# 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!