Bitcoin Terms Dictionary
A comprehensive glossary of Bitcoin, blockchain, and cryptocurrency terminology to help you navigate the complex world of digital assets. Browse alphabetically or search for specific terms.
5
551% Attack
A potential attack on a blockchain network where a single entity controls more than 50% of the network's mining power, allowing them to disrupt the network.
A
AAddress
A unique identifier that represents a destination for a bitcoin payment, similar to an email address.
Airdrop
A distribution of cryptocurrency tokens to numerous wallet addresses, usually for free, as a marketing strategy or community reward.
Altcoin
Any cryptocurrency that is an alternative to Bitcoin.
ASIC
Application-Specific Integrated Circuit. A specialized hardware device designed solely for mining bitcoin.
ATH
All-Time High. The highest price of a cryptocurrency in its history.
B
BBech32
A Bitcoin address format that uses a more efficient segwit address type, starting with 'bc1'.
BIP
Bitcoin Improvement Proposal. A design document providing information to the Bitcoin community.
Bitcoin
The first and largest cryptocurrency by market capitalization, created in 2009 by Satoshi Nakamoto.
Bitcoin Core
The reference implementation of the Bitcoin protocol, maintaining the core code that runs the Bitcoin network.
Bitcoin Dominance
The ratio of Bitcoin's market capitalization to the total market capitalization of all cryptocurrencies.
Bitcoin Improvement Proposal
Detailed document for introducing features or information to Bitcoin, often referenced as BIP followed by a number.
Block
A collection of transactions bundled together and added to the blockchain.
Block Height
The number of blocks connected in the blockchain before a given block.
Block Reward
The bitcoin given to a miner who successfully adds a block to the blockchain.
Blockchain
The public ledger that records all Bitcoin transactions in a chronological chain of blocks.
Byzantine Fault Tolerance
The ability of a distributed system to continue operating even if some nodes fail or act maliciously.
C
CCoinbase Transaction
The first transaction in a block, which creates new bitcoins and gives them to the miner who solved the block.
Cold Storage
Keeping private keys offline to enhance security against hacking.
Confirmation
The process of a transaction being verified by the network and included in a block.
Consensus
Agreement among network participants on the state of the blockchain.
Cryptocurrency
A digital or virtual currency that uses cryptography for security and operates on a blockchain.
Cryptography
The science of secure communications used in blockchain to enable secure transactions and protect user identities.
Custodial Wallet
A cryptocurrency wallet where a third party holds your private keys, giving you less control but often more convenience.
D
DDAO
Decentralized Autonomous Organization. An organization represented by rules encoded in a smart contract.
DApp
Decentralized Application. An application that runs on a decentralized network.
Decentralized Exchange
A cryptocurrency exchange that operates without a central authority, allowing peer-to-peer trading.
DeFi
Decentralized Finance. Financial services built on blockchain technologies.
Difficulty
A measure of how hard it is to mine a new block in the Bitcoin blockchain.
Digital Signature
Cryptographic mechanism used to verify that a message or transaction was created by a specific private key holder.
Dust Transaction
A transaction with an amount so small that it costs more in fees than the value being transferred.
E
EEncryption
The process of converting information into a code to prevent unauthorized access, essential for blockchain security.
ETF
Exchange-Traded Fund. An investment fund traded on stock exchanges, now available for Bitcoin.
Exchange
A platform where users can buy, sell, and trade cryptocurrencies.
F
FFaucet
A website or application that gives away small amounts of cryptocurrency for free, often used for testing or to help new users.
Fiat
Government-issued currency, such as USD, EUR, or JPY.
FOMO
Fear Of Missing Out. The feeling of anxiety that you might miss a profitable investment opportunity.
Fork
A split in the blockchain, creating two separate chains with a shared history.
Fungible
A property of an asset where all units are identical and interchangeable, like bitcoins or dollar bills.
G
GGas
The fee required to perform a transaction or execute a contract on some blockchain networks like Ethereum.
GBTC
Grayscale Bitcoin Trust. An investment vehicle that enables investors to gain exposure to Bitcoin.
Genesis Block
The first block of a blockchain, hardcoded into the software.
H
HHalving
An event where the block reward for mining new Bitcoin blocks is cut in half.
Hard Cap
The maximum amount of funds a cryptocurrency project will accept in its initial coin offering or token sale.
Hardware Security Module
Specialized hardware device used to safeguard and manage digital keys and perform encryption functions.
Hardware Wallet
A physical device that stores private keys offline for enhanced security.
Hash
The output of a cryptographic hash function, used to verify data integrity.
Hashrate
The computational power used by the network to process transactions, measured in hashes per second.
HODL
A misspelling of 'hold' that became a backronym for 'Hold On for Dear Life,' advising against panic selling.
Hot Wallet
A cryptocurrency wallet that is connected to the internet, allowing for quick transactions but with increased security risks.
Hyperbitcoinization
A theoretical scenario where Bitcoin becomes the dominant global currency.
I
IICO
Initial Coin Offering. A fundraising method for new cryptocurrency projects.
Immutability
The property of blockchain data that makes it unchangeable once recorded, ensuring transaction permanence.
Initial Coin Offering
A fundraising method where new cryptocurrency projects sell their tokens to early investors.
K
KKey Pair
A set of private and public cryptographic keys used to control access to Bitcoin.
KYC
Know Your Customer. A process used to verify a customer's identity.
L
LLayer 2
Secondary protocols built on top of the main blockchain to improve scalability, speed, and reduce fees.
Lightning Network
A layer-2 scaling solution for Bitcoin that enables faster and cheaper transactions.
Liquidity
The ease with which an asset can be bought or sold without affecting its price.
M
MMainnet
The main blockchain network where actual transactions take place, as opposed to a testnet.
Market Cap
The total value of a cryptocurrency, calculated by multiplying the price by the circulating supply.
Mempool
A pool of unconfirmed transactions waiting to be added to the blockchain.
Merkle Tree
A data structure used in blockchain to efficiently and securely verify large datasets.
Mining
The process of validating transactions and adding them to the blockchain to earn rewards.
Mining Pool
A group of cryptocurrency miners who combine their computational resources to increase their chances of finding a block.
Multi-signature
A security feature that requires multiple private keys to authorize a Bitcoin transaction.
Multisig
Multi-signature. A technology that requires multiple signatures to authorize a Bitcoin transaction.
N
NNode
A computer that connects to the Bitcoin network and helps maintain the blockchain.
Non-Custodial Wallet
A cryptocurrency wallet where you maintain control of your private keys, giving you full ownership of your funds.
Nonce
A number used in mining to find a hash that meets the difficulty target.
O
OOpen-Source
Software whose source code is public and can be modified and redistributed freely.
Oracle
A service that provides external data to a blockchain or smart contract.
Orphan Block
A valid block that is not part of the main blockchain because a competing block was added to the chain first.
Over-the-Counter
Trading that happens directly between two parties without the supervision of an exchange, often abbreviated as OTC.
P
PPaper Wallet
A physical document containing Bitcoin private keys and addresses.
Peer-to-Peer (P2P)
A decentralized network where participants interact directly without intermediaries.
Private Key
A secret number that allows Bitcoin to be spent, similar to a password.
Proof of Stake
A consensus algorithm where validators are chosen to create new blocks based on the number of coins they hold and are willing to 'stake'.
Proof of Work
The consensus algorithm used by Bitcoin to validate transactions and add blocks to the blockchain.
Public Key
A cryptographic key derived from a private key, used to create a Bitcoin address.
Q
QQR Code
A two-dimensional barcode that represents a Bitcoin address, making it easier to share and scan.
R
RRBF
Replace By Fee. A feature that allows unconfirmed transactions to be replaced with a new transaction that includes a higher fee.
REKT
Internet slang for 'wrecked,' describing a significant financial loss.
S
SSatoshi
The smallest unit of Bitcoin, equal to 0.00000001 BTC, named after Bitcoin's creator.
Satoshi Nakamoto
The pseudonymous creator of Bitcoin, whose real identity remains unknown.
Seed Phrase
A series of words that can be used to recover cryptocurrency wallet access, also known as a recovery phrase or mnemonic.
Segregated Witness
Also known as SegWit, a Bitcoin upgrade that separates transaction signatures to increase capacity.
Sharding
A scaling technique that partitions a blockchain into smaller pieces (shards) to improve transaction throughput.
Sidechain
A separate blockchain that runs in parallel to the main blockchain, allowing for asset transfers between the two chains.
Smart Contract
Self-executing contracts with the terms directly written into code.
Soft Fork
A backward-compatible change to the blockchain protocol.
Stablecoin
A type of cryptocurrency designed to minimize price volatility, often pegged to a stable asset like the US dollar.
T
TTestnet
A duplicate of the Bitcoin network used for testing purposes without using real funds.
Ticker
The symbol used to uniquely identify a cryptocurrency on trading platforms (e.g., BTC for Bitcoin).
Timelock
A feature that restricts the spending of Bitcoin until a specified future time or block height.
Tokenomics
The economic model and attributes of a cryptocurrency token, including supply, distribution, and utility.
TPS
Transactions Per Second. A measure of blockchain performance indicating how many transactions a network can process each second.
Transaction Fee
A fee paid to miners to prioritize a transaction's inclusion in a block.
U
UUTXO
Unspent Transaction Output. The outputs of previous transactions that can be used as inputs in new transactions.
V
VValidator
In proof-of-stake systems, a participant who verifies transactions and creates new blocks, similar to miners in proof-of-work.
Volatility
A measure of how much the price of an asset fluctuates over time.
W
WWallet
Software or hardware that stores private keys and allows users to send and receive bitcoin.
Whale
An individual or entity that holds a significant amount of a cryptocurrency.
Whitepaper
A document that outlines the problem, solution, and technical details of a cryptocurrency project.
Z
ZZero-Knowledge Proof
A cryptographic method that allows one party to prove to another that they know a value, without revealing the actual value.