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The Bitcoin Glossary

90 terms, defined in plain English. The 45 that matter most get full deep-dive pages — highlighted below.
# A B C D E F H I K L M N O P R S T U V W

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51% Attack
Controlling a majority of mining power to censor or reorder recent transactions — prohibitively expensive at current hashrate, and unable to steal keys or change the rules.

A

A string of letters and numbers — like an account number you can generate infinitely — where bitcoin can be received. Modern addresses start with bc1.
Air Gap
Signing transactions on a device that never connects to the internet (microSD, QR, NFC) — the Coldcard workflow.
Altcoin
Any cryptocurrency other than bitcoin. This site does not cover them, deliberately.
Application-specific integrated circuit — purpose-built mining hardware. See Miner (ASIC).

B

Batching
Combining many payments into one transaction to save fees — how exchanges process withdrawals.
Bear Market
A prolonged price decline. Bitcoin has had several exceeding 75% — and recovered from all of them so far.
BIP
Bitcoin Improvement Proposal — the public process for proposing protocol changes (BIP-39 seeds, BIP-85, etc).
A digital money and payment network with no company, government, or bank in charge — secured by cryptography and a fixed supply of 21 million coins.
The reference software: full node + wallet. See our full review.
A public company whose core business is holding bitcoin on its balance sheet — pioneered by Strategy (MSTR) in 2020.
Bitcoin's share of the total crypto market cap — around 56% in mid-2026. Rising dominance means money hiding in bitcoin; falling means risk appetite rotating to altcoins.
A trust an official can't see into or direct — the ethics device the CLARITY Act would require for federal officials' crypto holdings.
A batch of transactions bundled together, verified, and added to the blockchain roughly every ten minutes.
Block Height
A block’s position in the chain — the count of blocks since 2009. Used like a timestamp.
The running count of blocks since the genesis block — bitcoin's native clock, and how halvings are actually scheduled.
The new bitcoin a miner earns for adding a block — currently 3.125 BTC — plus all the fees from transactions inside it.
A public ledger of every bitcoin transaction ever made, copied across thousands of computers and secured so that history cannot be rewritten.
Bull Market
A prolonged price rise. Historically has followed halvings — no guarantees.

C

Change
The “coins back” from a transaction — spending a 1 BTC UTXO to pay 0.3 returns ~0.7 to a change address you control.
Coin Control
Choosing exactly which UTXOs a transaction spends — a privacy and fee tool in wallets like Sparrow.
Coinbase Transaction
The special first transaction in a block that mints the reward — not the exchange of the same name.
The stalled U.S. bill that would settle which digital assets are commodities vs securities — by statute, not by agency rule.
Keeping private keys on a device that never touches the internet — the standard for storing bitcoin savings.
Confirmation
Each block mined after your transaction. Six confirmations (~1 hour) is the traditional finality standard for large amounts.
CPFP
Child-pays-for-parent: unsticking a low-fee transaction by spending its output with a high-fee child.
Custodial
Any service that holds keys for you — exchanges, ETFs, most apps. Convenient, and someone else’s bitcoin until you withdraw.

D

Dollar-cost averaging: buying a fixed dollar amount on a fixed schedule, regardless of price — the strategy that removes timing (and emotion) from stacking.
Bitcoin’s self-tuning thermostat: every 2,016 blocks (~2 weeks) the network recalibrates how hard mining is, keeping blocks ~10 minutes apart no matter how much mining power joins or leaves.
Dust
UTXOs too small to be worth the fee to spend them — stranded sats.

E

ETF
A fund whose shares track bitcoin’s price inside a brokerage account. Exposure, not withdrawable coins — see our rankings.
The daily net money moving into or out of the spot bitcoin ETFs — creations minus redemptions, the cleanest public read on institutional demand.
A business that trades fiat for bitcoin. Buy, then withdraw — see our rankings.

F

A 0–100 dial of crowd sentiment — volatility, momentum, and social chatter compressed into one number. 0 is panic, 100 is euphoria.
Fiat
Government-issued money backed by decree rather than a commodity — dollars, euros, yen.
Fork
A change to the protocol rules. Soft forks tighten rules (backward-compatible); hard forks split the network.
Software that verifies every rule itself. See Node.

H

The scheduled event every 210,000 blocks (~4 years) that cuts the new-bitcoin issuance in half — the heartbeat of bitcoin’s fixed supply.
A small dedicated device that stores private keys offline and signs transactions internally — keys never touch your computer or phone.
A miner's expected daily revenue per unit of hashrate, in $/PH/s/day — the single number that summarizes mining profitability.
The total computing power securing the Bitcoin network, measured in hashes (guesses) per second — currently around a zettahash: 10²¹ guesses every second.
Bitcoin slang for holding through volatility instead of trading — born from a typo of "hold" in a 2013 forum post, now a philosophy.
A wallet whose private keys live on an internet-connected device — convenient like the cash in your pocket, and exposed like it too.

I

An accounting write-down recognizing an asset is worth less than its recorded value — how bitcoin's price swings hit corporate earnings without a single coin being sold.
Inscription
Data embedded in transactions (Ordinals) — collectibles on bitcoin, and a fee-market wildcard.

K

KYC
Know Your Customer — the identity checks regulated exchanges must perform. Ties your identity to your addresses.

L

Bitcoin’s payments layer: a network of payment channels on top of the blockchain enabling instant, near-free transactions — the difference between settling and spending.
Liquidity
How much can be traded without moving the price. Deep liquidity = tight spreads — why IBIT and Binance win their categories.
Coins unmoved for 155+ days — the market's strong hands. When this cohort sells at a loss in size, analysts call it capitulation; historically it clusters near bottoms.
Bitcoin whose private keys are gone for good — an estimated 2.3–3.7 million BTC, permanently out of the circulating supply. Most of it lost before 2013.

M

The waiting room for transactions: every broadcast payment sits in the mempool until a miner includes it in a block. Fuller mempool, higher fees.
A purpose-built computer that does exactly one thing — guess proof-of-work hashes — billions of times per second. ASIC: application-specific integrated circuit.
The competition that secures Bitcoin: specialized computers race to solve a cryptographic puzzle, and the winner adds the next block and earns new bitcoin.
Mining Pool
Miners combining hashrate and splitting rewards proportionally — steady income instead of lottery variance.
The share of an asset's value that comes from being used as money rather than from utility — gold's is most of its price; bitcoin's is all of it.
A wallet requiring multiple keys to spend — like a safe deposit box needing two of three keys. Removes the single point of failure that dooms most self-custody.

N

A computer running Bitcoin software that independently verifies every block and transaction against the rules — your personal auditor of the money supply.
Nonce
The number miners iterate to change a block’s hash — the knob turned quintillions of times per second.
Not Your Keys
“Not your keys, not your coins” — custodial balances are IOUs until withdrawn. The lesson of every exchange collapse.

O

On-Chain
Settled on the blockchain itself, as opposed to Lightning or a custodian’s internal ledger.

P

A private key printed on paper — obsolete cold storage we recommend against. See why on our wallets page.
Passphrase
An extra word you memorize on top of the seed phrase (the “25th word”) — a second factor a thief cannot find on your backup plate.
Lock bitcoin once on-chain, pay instantly off-chain unlimited times — the building block of Lightning.
An exchange where event outcomes trade as $0–$1 shares, so prices read as crowd-sourced probabilities — Polymarket and Kalshi are the largest.
A share class paying set dividends, senior to common stock — how Strategy funds bitcoin buys (STRF, STRC, STRK, STRD).
Loans from funds, not banks — issued by project-level entities that keep debt off sponsors' books. The funding model behind AI data centers and miner expansions.
The secret number that controls bitcoin. Whoever knows it can spend the coins — full stop. Wallets exist to generate, guard, and use it without exposing it.
Proof of Reserves
An exchange cryptographically proving it holds client balances — Kraken, Binance, and OKX publish them; demand it from any custodian.
Bitcoin’s security engine: adding a block requires provably expending real energy, making history expensive to write and prohibitive to rewrite.
PSBT
Partially signed bitcoin transaction — the file format that lets an offline device sign what an online computer prepared.
Public Key
Derived from the private key; proves signatures without revealing the secret. Addresses are derived from it.

R

RBF
Replace-by-fee: bumping a stuck transaction’s fee so miners pick it up.

S

The smallest bitcoin unit (see Sats) — and the pseudonym of bitcoin’s creator, Satoshi Nakamoto, unheard from since 2011.
An asset investors buy during crisis because it holds value when everything else falls — gold, Treasuries, and (debatably) bitcoin.
Satoshis — the smallest unit of bitcoin. One bitcoin is 100 million sats, so a whole coin is optional; everyone stacks sats.
12 or 24 ordinary words that back up every key in your wallet. Anyone with the words has the bitcoin; anyone without them, including you, cannot recover it.
Holding your own private keys instead of trusting an exchange or custodian — the property that makes bitcoin different from every other financial asset.
SHA-256
The cryptographic hash function at bitcoin’s core — any input to a unique 256-bit fingerprint, one-way only.
Shamir Backup
Splitting a seed into N shares where any K recover it — supported by Trezor. No single piece of paper can lose or leak your wallet.
A backwards-compatible tightening of Bitcoin's rules — old nodes keep following the chain. How P2SH, SegWit, and Taproot all shipped.
Stacking Sats
Accumulating bitcoin steadily in small amounts — DCA culture’s term of art.

T

Taproot
The 2021 upgrade improving privacy and script flexibility — bc1p addresses.
Timelock
A condition making coins unspendable until a set time or block — the mechanism behind inheritance schemes and Green’s 2FA recovery.
Transaction Fee
What you pay miners for block space, priced in sats/vB — set by demand (see Mempool), not by amount sent. $10 or $10M can cost the same to move.

U

Unspent transaction output — the actual form bitcoin takes on-chain. Your balance is not a number; it is a collection of discrete coins of various sizes.

V

Volatility
The size of price swings. Bitcoin’s is famous — the cost of admission for its returns, and the reason position sizing matters.

W

Software or hardware that manages your keys and talks to the network. Wallets hold keys, not coins — the bitcoin lives on the blockchain.
An entity holding enough bitcoin to move markets — commonly 1,000+ BTC, tracked on-chain in real time.
Watch-Only
A wallet that sees balances but holds no keys — monitor cold storage from your phone safely (BlueWallet, Sparrow).
Whitepaper
“Bitcoin: A Peer-to-Peer Electronic Cash System” — Satoshi’s nine pages from October 2008 that started it all.
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