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Plain-English definitions, a link to the deeper explanation, and the technical source behind each term.
25 terms
- Address
An encoded payment destination that tells a wallet how to construct an output. An address is not a universal account identifier or necessarily a raw public key.
- Block
A group of transactions with a header that commits to its contents and preceding block. A valid block must satisfy proof-of-work and consensus rules.
- Coinbase transaction
The first transaction in a block. It can claim the permitted new subsidy and transaction fees. This protocol term is unrelated to the exchange company’s name.
- Confirmation
Inclusion in the active chain gives a transaction one confirmation; subsequent blocks increase its confirmation count. Reorganizations can change that count.
- Custody
The arrangement for controlling the information needed to spend funds. A custodian generally holds signing keys on a customer’s behalf; self-custody puts that responsibility on the user.
- Fee rate
A transaction fee divided by its size measure, commonly expressed as satoshis per virtual byte (sat/vB). A fee rate is different from the total fee.
- Full node
Software that independently validates blocks and transactions. A pruned full node can discard older block files after validation.
- Halving
A reduction in the permitted new block subsidy at each 210,000-block interval on Bitcoin mainnet. It does not halve transaction fees.
- Hard fork
A change that can permit blocks rejected by the old consensus rules. Following such blocks requires upgraded rules; a lasting chain split is a possible outcome.
- Hash
A fixed-length result computed from input data. A cryptographic hash helps detect changes; it does not encrypt the input.
- Lightning Network
A network of payment channels whose updates can occur off-chain, with Bitcoin transactions used for funding and settlement. Payments depend on liquidity and usable routes.
- Mempool
A node’s collection of accepted, unconfirmed transactions. Nodes can have different mempools because of policy, timing, and connectivity.
- Multisig
A spending arrangement requiring signatures from multiple keys, such as two of three. Recovery also requires reconstructing the relevant spending policy.
- Private key
Secret information used to create a digital signature. Possession of a key can authorize spending when the output’s other conditions are also satisfied.
- Proof of work
Evidence of computational effort: in Bitcoin, a block-header hash at or below a required target. Nodes also check all other rules before accepting a block.
- PSBT
Partially Signed Bitcoin Transaction: a format for sharing transaction information and collecting signatures. It is not proof that a transaction is confirmed.
- Recovery phrase
Words used by some wallets to derive a seed. Formats differ; recovery may also require a passphrase and wallet configuration. Treat the words as secret material.
- Reorganization
A change in a node’s active chain when another valid branch has more accumulated work. Transactions in disconnected blocks can lose confirmations.
- Satoshi
One hundred-millionth of a bitcoin: 0.00000001 BTC. Often shortened to “sat,” with “sats” as the plural.
- Soft fork
A change that tightens consensus constraints while allowing compliant blocks to satisfy the older rules. Older nodes do not independently enforce every new constraint.
- Subsidy
The maximum new bitcoin that a block may create under the issuance schedule. A miner’s permitted total reward also includes transaction fees.
- Transaction fee
For an ordinary transaction, the input value minus the output value. A miner can collect that difference when including the transaction in a valid block.
- UTXO
An unspent transaction output: an amount created by a previous transaction that can be spent when its locking conditions are satisfied.
- Virtual byte
The unit used for a transaction’s virtual size. Under BIP 141, virtual size is transaction weight divided by four, rounded up.
- Wallet
Software or a device that manages transaction information and often signing keys. Watch-only wallets can track activity without the ability to sign spending transactions.
No matching terms.