Bitcoin Dictionary
A beginner-friendly glossary to help you master the language of Bitcoin and cryptocurrency.
Get a quick definition right here on this page, or select any of the highlighted terms for a complete, in-depth explanation, examples, and related concepts.
Address
A string of characters (like a bank account number) used to receive, send, and hold Bitcoin. It is derived from your public key.
Bitcoin (BTC)
The first decentralized digital currency, created in 2009 by Satoshi Nakamoto. It operates without a central bank or single administrator.
Block Reward
The newly created Bitcoin awarded to a miner for successfully solving the cryptographic puzzle and adding a new block to the blockchain.
Blockchain
A public, decentralized ledger that records all Bitcoin transactions. It's essentially a growing list of records (blocks) linked together using cryptography.
Cold Storage
Storing Bitcoin offline, typically on a hardware wallet or paper wallet, to protect it from hacking and online threats.
Read full explanation →Custodial Wallet
A wallet where a third party (like an exchange) holds your private keys and controls your funds. (Remember: Not your keys, not your coins).
Decentralization
The distribution of power and control away from a central authority. In Bitcoin, no single entity controls the network.
Difficulty Adjustment
A mechanism that automatically adjusts how hard it is to mine a new block, ensuring that blocks are found roughly every 10 minutes regardless of how much computing power is on the network.
Fiat Currency
Government-issued money (like the US Dollar or Euro) that is not backed by a physical commodity like gold, but by the government that issued it.
Halving
An event that occurs roughly every four years where the block reward given to Bitcoin miners is cut in half, reducing the rate at which new Bitcoin is created.
Hash Rate
The total combined computational power being used to mine and process transactions on the Bitcoin network.
Read full explanation →Hot Wallet
A Bitcoin wallet that is connected to the internet, making it convenient for frequent transactions but more vulnerable to hacking than cold storage.
Lightning Network
A 'Layer 2' solution built on top of Bitcoin that enables instant, nearly free transactions without having to record every single one on the main blockchain.
Read full explanation →Mempool
The temporary waiting area on each Bitcoin node where unconfirmed transactions wait before miners include them in a block. A congested mempool leads to higher fees.
Read full explanation →Mining
The process by which specialized computers compete to solve complex math problems to process transactions and secure the network, earning new Bitcoin as a reward.
Node
A computer connected to the Bitcoin network that keeps a full copy of the blockchain and helps verify and relay transactions.
Read full explanation →Non-Custodial Wallet
A wallet where you alone hold the private keys and have full control over your funds. Also called a self-custody wallet.
Private Key
A secret, alphanumeric password that allows you to spend your Bitcoin. It must never be shared with anyone.
Read full explanation →Proof of Work
The consensus system that secures Bitcoin by requiring miners to expend real computational energy to add new blocks to the chain.
Read full explanation →Public Key
A cryptographic code derived from your private key that allows you to receive Bitcoin. It is safe to share with others.
Satoshi (Sat)
The smallest unit of a Bitcoin. There are 100 million satoshis in one Bitcoin.
Read full explanation →Satoshi Nakamoto
The pseudonymous creator (or creators) of Bitcoin who published the white paper in 2008 and released the software in 2009 before disappearing.
Seed Phrase
A list of 12 to 24 words that stores all the information needed to recover a Bitcoin wallet. If you lose your wallet, this phrase restores your funds.
Read full explanation →UTXO
An unspent chunk of Bitcoin locked to an address. Bitcoin works like digital cash: you spend whole outputs and receive change back as new outputs.
Read full explanation →Continue Learning
- New to Bitcoin? Start with What Is Bitcoin? The Complete Beginner Story.
- Learn how Bitcoin transactions work with our interactive visualizer.
- Explore the Bitcoin Timeline to see how these terms shaped history.
- Try the Satoshi to Bitcoin Converter to see these units in action.
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