> For the complete documentation index, see [llms.txt](https://academy.hongbaob.tc/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://academy.hongbaob.tc/resources/glossary.md). # Glossary ## Essential Bitcoin Terms Explained ### A **Address** * A string of letters and numbers where you receive Bitcoin * Like an email address for money * Example: bc1qxy2kgdygjrsqtzq2n0yrf2493p83kkfjhx0wlh **Altcoin** * Any cryptocurrency that isn't Bitcoin * "Alternative coin" * Examples: Ethereum, Litecoin **ASIC** * Application-Specific Integrated Circuit * Specialized hardware for Bitcoin mining * Much more efficient than regular computers ### B **Bitcoin (BTC)** * The first and largest cryptocurrency * Digital money with fixed supply * Created by Satoshi Nakamoto in 2009 **Blockchain** * A chain of blocks containing transactions * Public ledger of all Bitcoin transactions * Immutable and transparent **Block** * A group of transactions bundled together * Added to blockchain every \~10 minutes * Contains reference to previous block **Block Height** * The number of blocks in the blockchain * Increases by 1 with each new block * Shows how "deep" a transaction is **Block Reward** * New Bitcoin given to miners * Currently 6.25 BTC per block * Halves every 4 years ### C **Cold Storage** * Keeping Bitcoin offline for security * Hardware wallets, paper wallets * Not connected to internet **Confirmation** * When transaction is included in a block * More confirmations = more secure * 6 confirmations considered irreversible **Consensus** * Agreement on blockchain state * No central authority needed * Achieved through mining **Cryptocurrency** * Digital currency using cryptography * Bitcoin was the first * Thousands now exist **Custodial** * Someone else controls your private keys * Like a bank holding your money * "Not your keys, not your coins" ### D **DCA (Dollar Cost Averaging)** * Buying fixed dollar amount regularly * Reduces impact of volatility * Popular investment strategy **Decentralized** * No single point of control * Distributed across many computers * Core principle of Bitcoin **Double Spend** * Attempting to spend same Bitcoin twice * Prevented by blockchain * The problem Bitcoin solved ### E **Exchange** * Platform to buy/sell Bitcoin * Centralized vs decentralized * Examples: Coinbase, Kraken ### F **Fiat Currency** * Government-issued money * USD, EUR, CNY, etc. * Not backed by physical commodity **Fork** * Split in blockchain rules * Soft fork: backwards compatible * Hard fork: creates new chain **FUD** * Fear, Uncertainty, and Doubt * Negative news to affect price * Often misleading ### G **Genesis Block** * First block in Bitcoin blockchain * Created January 3, 2009 * Contains message about bank bailouts ### H **Halving** * Block reward cuts in half * Happens every 210,000 blocks (\~4 years) * Controls Bitcoin supply **Hardware Wallet** * Physical device storing private keys * Most secure storage method * Examples: Ledger, Trezor **Hash** * Unique fingerprint of data * One-way mathematical function * Used throughout Bitcoin **Hash Rate** * Total mining power on network * Measured in hashes per second * Higher = more secure **HODL** * Hold On for Dear Life * Long-term investment strategy * Originally a typo for "hold" **Hot Wallet** * Wallet connected to internet * Convenient but less secure * For daily spending ### K **KYC (Know Your Customer)** * Identity verification requirements * Used by exchanges * Privacy consideration ### L **Lightning Network** * Layer 2 scaling solution * Instant, cheap transactions * Built on top of Bitcoin **Liquidity** * How easily asset can be bought/sold * Bitcoin has high liquidity * Important for large trades ### M **Market Cap** * Total value of all Bitcoin * Price × circulating supply * Largest crypto by market cap **Mempool** * Waiting area for transactions * Before confirmation in block * Size indicates network congestion **Mining** * Process of creating new blocks * Secures the network * Rewarded with new Bitcoin **Multisig** * Multiple signatures required * Enhanced security * Good for shared funds ### N **Node** * Computer running Bitcoin software * Validates transactions and blocks * Anyone can run one **Non-custodial** * You control private keys * True ownership * Recommended approach ### O **Orphan Block** * Valid block not in main chain * Happens during temporary forks * Resolves automatically ### P **Paper Wallet** * Private keys printed on paper * Form of cold storage * Handle with care **Peer-to-Peer (P2P)** * Direct transfer between users * No intermediary needed * Core Bitcoin principle **Private Key** * Secret number controlling Bitcoin * Like password to your funds * Never share with anyone **Proof of Work** * Mining consensus mechanism * Requires computational work * Secures the network **Public Key** * Derived from private key * Used to verify signatures * Can be shared safely ### Q **QR Code** * Quick Response code * Square barcode for addresses * Easy scanning with camera ### R **Replace-by-Fee (RBF)** * Increase fee after sending * Speeds up transactions * Not all wallets support ### S **Satoshi (sat)** * Smallest Bitcoin unit * 0.00000001 BTC * 100 million sats = 1 BTC **Satoshi Nakamoto** * Bitcoin's pseudonymous creator * Identity unknown * Disappeared in 2011 **Seed Phrase** * 12-24 words to restore wallet * Master backup * Keep secret and safe **SegWit** * Segregated Witness * Upgrade reducing fees * Addresses start with 3 or bc1 **SHA-256** * Cryptographic hash function * Used in Bitcoin mining * Secure Hash Algorithm **Signature** * Proof you own private key * Authorizes transactions * Created mathematically **Smart Contract** * Self-executing code * Limited in Bitcoin * More common in other chains ### T **Transaction** * Transfer of Bitcoin * Recorded on blockchain * Requires fee **Transaction ID (TXID)** * Unique identifier * Can track on explorer * Proof of payment ### U **Unconfirmed** * Transaction not yet in block * Still in mempool * Usually confirms soon **UTXO** * Unspent Transaction Output * How Bitcoin tracks balances * Like cash bills ### V **Volatility** * Price fluctuation * Bitcoin known for this * Decreasing over time ### W **Wallet** * Software/hardware managing keys * Doesn't actually "store" Bitcoin * Interface to blockchain **Whale** * Someone holding lots of Bitcoin * Can influence markets * Often early adopters **Whitepaper** * Original Bitcoin document * By Satoshi Nakamoto * Founded everything ### Common Phrases **"Not your keys, not your coins"** * Importance of self-custody * Control your private keys * Don't trust exchanges **"Don't trust, verify"** * Bitcoin philosophy * Check everything yourself * Run your own node **"Number go up"** * Bitcoin price appreciation * Long-term trend * Meme in community **"Stack sats"** * Accumulate satoshis * Save in Bitcoin * Building wealth **"Diamond hands"** * Holding through volatility * Not panic selling * Long-term conviction **"To the moon"** * Price going very high * Optimistic prediction * Community rallying cry ### Acronyms * **ATH**: All-Time High * **BTD**: Buy The Dip * **DYOR**: Do Your Own Research * **FOMO**: Fear Of Missing Out * **FUD**: Fear, Uncertainty, Doubt * **HODL**: Hold On for Dear Life * **NGMI**: Not Gonna Make It * **WAGMI**: We're All Gonna Make It *** > 📚 **Learning Tip**: Don't try to memorize everything at once. Refer back to this glossary as you encounter new terms in your Bitcoin journey! --- # Agent Instructions This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com. ## Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter: ``` GET https://academy.hongbaob.tc/resources/glossary.md?ask=&goal= ``` `ask` is the immediate question: it should be specific, self-contained, and written in natural language. `goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. 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