A
Address — ATH (All-Time High) · 6 terms
Address
A Bitcoin address is a string of characters that tells a wallet where to send bitcoin. Unlike an email address, it is meant to be used once: reusing one lets others link its payments to the same owner, and wallets can create a new address for each payment. Depending on the format, an address encodes a hash of a public key, a hash of a script, or (for Taproot) a public key. Formats include Legacy (starting with 1), Pay-to-Script-Hash (starting with 3, sometimes wrapping SegWit), native SegWit (starting with bc1q) and Taproot (starting with bc1p). Learn more in Cryptography & Bitcoin →
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Air-Gapped
Describes a device that is never connected to the internet or to any other network, so it cannot be reached over one. In Bitcoin, an air-gapped signing device keeps the private keys and exchanges only unsigned and signed transactions with an online computer, for example as QR codes or files on a memory card, in a standard format such as PSBT. The gap removes network attack paths, but data still crosses it, so tampered firmware can leak the seed through the signatures it makes; the gap also does not protect the device or its seed phrase backup from physical theft. Learn more in Advanced Security →
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Altcoin
Short for "alternative coin": any cryptocurrency other than Bitcoin. The term covers thousands of coins and tokens launched since 2009 (CoinGecko listed more than 22,000 in October 2026), whose designs and supply rules vary.
AML (Anti-Money Laundering)
Anti-Money Laundering: the laws and controls meant to stop criminals from passing off illegally obtained money as legitimate. They require regulated firms, including bitcoin exchanges where national law covers them, to verify customers (KYC), keep records, monitor transactions and report suspicious activity to the authorities. The Financial Action Task Force (FATF) sets the international standards, which since October 2018 also cover virtual asset service providers such as exchanges (detailed rules followed in June 2019); each country writes its own laws. Learn more in Bitcoin and the Law →
ASIC
Application-Specific Integrated Circuit: a chip designed for one particular task rather than for general-purpose use. Bitcoin mining ASICs are built solely to compute SHA-256 hashes at extremely high speeds. ASICs are orders of magnitude more efficient at mining than general-purpose CPUs or GPUs, and as of 2026 they dominate Bitcoin mining. Learn more in Mining & Consensus →
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ATH (All-Time High)
The highest price bitcoin has reached, measured in a given currency and on a given price source (an all-time high in US dollars can fall on a different day than one in Japanese yen). Used as a market reference point. See live price →
B
BIP (Bitcoin Improvement Proposal) — Block Weight · 7 terms
BIP (Bitcoin Improvement Proposal)
A design document that proposes a change to Bitcoin or a standard for software that uses it, such as wallets. BIPs go through public review; a BIP number does not mean the proposal was adopted, and no single body decides adoption. Notable BIPs include BIP 32 (HD wallets), BIP 39 (mnemonic seed phrases), BIP 141 (SegWit), and BIPs 340–342 (Schnorr, Taproot, Tapscript). Learn more in Bitcoin Development →
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Bitcoin (BTC)
A decentralized digital currency that operates on a peer-to-peer network without any central authority. Created in 2009 by the pseudonymous Satoshi Nakamoto, Bitcoin uses cryptographic proof instead of trust, allowing any two parties to transact directly. Its consensus rules, checked by every full node, limit total issuance to just under 21 million coins (20,999,999.9769 BTC). Learn more in What Is Bitcoin? →
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Block
A bundle of Bitcoin transactions that has been validated and added to the blockchain. Each block contains a header (with metadata like the previous block's hash, a timestamp, and a nonce) and a body (the list of transactions). On average, a new block is found approximately every 10 minutes. Learn more in How Bitcoin Works →
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Blockchain
A distributed, append-only ledger that records every on-chain Bitcoin transaction in chronological blocks (off-chain payments, such as Lightning payments, are not recorded one by one; only the transactions that open, resize, or close channels are). Each block is cryptographically linked to the previous one by including its hash, forming an unbroken chain back to the genesis block. This structure makes the transaction history tamper-evident and verifiable by anyone running a node. Learn more in How Bitcoin Works →
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Block Height
The sequential number assigned to each block in the blockchain, starting from zero for the genesis block. Block height serves as a universal reference point for identifying when events occurred on the Bitcoin network. For example, the first halving happened at block height 210,000.
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Block Reward
The amount a miner may claim for mining a block: the block subsidy (newly created bitcoin) plus the fees paid by the block's transactions. The subsidy started at 50 BTC in 2009 and halves every 210,000 blocks (about four years). Since the April 2024 halving at block 840,000 it is 3.125 BTC; it halves to 1.5625 BTC at block 1,050,000. Subsidy and fees together are the incentive for miners to secure the network. Learn more in Bitcoin Economics →
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Block Weight
A measure of a block's size introduced by SegWit, counted in weight units (WU). Each block has a maximum weight of 4,000,000 WU. Witness data (signatures and other unlocking data) counts as 1 WU per byte, while other transaction data counts as 4 WU per byte. This replaced the old 1 MB block size limit and makes witness data cheaper per byte than other transaction data. Learn more in Protocol Improvements →
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C
Capital Gains — Cypherpunk · 12 terms
Capital Gains
The profit made when an asset is sold, spent or exchanged for more than its cost basis (usually what was paid for it, including fees); selling for less gives a capital loss. How gains on bitcoin are taxed depends on the country. In the US, the IRS treats bitcoin as property, so selling, spending or swapping it can create a capital gain or loss; a gain on bitcoin held one year or less (short-term) is taxed at ordinary income rates, and a gain on bitcoin held longer (long-term) may be taxed at lower rates. Learn more in Bitcoin and the Law →
CBDC (Central Bank Digital Currency)
Digital money issued by a central bank. Unlike Bitcoin, a CBDC is centrally controlled and has no fixed supply cap. Depending on its design, a CBDC could allow spending restrictions to be programmed in; the ECB, for example, says the digital euro would never be programmable money. Learn more in Why Bitcoin Matters →
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Censorship Resistance
The property of a payment system in which no single party, such as a bank, company or government, can block or reverse valid payments or decide who may use it. In Bitcoin, any node can relay a valid transaction and any miner can include it, so keeping one out for good would take a majority of the hash rate. This is about access to the network; protection against seizure also depends on who holds the private keys. Learn more in Why Bitcoin Matters →
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CEX (Centralized Exchange)
A centralized exchange — a company that holds your funds and facilitates trades. Examples: Coinbase, Kraken, Binance. You must trust them with your bitcoin until you withdraw. Learn more in How to Get Started →
Coinbase Transaction
The first transaction in every block, created by the miner who found it (not to be confused with the exchange named Coinbase). Its single special input spends no earlier output; instead it claims the block subsidy, which is newly issued bitcoin, plus the fees paid by the block's other transactions. It is the only way new bitcoin enters circulation, and its outputs cannot be spent until 100 more blocks have been mined. Learn more in Mining & Consensus →
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CoinJoin
A privacy technique where multiple users combine their Bitcoin transactions into a single transaction, making it difficult for outside observers to determine which inputs correspond to which outputs. CoinJoin does not require trust between participants and preserves self-custody throughout the process. How much privacy it gives depends on the implementation, the number of participants, and how the resulting coins and any change are spent afterwards. Learn more in Bitcoin Privacy →
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Cold Storage
A method of keeping Bitcoin private keys offline, away from internet-connected devices. Options include hardware wallets and air-gapped computers; the Bitcoin Wiki calls single-key paper wallets an obsolete and unsafe method. The bitcoin.org guide says cold storage provides the highest level of security for savings; it still depends on keeping reliable backups of the seed phrase. Learn more in Storing Bitcoin Safely →
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Confirmation
A count of the blocks that confirm a transaction: the block that includes it plus every block added after it. One confirmation means the transaction is in the latest block; six (about one hour) is the number Bitcoin Core's wallet recommends before accepting a payment. That figure assumes an attacker with no more than 10% of the hash rate and a risk below 0.1%; recipients set their own thresholds, and the Bitcoin Wiki suggests more for very large amounts. Learn more in Using Bitcoin →
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Consensus
The process by which all nodes on the Bitcoin network agree on the current state of the blockchain. Bitcoin achieves consensus through its Proof of Work mechanism and a set of rules that every full node independently enforces. No single entity can change these rules without broad agreement from the network. Learn more in Mining & Consensus →
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Covenant
A spending condition that limits not only who can spend bitcoin and when, but also where it can go next, for example only to a preset address, or to a holding address it can leave only after a delay. Bitcoin's Script has no opcode designed for this today, and adding one would take a soft fork. Proposals include OP_CHECKTEMPLATEVERIFY (BIP 119) and OP_CHECKCONTRACTVERIFY (BIP 443); as of October 2026 none is active on Bitcoin's main network. Uses discussed include vaults (where a delay lets the owner block a theft), payment pools (outputs shared by several users) and inheritance plans. Learn more in Protocol Improvements →
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Custodial
A service or wallet where a third party controls the private keys and holds the bitcoin for you. Centralized exchanges and some web wallets are custodial: they manage the keys so you do not have to, but if the custodian is hacked, shuts down or goes bankrupt, you may lose access to your bitcoin. The saying "Not your keys, not your coins" summarizes that risk. Learn more in Storing Bitcoin Safely →
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Cypherpunk
A member of an informal movement of cryptographers, programmers and privacy activists who promoted strong cryptography to protect privacy and individual freedom. It grew around the Cypherpunks mailing list, started in 1992; Eric Hughes' "A Cypherpunk's Manifesto" (1993) summed up its approach as "Cypherpunks write code." Ideas Bitcoin builds on came from this circle, including Adam Back's Hashcash and Wei Dai's b-money, both cited in the Bitcoin whitepaper. Learn more in Bitcoin History →
D
DCA (Dollar-Cost Averaging) — Double Spend · 8 terms
DCA (Dollar-Cost Averaging)
A strategy of buying bitcoin with the same amount of money at regular intervals, regardless of price, so you buy more when the price is low and less when it is high. It reduces the risk of buying everything at a short-term peak; it does not guarantee a profit or prevent losses. Learn more in Bitcoin Economics →
Decentralized
A system with no single point of control or failure. Bitcoin's rules are enforced independently by thousands of nodes, so no company, government or individual can change them alone. Block production is more concentrated: in the year to October 2026, five mining pools found about 77% of blocks. A single pool can delay a transaction by leaving it out of its own blocks, but cannot keep it out of the chain without a majority of hash rate. Learn more in Why Bitcoin Matters →
DeFi (Decentralized Finance)
Financial services such as lending, borrowing and trading run by software (smart contracts) instead of banks. Most DeFi runs on other blockchains (about 95% of the value locked in DeFi as of October 2026, per DefiLlama); using bitcoin there means a wrapped or bridged version, which adds trust in a custodian, federation or bridge. Learn more in Advanced Topics →
Deflation
A sustained fall in the general price level, so that each unit of money buys more over time; the opposite of inflation. Economists debate its effects: falling prices raise the real burden of debts and can lead people to delay purchases, though some separate price falls driven by weak demand from those driven by productivity. Bitcoin is described as deflationary because its supply is capped at 21 million, although new coins are issued, at a falling rate, until block 6,930,000, expected around 2140. Learn more in Bitcoin Economics →
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DEX (Decentralized Exchange)
A platform where trades are handled by software rather than by a company holding customer accounts, either peer-to-peer or against a pool of funds. Some DEXs run on other blockchains and trade tokens that represent bitcoin, backed by a custodian, federation or bridge. Some peer-to-peer DEXs trade native bitcoin, locking both traders' funds in a shared escrow (a 2-of-2 multisig) until the trade completes. Learn more in How to Get Started →
Difficulty
A number that determines how hard it is for miners to find a valid block hash. The difficulty adjusts every 2,016 blocks to maintain an average block time of approximately 10 minutes. Higher difficulty means more computational work is required, which reflects greater network security. See live difficulty →
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Difficulty Adjustment
An automatic recalibration of mining difficulty every 2,016 blocks (about two weeks). If the last 2,016 blocks came faster than one per 10 minutes, difficulty rises; if slower, it falls. Each adjustment is capped at a factor of four in either direction. This keeps the average block time close to 10 minutes over the long run, though blocks run somewhat faster while hash rate is growing. Learn more in Mining & Consensus →
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Double Spend
The attempt to spend the same bitcoin twice. Digital cash faced this problem before Bitcoin; earlier designs relied on a trusted central party, or mint, to check every transaction. Bitcoin solves the double-spend problem through Proof of Work and the blockchain, which provides a single, agreed-upon transaction history. Protection grows with confirmations: an unconfirmed payment can still be replaced, and each new block makes a confirmed one harder to reverse. Learn more in How Bitcoin Works →
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E
ECDSA — Exchange · 4 terms
ECDSA
Elliptic Curve Digital Signature Algorithm. The original cryptographic signature scheme used in Bitcoin to prove ownership of funds without revealing the private key. ECDSA allows anyone to verify that a transaction was authorized by the rightful owner. Bitcoin uses the secp256k1 elliptic curve for ECDSA signatures. Learn more in Cryptography & Bitcoin →
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Eclipse Attack
An attack in which an adversary controls all of a node's connections to the network, so the node sees only the blocks and transactions the attacker relays. An eclipsed node can be kept unaware of payments, shown an outdated chain, or used to help double-spend against its owner, without the attacker needing a majority of the hash rate. The term comes from earlier peer-to-peer network research; a 2015 study by Heilman, Kendler, Zohar and Goldberg showed how it applies to Bitcoin. Node software lowers the risk by, among other things, spreading outbound peers across address ranges. Learn more in Advanced Topics →
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ETF (Exchange-Traded Fund)
A fund whose shares trade on stock exchanges. A spot bitcoin ETF holds bitcoin through a custodian; in the US, where such products were approved in January 2024, they are legally trusts rather than registered funds. A futures ETF holds bitcoin futures instead. Investors own shares, not bitcoin, and pay an annual fee. Learn more in Bitcoin Economics →
Exchange
A platform or service for buying, selling or trading bitcoin for fiat currency or other assets. Centralized exchanges hold customer funds and check identity (KYC) where anti-money-laundering rules require it; peer-to-peer markets and decentralized exchanges differ in whether a platform holds funds during a trade. Customers can lose access to bitcoin left on an exchange if it is hacked, shuts down or goes bankrupt; moving it to your own wallet removes that risk but makes you responsible for your keys and backups. Learn more in How to Get Started →
F
Fee — Full Node · 5 terms
Fee
The amount of bitcoin a transaction leaves unclaimed (inputs minus outputs), which the miner who includes it collects. Wallets set it by choosing a fee rate in satoshis per virtual byte (sat/vB); miners generally include higher fee-rate transactions first, so a higher rate usually means faster confirmation. Fees vary with demand for block space. Learn more in Using Bitcoin →
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Fee Rate
The price a user pays per unit of transaction data to have their transaction included in a block, measured in satoshis per virtual byte (sat/vB). Fee rates fluctuate based on demand for block space. When the mempool is congested, fee rates rise; when it is nearly empty, low-fee transactions can confirm quickly, down to the minimum that nodes relay (a node setting: 0.1 sat/vB by default in Bitcoin Core since version 29.1, September 2025). See live fees →
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Fiat
Government-issued currency not backed by a commodity like gold. Examples include the US dollar, euro and yen. "Fiat" is Latin for "let it be done": the money is legal tender by government decree, and its value rests on people's trust that others will accept it. Unlike bitcoin, fiat currencies have no fixed supply cap: central banks issue banknotes and reserves, and commercial banks create new money as deposits when they lend, within limits set by regulation. Learn more in Bitcoin Economics →
Fork
A change to the Bitcoin protocol rules. A soft fork is a backward-compatible change where old nodes still accept new blocks (e.g., SegWit). A hard fork is a non-backward-compatible change that creates a permanent chain split if not universally adopted. Bitcoin's planned rule changes in recent years have been soft forks (SegWit 2017, Taproot 2021); groups that wanted hard-fork changes split off into separate coins, such as Bitcoin Cash in 2017. "Fork" can also mean a temporary split when two miners find blocks at the same height. Learn more in Protocol Improvements →
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Full Node
A computer running Bitcoin software that independently checks every block and transaction against the consensus rules, instead of relying on someone else's server. (By default, Bitcoin Core skips signature checks for older blocks under its "assumed valid" setting; this can be turned off.) Running one lets you verify your own payments and adds an independent rule-enforcer to the network. Learn more in Running a Bitcoin Node →
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H
Halving — Hot Wallet · 7 terms
Halving
An event that occurs every 210,000 blocks (approximately every four years) where the block subsidy, the newly created bitcoin paid to miners, is cut in half. Halvings enforce Bitcoin's disinflationary monetary policy and ensure that the total supply will never exceed 21 million coins. The fourth halving occurred at block 840,000 on April 20, 2024, cutting the subsidy to 3.125 BTC; the fifth is due at block 1,050,000, around 2028 at the recent pace of blocks. Learn more in Bitcoin Economics →
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Hardware Wallet
A small dedicated device designed to create and store a wallet's private keys and sign transactions inside itself, so the keys do not leave it. The computer or phone it is paired with prepares and broadcasts transactions but only receives signatures, which protects the keys from malware on that computer or phone. It is a form of cold storage, but it does not protect the seed phrase backup, and its protection depends on genuine firmware and on the owner checking payment details on its own screen, since malware can change what the computer shows. Learn more in Storing Bitcoin Safely →
Hash
The output of a cryptographic hash function — a fixed-length string of characters that acts as a fingerprint of the input data. Bitcoin primarily uses SHA-256; finding two inputs with the same SHA-256 output is computationally infeasible, so in practice each fingerprint is unique. A hash is deterministic (same input always produces the same output), but it is computationally infeasible to reverse-engineer the input from the output. Learn more in Cryptography & Bitcoin →
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Hash Rate
The total computing power mining Bitcoin, measured in hashes per second and estimated from how fast blocks are found at the current difficulty. A higher hash rate makes a 51% attack more expensive. The energy mining uses depends on both hash rate and the efficiency of mining machines. Network hash rate is quoted in exahashes per second (EH/s). Learn more in Mining & Consensus →
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HD Wallet
Hierarchical Deterministic wallet. A wallet that generates all of its key pairs from a single master seed. This means one backup of the seed phrase can restore all past and future addresses, as long as you also know the wallet type (derivation path), any passphrase, and, for multisig, the other cosigners' details. HD wallets follow BIP 32 and are standard in modern Bitcoin wallets. Learn more in Storing Bitcoin Safely →
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HODL
A misspelling of "hold" in a Bitcoin forum post titled "I AM HODLING" (December 18, 2013), later read as an acronym for "Hold On for Dear Life." It describes buying bitcoin and holding it long-term through price swings rather than trading on short-term moves; the outcome depends on future prices, which can fall as well as rise.
Hot Wallet
A Bitcoin wallet that is connected to the internet, such as a mobile wallet app or a browser extension. Hot wallets are convenient for everyday transactions but are more vulnerable to hacking than cold storage. Like cash carried in a pocket, a hot wallet offers easy access but a higher risk of theft. Learn more in Storing Bitcoin Safely →
L
Layer 2 — Liquidity · 6 terms
Layer 2
A system built on top of Bitcoin for faster or cheaper transactions that ultimately settle on the main chain. The Lightning Network is one example. Systems described as Bitcoin Layer 2s differ in whether you can move your bitcoin back to the main chain without relying on a third party: a Lightning user can close a channel on-chain alone, while some other systems need a group of signers to release the bitcoin. Learn more in Lightning Network →
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Legal Tender
Money that a country's law recognizes as valid for settling debts, including taxes and other payments owed. National banknotes and coins are the usual example. What legal tender status requires in practice, for example whether shops must accept it for everyday purchases, differs from country to country. Something can be legal to own and to pay with without being legal tender. Learn more in Bitcoin Around the World →
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Lightning Capacity
The total amount of bitcoin locked in public Lightning Network channels. It shows the network's size, not how much can be sent at once: each channel's funds are split between its two sides, and a payment is limited by the balances available along the route or routes it uses. Unannounced (private) channels are not counted. See live Lightning stats →
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Lightning Channel
A two-party payment channel on the Lightning Network, opened by locking bitcoin in a 2-of-2 multisig output on the main blockchain. While it is open, the two parties can make near-instant off-chain payments to each other, limited by each side's balance, and can forward payments for others. When the channel closes, the final balances are settled on-chain. Learn more in Lightning Network →
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Lightning Network
A Layer 2 payment protocol built on top of Bitcoin for near-instant, low-fee payments. Users open payment channels with each other, and payments can hop across several channels, so you can pay people you have no direct channel with. The main blockchain records the transactions that open, resize, or close channels, not each payment. Learn more in Lightning Network →
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Liquidity
The ease with which bitcoin can be bought or sold without significantly affecting its price. High liquidity means there are many buyers and sellers, resulting in tighter spreads and more efficient markets. On the Lightning Network, liquidity refers to the amount of bitcoin available in payment channels for sending, receiving, and routing payments.
M
Mempool — Multisig · 9 terms
Mempool
Short for "memory pool." Each Bitcoin node maintains its own mempool — a waiting area for valid transactions that have been broadcast to the network but not yet confirmed in a block. Miners select transactions from the mempool to include in the next block, generally prioritizing those that pay the highest fee rate (fee per unit of size, in sat/vB). Learn more in How Bitcoin Works →
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Merged Mining
Mining two or more blockchains that use the same Proof of Work algorithm at once, with the same work. In merged mining with Bitcoin, the miner puts a reference to the other chains' blocks in the coinbase transaction of the Bitcoin block it is mining, so a hash that meets another chain's own target counts there even if it misses Bitcoin's. Rootstock (RSK), a Bitcoin sidechain, has its blocks secured this way, so their security depends on how much of Bitcoin's hash rate takes part; moving bitcoin in and out of it relies on a separate group of signers. Learn more in Advanced Topics & Research →
Merkle Root
The single hash at the top of a block's Merkle tree, stored in the block's 80-byte header. It commits to every transaction in the block and to their order: changing or removing any transaction, or adding a new one, changes the Merkle root, which changes the block hash and invalidates the block's proof of work. This is what lets the small header stand for the whole set of transactions. Learn more in How Bitcoin Works →
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Merkle Tree
A structure, named after cryptographer Ralph Merkle, that sums up many items in one hash: items are hashed, the hashes are paired and hashed again, and so on until one hash, the Merkle root, remains. Bitcoin builds one per block from its transactions, using double SHA-256. A Merkle proof, the short chain of hashes from one transaction to the root, shows that the transaction is in a block without downloading the whole block, which is how SPV wallets work. Learn more in Cryptography & Bitcoin →
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Metcalfe's Law
The idea that a network's value grows in proportion to the square of the number of its connected users (n²), because n users can form n(n−1)/2 pairwise connections. It is named after Robert Metcalfe, the engineer behind Ethernet. It is a rule of thumb rather than a law of nature: researchers debate whether n² or another curve, such as the slower-growing n log n or the faster-growing n³, fits real networks better, and fitting it to Bitcoin's price is one modeling approach among several. Learn more in Why Bitcoin Dominance Matters →
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MEV
Miner Extractable Value, also called Maximal Extractable Value: extra profit a block producer can make by choosing which transactions to include, leave out or reorder, beyond the block reward and standard fees. The term comes from Ethereum, where on-chain trading creates openings such as front-running. Bitcoin's UTXO model makes such applications harder to build, so there are fewer; concerns remain where the timing of a confirmation decides who gets paid, as in Lightning channel closes, and where side payments to large pools could push mining toward centralization. Learn more in Advanced Topics →
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Mining
The process of using computational power to solve a cryptographic puzzle (finding a hash below a target value) in order to add a new block of transactions to the blockchain. Mining secures the network, processes transactions, and introduces new bitcoin into circulation via the block reward. Learn more in Mining & Consensus →
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Mixing
Combining bitcoin from several users so that observers of the public blockchain find it harder to trace which inputs paid which outputs. It is done through a custodial service that takes coins and returns different ones (a mixer or tumbler), which means trusting the operator, or through a collaborative transaction such as CoinJoin, where users keep their keys. Mixing improves on-chain privacy but is not anonymity; some exchanges treat mixed coins as higher-risk, and some governments have seized or sanctioned mixing services. Learn more in Bitcoin Privacy →
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Multisig
Short for multi-signature. A Bitcoin script configuration that requires more than one private key to authorize a transaction (e.g., 2-of-3 multisig requires two out of three keyholders to sign). Multisig is designed to avoid a single point of failure, at the cost of a more complex setup: losing the wallet's setup details (such as all the public keys) or too many private keys can make the funds unspendable. Uses include cold storage, business treasuries, and collaborative custody. Learn more in Advanced Security →
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O
On-Chain — Output · 4 terms
On-Chain
Transactions or data recorded directly on the Bitcoin blockchain. Publicly visible and independently verifiable by anyone running a node. Learn more in How Bitcoin Works →
Opcode
Short for operation code: a one-byte instruction in Bitcoin Script, written with the prefix OP_. Each tells the script interpreter to do one thing, such as copy an item (OP_DUP), hash it (OP_HASH160), check a signature (OP_CHECKSIG) or check a timelock (OP_CHECKLOCKTIMEVERIFY). Some original opcodes, such as OP_CAT, were later disabled over concerns about bugs, and new ones are added by soft fork, which reuses a spare code, as OP_CHECKLOCKTIMEVERIFY did (BIP 65). Learn more in Bitcoin Scripting →
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Orphan Block
A valid block that was mined but left out of the best chain (the one with the most accumulated proof of work) because a competing block at the same height had its chain extended first. The precise term is "stale block"; developers use "orphan block" for a block whose parent a node has not seen yet, though everyday usage mixes the two. Stale blocks happen when two miners find a block at nearly the same time.
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Output
The destination portion of a Bitcoin transaction that specifies an amount and the conditions (script) under which those funds can be spent. Each transaction can have multiple outputs — typically one paying the recipient and one returning change to the sender. Unspent outputs (UTXOs) represent available bitcoin. Learn more in How Bitcoin Works →
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P
P2PKH — Public Key · 8 terms
P2PKH
Pay-to-Public-Key-Hash. One of Bitcoin's original output types, behind legacy addresses that start with 1. The output holds a 20-byte hash of the recipient's public key (SHA-256, then RIPEMD-160); to spend it, the owner shows the full public key and a signature, and the script checks that the key matches the hash and that the signature is valid (OP_DUP OP_HASH160 … OP_EQUALVERIFY OP_CHECKSIG). SegWit and Taproot single-key outputs take less block space to spend. Learn more in Bitcoin Scripting →
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Peer-to-Peer (P2P)
A network architecture where participants interact directly with each other without a central intermediary. Bitcoin is a peer-to-peer electronic cash system — transactions flow directly between users, and every node is an equal participant in relaying and validating data. Learn more in What Is Bitcoin? →
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Private Key
A secret 256-bit number that allows the holder to spend bitcoin associated with the corresponding public key. Anyone who knows it can move the funds. Private keys are typically stored within wallet software or on hardware devices and are backed up via seed phrases. Learn more in Cryptography & Bitcoin →
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Proof of Work
The consensus mechanism Bitcoin uses to agree on which new block extends the chain, and therefore on the order of transactions. (Each node separately checks that transactions follow the rules.) Miners expend real-world computational energy to find a hash that meets a target difficulty, proving they did the work. This makes rewriting past blocks costly, because an attacker would have to redo the work of those blocks and every block after them, while anyone can verify the result with a single hash. Learn more in Mining & Consensus →
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Protocol
A set of rules that defines how computers exchange and interpret data, so that systems built by different people can work together. TCP/IP, which carries internet traffic, and HTTP, which carries web pages, are protocols. The Bitcoin protocol is the rule set for transactions, blocks and network messages that every full node checks for itself; programs such as Bitcoin Core implement it, and changing it needs broad agreement across the network. Learn more in What Is Truly Bitcoin →
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PSBT
Partially Signed Bitcoin Transaction. A standardized format (BIP 174) that allows a Bitcoin transaction to be created and passed between multiple parties for signing before it is broadcast. PSBTs are widely used for multisig setups, hardware wallets, and air-gapped signing, because the signing device can stay offline and each signer adds only its own signature. Learn more in Advanced Security →
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Pseudonymous
Acting under a consistent identifier that is not a legal name. Bitcoin is pseudonymous: transactions are recorded publicly under addresses, not names, so anyone can follow coins between addresses but cannot see directly who controls them. Once an address is linked to a person, for example through an exchange's identity checks, the payments involving it can be traced to them, and reusing addresses links more payments together. The whitepaper's privacy model relies on keeping public keys unlinked from identities. Learn more in Bitcoin Privacy →
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Public Key
A cryptographic key, derived from a private key, that can be shared openly. Public keys are used to generate Bitcoin addresses and to verify digital signatures. While a public key can be freely distributed, it is computationally infeasible for ordinary computers to derive the private key from it. Learn more in Cryptography & Bitcoin →
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S
Satoshi (unit) — Swap · 15 terms
Satoshi (unit)
The smallest unit of bitcoin recorded on the blockchain, equal to 0.00000001 BTC (one hundred-millionth of a bitcoin). Named after Bitcoin's creator, Satoshi Nakamoto. Because one bitcoin divides into 100 million sats, small amounts can be sent, though on-chain fees and the dust limit make very small on-chain payments impractical: by default, Bitcoin Core does not relay a transaction that creates an output worth less than a few hundred sats. The common abbreviation is "sat" or "sats." Learn more in Using Bitcoin →
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Satoshi Nakamoto
The pseudonymous person (or group) who created Bitcoin, authored the whitepaper in 2008, and developed the original software. Satoshi created the genesis block (dated January 3, 2009), posted publicly for the last time in December 2010, and sent the last known private emails in April 2011. As of October 2026, no claim about Satoshi's identity has been proven. Learn more in Bitcoin History →
Schnorr Signature
A digital signature scheme activated in Bitcoin as part of the Taproot upgrade (BIP 340). Schnorr signatures are more efficient than ECDSA and enable key aggregation: several public keys can be combined into one (for example with MuSig2, BIP 327), so a multisig spent that way looks like a single-signature spend on-chain, which improves privacy. Learn more in Cryptography & Bitcoin →
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Script
Bitcoin's simple, stack-based programming language used to define the conditions under which a transaction output can be spent. Script is intentionally not Turing-complete: it has no loops, so a script cannot run forever and tie up the nodes that check it. Script types include Pay-to-Public-Key-Hash (P2PKH), Pay-to-Script-Hash (P2SH), and Pay-to-Witness-Public-Key-Hash (P2WPKH). Learn more in Bitcoin Scripting →
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Seed Phrase
A list of words (12, 15, 18, 21 or 24 under the BIP 39 standard) that encodes a random number; a wallet derives all of its keys from these words, plus an optional passphrase. Anyone who has the words, and the passphrase if one was set, can restore all associated keys and funds, including someone who finds a copy stored online or in a cloud service. Not every wallet uses BIP 39: Electrum, for example, uses its own format. Learn more in Storing Bitcoin Safely →
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SegWit
Segregated Witness. A soft fork activated in August 2017 (BIP 141) that separates ("segregates") signature data ("witness") from transaction data. SegWit fixed third-party transaction malleability for transactions whose inputs all use SegWit, raised block capacity (a block weight limit of 4 million units), and paved the way for the Lightning Network. Native SegWit (version 0) addresses start with "bc1q"; older wrapped SegWit addresses start with "3". Learn more in Protocol Improvements →
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Self-Custody
Holding your own bitcoin in a wallet where only you control the private keys. No company holds your funds, so none can freeze or lose them, but no one can recover them for you if you lose your keys and every backup, such as your seed phrase. The saying "Not your keys, not your coins" argues for self-custody. Learn more in Storing Bitcoin Safely →
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SHA-256
A cryptographic hash function from the SHA-2 family, specified by the US National Institute of Standards and Technology (NIST) in FIPS 180-4. It turns any input (up to about 2.3 million terabytes) into a 256-bit (32-byte) output, designed so that finding two inputs with the same output, or an input for a given output, is computationally infeasible. Bitcoin applies it twice (double SHA-256) to hash block headers for Proof of Work and to make transaction IDs, and together with another hash function, RIPEMD-160, to make the public key hash in P2PKH and native SegWit (P2WPKH) addresses. Learn more in Cryptography & Bitcoin →
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Sidechain
A separate blockchain whose coins are pegged to bitcoin, so BTC can move between the two through a two-way peg. Sidechains allow features such as confidential transactions without changing Bitcoin's base layer. Examples include Liquid and Rootstock; on both, as of October 2026, the locked BTC is held in a multisig run by a group of signers, so users rely on that group. Learn more in Advanced Topics & Research →
Soft Fork
A backward-compatible change to the Bitcoin protocol where old nodes still accept blocks produced under the new rules. Because soft forks tighten the rules, they avoid a permanent chain split as long as most hash power enforces the new rules (a short split happened in July 2015 when some miners did not). Notable soft forks include SegWit (2017) and Taproot (2021). Learn more in Protocol Improvements →
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SPV
Simplified Payment Verification. A method described in the Bitcoin whitepaper that lets a lightweight client confirm a transaction was included in a block without downloading the entire blockchain: it downloads only block headers and uses Merkle proofs. SPV clients do not check every rule, so they rely on the chain with the most work being valid. Other lightweight methods include asking a server or using compact block filters. Learn more in How Bitcoin Works →
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Stablecoin
A token designed to keep a steady value against a reference asset, usually the US dollar. Most, by value (as of October 2026), come from companies that hold reserves and aim to redeem tokens one to one; reserves differ by issuer and over time (USDT's included bitcoin, gold and secured loans in mid-2026). Others, such as DAI, are issued by smart contracts against collateral that can include crypto, other stablecoins and tokenized real-world assets. A stablecoin's value depends on its issuer or mechanism holding the peg; the two largest issuers, Tether and Circle, can freeze tokens, while bitcoin has no issuer to do so. Learn more in Why Bitcoin Dominance Matters →
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Stock-to-Flow
A ratio, abbreviated S2F, of an asset's existing supply (the stock) to its new production per year (the flow): the number of years current production would take to match what already exists. It has been applied to gold and silver. In 2019 an analyst writing as PlanB published a model linking bitcoin's ratio, which rises at each halving, to its market value. The model is contested: supporters point to how it tracked prices from 2019 into early 2022, while critics note that prices then fell well below its path, question its statistics, and point out that it leaves out demand. Learn more in Bitcoin Economics →
Strategic Bitcoin Reserve
A holding of bitcoin kept by a government, national or regional, as a long-term reserve asset, in the way states hold gold or foreign currency, rather than sold. Proposals and laws differ in how a reserve is funded (for example, from coins forfeited in legal cases or from purchases), how it is held, and whether and when it may sell. Which governments have one, and how much they hold, changes over time. Learn more in The Saylor Playbook →
Swap
Exchanging one cryptocurrency for another. On YouBuyBitcoin, swapping means converting crypto like ETH or USDT into native bitcoin through a third-party swap provider: you send your coins to the provider, it sends BTC to your wallet, and your coins pass through it during the swap. Learn more in How to Get Started →
T
Taproot — TXID · 5 terms
Taproot
A soft fork activated in November 2021 (BIPs 340, 341, 342) that introduced Schnorr signatures, MAST (a Merkle tree of alternative spending scripts), and Tapscript. When a Taproot output is spent with its key, it looks like a simple payment on-chain; when spent with a script, only the script used is revealed. Taproot addresses start with "bc1p." Learn more in Protocol Improvements →
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Timelock
A condition that delays when bitcoin can be spent or a transaction can confirm. Absolute timelocks name a block height or date: nLockTime makes one transaction invalid until then (the coins can still be spent by another transaction), while OP_CHECKLOCKTIMEVERIFY (BIP 65) inside a script locks the coins themselves. Relative timelocks count blocks or time from when the coins being spent were confirmed: nSequence (BIP 68) for an input, or OP_CHECKSEQUENCEVERIFY (BIP 112) inside a script. Lightning channels, vaults and inheritance setups rely on them. Learn more in Bitcoin Scripting →
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Tor
Free, open-source software and a network of volunteer-run relays that sends internet traffic through several relays, encrypted in layers, so no single relay knows both where the traffic came from and where it is going. The name comes from The Onion Routing project it grew out of; the Tor Project, a US non-profit, maintains it. Bitcoin node software, including Bitcoin Core, can connect to peers over Tor, which hides the node's IP address from those peers. Learn more in Bitcoin Privacy →
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Transaction
A data structure that transfers bitcoin from one or more inputs to one or more outputs. Every Bitcoin transaction except the coinbase (which creates new bitcoin) spends previous UTXOs as inputs, proves it may spend them (for example, with a signature), and creates new outputs. Transactions are broadcast to the network, wait in the mempool, and are confirmed when a miner includes them in a block. Learn more in Using Bitcoin →
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TXID
Transaction Identifier. A 64-character hexadecimal hash that identifies a Bitcoin transaction. It is made by double-SHA-256 hashing the transaction data without its witness (signature) part, so for a transaction whose inputs all use SegWit it does not change if signatures change; a separate "wtxid" covers the witness. You can use a TXID to look up a transaction on a block explorer.
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W
Wallet — Wrapped Bitcoin (WBTC) · 3 terms
Wallet
Software or hardware that manages your Bitcoin private keys and allows you to send, receive, and monitor your bitcoin. A wallet does not actually "store" bitcoin — the bitcoin exists on the blockchain. The wallet stores the keys that prove your right to spend it; in a custodial wallet, the provider holds the keys for you. Wallets come in many forms: mobile apps, desktop software, hardware devices, and paper wallets. Learn more in Storing Bitcoin Safely →
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Whitepaper
The foundational document titled "Bitcoin: A Peer-to-Peer Electronic Cash System," published by Satoshi Nakamoto on October 31, 2008. In nine pages, it describes Bitcoin's core design: a chain of blocks secured by Proof of Work, the peer-to-peer network, and the incentive for miners. Details such as the 21 million cap and the Script language are not in the paper. Learn more in Bitcoin History →
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Wrapped Bitcoin (WBTC)
A token on another blockchain that represents bitcoin, backed by BTC locked elsewhere. WBTC, for example, runs on Ethereum and other chains, and its issuer says each token is backed 1:1 by BTC held by a custodian. It is not native bitcoin: holders rely on whoever holds the locked BTC and on the token's smart contracts. YouBuyBitcoin only supports native bitcoin. Learn more in Advanced Topics →