Glossary
The words, defined.
Bitcoin uses a small set of terms with precise meanings. These are the ones the field guide relies on, in alphabetical order.
A
- Address
- A string derived from a public key that others use to send you coins. Addresses can be shared. The private key must never be.
B
- Block
- A batch of transfers, plus a link to the previous block, added to the ledger in one step.
- Block reward
- The new coins a miner may claim in a block, as set by the protocol. It halves on a fixed schedule.
C
- Confirmation
- A block added on top of the block that holds a transfer. More confirmations make reversal more costly.
- Custody
- Who controls the private keys. Self-custody means you hold them yourself. Third-party custody means someone else holds them for you.
D
- Double spend
- An attempt to spend the same coins twice. The ledger rules and confirmations exist to prevent it.
F
- Fee rate
- The fee a sender offers for each unit of transfer size, measured in satoshis per virtual byte.
H
- Halving
- A scheduled cut in the block reward. It takes place every 210,000 blocks.
- Hash
- A fixed-length fingerprint of data. Change the data slightly and the fingerprint changes completely.
M
- Mempool
- The waiting area where valid transfers sit until a miner includes them in a block. Each node keeps its own.
- Miner
- A participant who builds blocks through proof of work, and who is rewarded with new coins and fees.
N
- Node
- Software that stores the ledger and checks every block and transfer against the rules.
P
- Private key
- A secret number that authorizes spending. Anyone who holds it can sign for the coins it controls.
- Proof of work
- A puzzle that is expensive to solve and cheap to check. It makes rewriting history costly.
- Public key
- A value derived from a private key that lets anyone verify a signature without learning the secret.
R
- Recovery phrase
- A list of words that can regenerate a wallet's keys. Anyone who sees it can take the coins.
S
- Satoshi
- The smallest unit of bitcoin. One bitcoin equals 100,000,000 satoshis.
- Self-custody
- Holding your own private keys, so that no third party can freeze or move your coins.
W
- Wallet
- Software that manages keys and builds signed transfers. A wallet does not hold coins. The ledger does.