top of page

70 Essential Bitcoin Terms: A Beginner's Glossary to Understanding Bitcoin

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

A


Address

A Bitcoin address is like an email address but for payments. For example, you could share it with someone to receive Bitcoin, and it’s a long combination of letters and numbers (e.g., "139ddfNPH3DAauAi5QEiZrZn5EbbFQube6") - Funds sent to this address cannot withdrawn by the sender

Altcoin

ASIC

B

Bitcoin

Bitcoin is a form of digital money launched by Satoshi Nakamoto in 2009. For example, you can use Bitcoin to pay for goods or services online without needing a bank or PayPal.

Bitcoin Faucet

Block

Block Height

Block Time

Blockchain

C

Change Address

Imagine you buy something for $7 with a $10 bill. The leftover $3 is sent to your change address, ensuring no Bitcoin is left behind after the transaction.

Cold Wallet

Confirmation Time

Confirmations

Cryptocurrency

Cryptographic Key

D

Decentralization

In Bitcoin, decentralization means no central authority is in control. Instead, a network of computers (nodes) all work together. For example, there’s no central bank managing Bitcoin—everyone in the network does it collectively.

Difficulty Adjustment

Double Spend

Double Spending Problem

Dust

E

Exchange

An exchange is like a marketplace where you can trade Bitcoin for dollars or other cryptocurrencies. For example, using Coinbase, you can buy Bitcoin with your credit card or sell it for cash.

 

F

Fee Market

When the network is busy, you can pay higher fees to prioritize your transaction. For instance, adding a higher fee is like paying extra for express shipping to make sure your transaction is processed faster.

Fork

Full Node

G

Genesis Block

The genesis block is the first-ever block in the Bitcoin blockchain, mined by Satoshi Nakamoto in 2009. It’s like the cornerstone of a building that everything else is built upon.

 

H

Halving

Halving occurs about every four years, reducing the reward miners receive for mining a block. For instance, after the 2020 halving, the reward was cut from 12.5 BTC to 6.25 BTC.

Hardware Security Module (HSM)

Hardware Wallet

Hash

HD Wallet

I

Inflation

Bitcoin’s supply is capped at 21 million coins, so inflation in Bitcoin is controlled. For example, miners receive fewer new coins over time, making Bitcoin scarcer compared to government-issued money.


 

K

Key Pair

A key pair consists of a public key and a private key. The public key is like an email address for receiving Bitcoin, while the private key is like the password you need to send it.

 

L

Ledger

A ledger is a record of all transactions. The blockchain is Bitcoin’s public ledger, keeping track of every Bitcoin sent or received, like an accountant’s record book for everyone to see.

Lightning Network

M

Mainnet

Mainnet is Bitcoin’s primary network where real transactions happen. For instance, developers also use a separate "testnet" to experiment without using real Bitcoin.

Mempool

Miner

Mining

Mnemonic Phrase

N

Nonce

A nonce is a number miners change when trying to find a valid hash. For instance, miners continuously guess different nonces until they find the one that produces the correct hash for the next block.

Node

O

Open Source

Bitcoin is open source, which means its code is available for anyone to inspect or improve. It’s like Wikipedia but for software; everyone can contribute to or review the code.

Orphaned Transaction

P

Paper Wallet

A paper wallet is a printed document containing your Bitcoin keys. For example, you can write down your public and private keys and store them securely to keep your Bitcoin offline.

Peer-to-Peer (P2P)

Bitcoin is peer-to-peer, meaning users interact directly without intermediaries. For example, Alice can send Bitcoin directly to Bob without needing a bank.

Private Key

Proof of Work (PoW)

Public Key


Q

QR Code

A QR code is a scannable image that represents your Bitcoin address. It’s used to make payments easier, like scanning a barcode at the store to quickly pull up the item’s information.

 

R

Recovery Seed

A recovery seed is a set of words used to recover your wallet if it gets lost. For example, it’s like a backup key that helps you regain access to your funds.

Replay Attack

Reward


S

Satoshi

The smallest unit of Bitcoin, equals to 0.00000001 BTC. For example, when buying very small amounts of something, you may use satoshis instead of whole Bitcoin.

Script

ScriptSig

Signature

SegWit (Segregated Witness)

Soft Fork

SPV (Simplified Payment Verification)

Supply Cap

T

Testnet

Testnet is a version of the Bitcoin network used for testing purposes. For example, developers can use testnet to try new features without risking real Bitcoin.

Transaction

Transaction Fee

Trustless

Two-Factor Authentication (2FA) Wallet

 

U

UTXO (Unspent Transaction Output)

After making a Bitcoin payment, any leftover amount becomes an unspent output (UTXO). For example, spending 1 BTC and receiving 0.3 BTC in change leaves a UTXO of 0.3 BTC.


 

V

Validator

A validator checks the validity of a transaction before it’s added to the blockchain. They’re like referees ensuring every transaction follows the rules.

Vanity Address Generation


W

Wallet

A wallet is a software or hardware tool used to store, send, and receive Bitcoin. For example, you might use a mobile app to manage your Bitcoin holdings.

Whitepaper

The Bitcoin whitepaper, written by Satoshi Nakamoto, explains how Bitcoin works. It’s like an instruction manual that lays out the purpose and technology behind Bitcoin.






Recent Posts

See All
bottom of page