Bitcoin Glossary

Bitcoin has its own vocabulary, but most of the ideas are simpler than the names make them sound. Here are the basics, from addresses to the paper that started it all.

• Address: A short string you share so someone can send bitcoin to you. It works a bit like a payment destination, not like your name tag. (Bitcoin.org Vocabulary)
• Block: A bundle of Bitcoin transactions linked to the block before it. The network checks the bundle before adding it to the shared record. (Bitcoin Developer Glossary)
• Block reward: The amount a miner may claim for a block: newly issued bitcoin, called the subsidy, plus the transaction fees in that block. (Bitcoin Developer Glossary) Read more →
• Blockchain: Bitcoin’s public record of transactions, arranged in linked blocks. Each block points back to the one before it, making old entries difficult to change. (Bitcoin.org Vocabulary) Read more →
• Coinbase transaction: The first transaction in a block, created by its miner. It includes the field miners use to claim the block reward. (Bitcoin Developer Glossary)
• Cold wallet: A wallet kept offline, away from an internet-connected device. Bitcoin.org calls offline storage “cold storage.” (Bitcoin.org: Securing Your Wallet)
• Confirmation: A transaction gets a confirmation when it is included in a block. Each later block on top adds another confirmation. (Bitcoin.org Vocabulary)
• Difficulty: A measure of how hard it is to find a block compared with the easiest possible target. The network adjusts its target so blocks do not arrive too quickly or too slowly over time. (Bitcoin Developer Glossary)
• Double-spending: Trying to use the same bitcoin in two different payments. Bitcoin’s transaction history and mining process help the network settle which valid payment is recorded. (Bitcoin.org Vocabulary)
• Fee: The amount left over when a transaction’s outputs are subtracted from its inputs. A miner gets the fee when including that transaction in a block. (Bitcoin Developer Glossary)
• Fork: A temporary split where competing blocks share the same height, often because miners found blocks at nearly the same time. The network later settles on a chain. (Bitcoin Developer Glossary)
• Full node: A computer that downloads and checks Bitcoin blocks and transactions against the network’s rules. It verifies the record itself instead of simply taking another computer’s word for it. (Bitcoin Developer Guide: P2P Network)
• Halving: A scheduled cut in half to the new bitcoin subsidy miners can claim for a block. Bitcoin.org describes it as occurring every 210,000 blocks. (Bitcoin.org Vocabulary) Read more →
• Hardware wallet: A kind of wallet that Bitcoin.org lists as its own category, separate from desktop and mobile wallets. (Bitcoin.org: Choose Your Wallet)
• Hash: In Bitcoin mining, software repeatedly hashes a block header and looks for a result below the target. (Bitcoin Developer Guide: Mining)
• Hash rate: The speed at which a computer or network performs hash calculations. Bitcoin.org uses it as a measure of the network’s processing power. (Bitcoin.org Vocabulary)
• Lightning Network: A payment system built on top of Bitcoin for making payments through channels between participants. Its payments do not each need their own individual entry in a Bitcoin block. (Bitcoin.org Vocabulary)
• Mempool: A node’s temporary waiting area for valid, unconfirmed transactions that may be included in a future block. Different nodes can hold different waiting lists. (Bitcoin Developer Guide: P2P Network)
• Mining: The process of creating valid Bitcoin blocks by doing proof-of-work calculations. Miners compete to find a block that meets the network’s target. (Bitcoin Developer Glossary)
• Multisig: A spending setup requiring signatures from more than one key. BIP 11 describes M-of-N-signature transactions. (BIP 11: M-of-N Standard Transactions)
• Node: A computer connected to the Bitcoin network that can exchange blocks and transactions with other computers. A full node also checks them against Bitcoin’s rules. (Bitcoin.org Vocabulary)
• Peer-to-peer: A way for computers or people to communicate directly as participants in a network, without requiring a bank as the middleman. (Bitcoin.org Vocabulary)
• Private key: A secret number that lets a wallet create signatures authorizing bitcoin to be spent. Anyone who gets the key may be able to spend the bitcoin it controls. (Bitcoin.org Vocabulary)
• Proof of work: Evidence that computing work was done: a block header hash must fall below a target number. Miners try many hashes to find one that qualifies. (Bitcoin Developer Glossary)
• Public key: The shareable part of a key pair, used to check signatures made with its matching private key. (Bitcoin Developer Glossary)
• Recovery phrase: A series of words that wallet software can use to recreate its keys. BIP 39 specifies a method for turning computer-generated randomness into such a mnemonic phrase. (BIP 39: Mnemonic Code)
• Satoshi (unit): The smallest bitcoin unit used in Bitcoin’s ledger. One bitcoin equals 100,000,000 satoshis. (Bitcoin.org Vocabulary)
• Satoshi Nakamoto (name): The name printed beneath the title of the Bitcoin white paper. The document establishes that this name was used; it does not establish a real-world identity. (Bitcoin White Paper)
• SegWit: A Bitcoin change that adds witness data to transaction serialization and commits to that data in blocks. BIP 141 defines the witness structure. (BIP 141: Segregated Witness)
• Stablecoin: In a 2025 speech, Federal Reserve Governor Christopher Waller defined stablecoins as digital assets designed to maintain a stable value relative to a national currency and backed at least one-to-one by safe, liquid assets. That design is not a guarantee that every such asset will stay stable. (Federal Reserve: Speech on Stablecoins) Read more →
• Taproot: A Bitcoin output type that can be spent using a public key, with optional script conditions. Its design can keep unused spending conditions out of the public transaction. (BIP 341: Taproot)
• UTXO: An “Unspent Transaction Output”: bitcoin from an earlier transaction that has not yet been spent. A later transaction can use it as an input. (Bitcoin Developer Glossary)
• Wallet: Software or a dedicated device that manages the keys used to receive and spend bitcoin and can show the balance it controls. It does not hold coins like a leather billfold holds cash. (Bitcoin Developer Glossary)
• White paper: The document titled “Bitcoin: A Peer-to-Peer Electronic Cash System,” signed with the name Satoshi Nakamoto. It outlines Bitcoin as a peer-to-peer electronic payment system. (Bitcoin White Paper)