Fund. Currently a number of legacy finance companies are trying to launch a Bitcoin ETF to allow investors to gain access to bitcoin price exposure without having to hodl their own bitcoin.
Exit Scam
An Exit Scam is when a company runs away with other people’s bitcoin or cryptocurrency.
F
Faucet
A Bitcoin Faucet is system that incentivizes traffic by giving away small amounts of bitoin in exchange for competing a simple task such as viewing an advertisement.
Fiat
Fiat currency, or just fiat, is currency that has been declared legal tender by a government but is not backed by a commodity.
FOMO – Fear Of Missing Out
FOMO is short for Fear Of Missing Out and it is often one of the driving forces behind large price pumps in the price of bitcoin.
Fork
A Bitcoin Fork is a change to the core protocol rules. There are two basic types of Bitcoin forks; soft forks and hard forks.
Fork: Hard Fork
A Hard Fork is a permanent change to the blockchain software that is no backwards compatible and creates an entirely new blockchain.
Fork: Soft Fork
A Soft Fork is a change to a piece of software that is backwards compatible and doesn’t create an entirely new blockchain. The old software is compatible with the new software fork.
FUD – Fear, Uncertainty, Doubt
FUD is short for Fear, Uncertainty, and Doubt. Lots of bitcoin media outlets like to publish sensationalist articles that are full of FUD because it often gets more clicks and drives more traffic.
Fungibility
Fungibility is when all units of something are the same and can act interchangeably. Bitcoin is technically fungible but some governments are taking the approach that the history of a bitcoin matters, so from a political perspective, certain bitcoin may not be fungible.
G
Game Theory
Game theory is the study of how rational actors make decisions in situations where the outcome depends on the actions of others. It can be used to analyze everything from business competition to international conflicts. One of the most famous examples of game theory is the prisoners dilemma, which demonstrates how two criminals might each confess to a crime in order to receive a lighter sentence, even though it would be better for both of them if neither confessed.
Genesis Block
The Genesis Block is the first block of bitcoins ever mined. There were 50 bitcoin mined in the Genesis block and they are still in at the same address to this day.
GPU Miner
GPU is short for Graphics Processing Unit. GPUs were a common way to mine bitcoins before ASIC chips became the dominant way to mine bitcoin. GPUs can still be a very useful way to mine altcoins and then sell for bitcoin.
Also see: ASIC Miner
H
Halving
The Halving, or halvening is when the Bitcoin block reward is cut in half. The halvening takes place once every 210,000 blocks.
Hardware Wallet
A Hardware Wallet is a physical piece of hardware that has been designed specifically to store bitcoin private keys. Hardware wallets almost all use cold storage to store your private keys in a secure offline environment.
HD Wallet
An HD Wallet is short for Hierarchically Deterministic wallet. HD wallets have implemented support for BIP 32 which creates a new address after each time it receives bitcoin.
Most Bitcoin wallets are HD wallets.
HODL
HODL is a drunken misspelling of the word “hold”. It has since become one of the most used slang terms in the bitcoin space. It is often toted as an acronym Hold On for Dear Life.
HODLer
A HODLer is someone who uses bitcoin for savings and doesn’t panic sell when the price dips. HODLers aren’t worried about price swings and often look forward to purchasing more bitcoin when the price dips.
Hot Wallet
A Hot Wallet is any wallet that stores your private keys online. Hot wallets are considered to be much less secure than cold wallets.
Also see: Cold Storage & Cold Wallet
I
Inputs
Inputs are the fractions of a bitcoin that are destroyed to generate the outputs in a transaction.
J
JoinMarket
JoinMarket is a decentralized CoinJoin market where users can mix their coins with others to increase privacy and fungibility for both the market makers and takers.
K
Keylogger
A Keylogger is a type of software that logs each and every key that is entered on a keyboard. Keyloggers are often used as malware to
KYC
KYC is short or Know Your Customer and are a common set of financial surveillance regulations that are being implemented in the bitcoin industry.
Also soo: AML
L
Lambo
Lambo is short for Lamborghini and is possibly the most used slang bitcoin term. Lambo is most commonly used in relation to when the price of 1 bitcoin will be able to buy a Lamborghini.
Leverage
Leverage is the use of borrowed money to trade with the intention of making a profit. Leveraged trading can be very risky since you run the risk of losing borrowed money and may be left with even less than a bag of shitcoins.
Lightning Network
The Lightning Network is a layer that is built on top of the bitcoin blockchain to allow for large numbers of microtransactions.
Lightning Node
A Lightning Node is a bitcoin node that has an entire copy of the blockchain downloaded on a local hard drive and processing lightning network transactions. In order to use the lightning network, you need to run your own lightning node.
Lightning Wallet
A Lightning wallet is a specific type of bitcoin wallet that uses the Lightning Network to facilitate near-instantaneous peer-to-peer payments at a lower cost than on-chain transactions. Lightning wallets can be run on a mobile device or a desktop computer.
Liquidity
Liquidity is the amount of money that is on an exchange and as a result, how easy it is to make a trade. The more liquidity, the easier it is to exchange one asset for another.
Liquidated
Liquidated is the finance and economics term for when a business has to close because they are insolvent. You are most likely to hear it in the Bitcoin space in relation to a leveraged position being closed because it has lost as much value as was used to collateralize it.
M
M of N
M of N refers to a multisig contract where m represents the minimum number of signatures required to execute the contract, and n represents the total number of possible signatures. For example, in a 3-of-5 multisig contract, at least 3 of the 5 signatories must agree in order for the contract to be executed.
Mainnet
Mainnet is the main network that uses real bitcoin. Upgrades and advancements to the bitcoin protocol are often tested and vetted before being launched on mainnet.
Also see: Testnet
Market Cap
Market Cap is short for Market Capitalization and is the total value of an asset such as a cryptocurrency. The market cap of bitcoin is the current price multiplied by the total supply. You can use services like Coin Market Cap to view the market caps of Bitcoin and hundreds of different altcoins.
mBTC
mBTC is a smaller denomination of a bitcoin which is 1/1000 of 1 bitcoin. If you have 1,000 mBTC, then you have 1 entire bitcoin. 1mBTC is 100,000 satoshis and 1,000 bits.
MemPool
The MemPool is short for memory pool and it is where bitcoin transactions are pending before they are included in a bitcoin block. If you sent a bitcoin transaction and it is not yet confirmed, then it is waiting in the MemPool.
Micro-Transaction
A Micro-Transaction is a very small payment that wasn’t possible until the invention of bitcoin. The Bitcoin lightning network is working to make transactions smaller than a single satoshi.
Miner Fee
A Miner Fee, also known as a transaction fee, is the amount of bitcoin that the sender attaches to their transaction in order to incentivize a miner to confirm their transaction and add it to the blockchain.
If you don’t attach enough of a miner fee, you run the risk of your transaction getting stuck in the MemPool or being dropped from the network and returned to your wallet.
Mining Contract
A Mining Contract is a term in bitcoin cloud mining that states the terms or renting or leasing the use of a bitcoin miner. If you do not want to run your own bitcoin miners, you can sign a mining contract to earn all of the bitcoin mined by a particular miner for a predetermined amount of time.
Mining Pool
A Bitcoin Mining Pool is a group of users who pool their computational resources to increase the likelihood that they will mine the next bitcoin block. You do not need to be part of a mining pool to mine bitcoin but you are more likely to earn bitcoin when you are part of a mining pool.
Mining Rig
A Bitocin Mining rig is the hardware that is used to mine bitcoin. Historically, there have been 3 types of mining rigs: CPU, GPU, and ASIC.
Mixing
Mixing is the generic term for CoinJoin which is the act of joining your bitcoin with others to increase privacy by making it difficult to follow ownership of bitcoin on the blockchain.
Mobile Wallet
Mobile Wallets are wallets that operate on a mobile device such as an iPhone or Android device. Technically an iPad is not a “mobile” device but you can still run mobile wallets on tablets such as the iPad.
Money
Money is a technological advancement that enables humans to store value, exchange value, and account for value.
Mt. Gox
Mt. Gox was one of the first bitcoin exchanges and one of the only places that you could trade bitcoin in the early days of Bitcoin. One of the famous days in bitcoin was when Mt. Gox was hacked resulting in the loss of 850,000 bitcoins. To this day, it remains one of the largest hacks in Bitcoin history.
Multi-Sig
Multi-Sig, Multiple Signature for short, and is a feature of a bitcoin address that requires multiple signatures to send outgoing bitcoin transactions. Multi-sig addresses are more secure since they require more than one private key to spend bitcoin. Not all wallets have support for multi-sig addresses so if you would like to use multi-sig, you will need to find a wallet that supports this feature.
N
Newcoiner or New-Coiner
A Newcoiner is someone who has recently purchased or received their first fraction of a bitcoin. Newcoiners are intrigued, curious, and looking for answers as they begin their journey down the bitcoin rabbit hole.
Nocoiner or No-Coiner
A Nocoiner is an individual who does not own any bitcoin at all and they are often opposed to its use and any sort of widespread adoption. They are often uninformed and toxic in their belief that Bitcoin will never achieve any sort of widespread adoption.
Node
A Bitcoin node is a computer that validates all of the bitcoin transactions on the blockchain and enforces the consensus rules. There are multiple types of nodes: Full archival node, pruned node, mining node, lightning node, and cloud node.
Non-Custodial
Non-Custodial service is one that puts the user in control of their own private keys. All hardware wallets such as Trezor and Ledger are non-custodial.
Also see: Custodial and Client Side.
Normie
Normie is short for Normal Person who doesn’t yet fully understand bitcoin or the implications of an open and transparent monetary system that is outside of the control of any single entity. A Normie can also be anyone who simply knows nothing about bitcoin.
O
Off-Chain
Off-Chain refers to any type of transaction that takes place off of the blockchain. This can be trading on a custodial exchange, sending/receiving with a layer 2 scaling solution such as the lightning network or spending bitcoin offline with a bitcoin USB stick like OPENDIME.
On-Chain
On-Chain refers to any transaction that takes place on the blockchain. All on-chain transactions are publicly recorded and visible on the blockchain.
Orange Pill
The orange pill is a reference to The Matrix when Morpheus offers Neo a red pill and a blue pill. One pill takes him back to his apartment and the other will take him on a journey to learn “how deep the rabbit hole goes”.
The orange pill is a metaphor for waking up to the reality that Bitcoin is the only way that we can ever be free.
Orphan Block
An orphan block, also known as a stale block, is a valid block that is mined at almost the exact same time as another valid block which causes a short term split in the blockchain. Only one of the 2 chains will be built upon and the other will be dropped or “orphaned” and reverted back to the MemPool to await confirmation.
Outputs
Outputs are generated from inputs in every standard bitcoin transaction and are generated from the coinbase transaction when newly mined coins are generated.
P
Paper Wallet
A Paper Wallet is any piece of paper with a private key and the corresponding address written or printed on it. A seed phrase written down on a piece of paper is also considered a paper wallet.
Payment Channel
A Payment Channel is a type of smart contract that takes place between two parties on the lightning network. You need to be running a lightning node in order to use the lightning network and open/close payment channels.
PCB
PCB is short for Printed Circuit Board and they are the backbone of all computer boards.
Precoiner or Pre-Coiner
A Precoiner is someone who is interested in learning more about bitcoin and has begun their journey down the bitcoin rabbit hole but has yet to actually purchase their first fraction of a bitcoin.
Private Key
A Private Key is what allows someone to spend bitcoin at the corresponding address. Private keys are used to digitally sign bitcoin transactions so that they can be spent.
Proof of Work
Proof of Work is a piece of data that is difficult to produce but easy to verify that it has been solved correctly. Some common examples of proof of work are a Rubik’s Cube and a Sudoku puzzle. Difficult to solve, easy to verify that they have been solved correctly.
Q
QR Code: Quick Response Code
QR Code is short for Quick Response Code and they became the de facto means to represent a bitcoin address since it is much easier to scan a QR code than it is to type out an entire bitcoin address.
R
Raspberry Pi
Raspberry Pi is a small computer approximately the size of a credit card that is commonly used to run bitcoin nodes.
Replace By Fee
Replace By Fee, RBF for short, is a fee bumping method where the owner of any of the inputs can increase the transaction fee after the transaction has been broadcast in an attempt to be added to the blockchain sooner.
S
Satoshi Nakamoto
Satoshi Nakamoto is the pseudonym used by the creator of Bitcoin. We still do not know the true identity of Satoshi and we probably never will.
Sats
Sats, short for Satoshi, are the smallest unit of bitcoin. 1 sat is 1/100,000,000 of an entire bitcoin.
Seed Phrase
A seed phrase is a list of 12-24 common English words that contain all of the information required to restore a bitcoin wallet if it is lost, stolen, or compromised. With these 12 – 24 words, anyone can access all of the bitcoin in the corresponding wallet.
IMPORTANT: Do not ever share your seed phrase with anyone that you don’t trust 100%.
SeedSigner
SeedSigner is an open source, air-gapped, Bitcoin seed phrase generation tool, and transaction signing device built on a Raspberry Pi and other over-the-counter hardware.
Server Side
Server Side is any information that is stored on a server that is controlled by a third party rather than by the user.
Also see: Client-Side and Custodial
T
Testnet
The Testnet is an alternate version of the bitcoin blockchain to be used for testing. Testnet coins are not real bitcoins and do not have any value. They are for testing and experimenting with bitcoin transactions before pushing to the actual bitcoin blockchain.
Transaction
A Bitcoin Transaction is recorded on the blockchain when any user sends bitcoin from one address to another. A transaction can be sent from as little as a single address and sent to a single address or multiple addresses.
Transaction Confirmation
A Transaction Confirmation is when a bitcoin transaction that has been sent is added to the blockchain by a bitcoin miner.
Transportability
Transportability is how easy it is to move money from point A to point B. Bitcoin is one of the most transportable forms of money in all of history due to its borderless nature.
TXID: Transaction ID
A transaction ID, TxID, or Transaction Hash for short is a unique 64 character hexadecimal number that is used to identify a single transaction on the Bitcoin blockchain.
U
Unconfirmed Transaction
An Unconfirmed Bitcoin Transaction is any transaction that has not yet been added to the blockchain by a bitcoin miner yet. While a bitcoin transaction is waiting to be added to the blockchain, it waits in a queue of transactions called the MemPool.
UTXO: Unspent Transaction Output
UTXO, short for unspent transaction output, is a specific piece or fraction of a bitcoin that has not yet been spent.
V
Vanity Address
A Vanity Address is an address with specialized characters that you can manually select. Common vanity addresses might begin with initials, a moniker, or maybe the first few letters of your name or company.
W
Web Wallet
A web wallet is an online wallet that stores your bitcoin on the cloud or under the custody of a third party custodian such as a bitcoin exchange.
WIF
WIF is short for Wallet Import Format and is the simplest form of your private key. WIF is most commonly found on paper wallets so that it can be imported to another wallet.
X
xPub
xPub is short for xPublic Key and the key used to generate all of your bitcoin addresses. Your xPub Key is generated from your private key.
Y
yPub
Z
Zero Confirmations
Zero confirmations, sometimes abbreviated as zero conf, refers to a transaction that has been sent but is waiting in the mempool because it has not yet received any confirmations.
There is debate as to whether or not you should accept zero confirmation transactions.
Zero Knowledge
Zero-Knowledge is any system that collects zero information from a user such as a name, email, or phone number. Most bitcoin wallets as well as the blockchain itself are zero knowledge software.
Bitcoin exchanges are not zero knowledge because they are legally required to collect an array of your personal information.
All KYC exchanges are legally required to collect your personal info.