Bitcoin Glossary: The Key Terms from A to Z

What do the most important bitcoin terms mean? This bitcoin glossary explains about 70 terms you will come across when buying, securing and holding bitcoin, each in two or three sentences without jargon. They are listed alphabetically. Where a topic needs more space, a link takes you to the full article in the magazine.

You are reading about bitcoin, and by the second paragraph you have already met mempool, UTXO and cold storage. Use the table of contents to jump to the letter, read the two sentences and carry on where you were. If you want to start from the very beginning, begin with the beginner's guide What is bitcoin?.

Bitcoin glossary: the units of bitcoin

In everyday use you will come across three units:

At a price of €61’600 (as of Nov 13, 2026), one sat costs just over 0.06 cents. For €10 you get about 16’000 sats, for CHF 10 about 17’500. Why you don't need a whole bitcoin is shown in Sats explained.

0–9

21 million: The cap on all bitcoin, exactly 20’999’999.9769 BTC. It follows from the initial reward of 50 and the halvings. As of Nov 12, 2026, about 20.11 million have been mined; the last sat will be created around the year 2140. More in Why there are only 21 million bitcoin.

51% attack: An attacker who controls more than half of all miners' computing power could reverse their own payments and so spend the same bitcoin twice. They could not steal other people's bitcoin or create new ones.

A

Address: The string of characters you receive bitcoin to, comparable to an account number. It is derived from your public key. A new address for each payment protects your privacy. The formats:

All-time high (ATH): The highest price bitcoin had ever reached up to that point, in a given currency.

Altcoin: Any cryptocurrency other than bitcoin, from Ethereum to meme coins. What that means for you is in Bitcoin vs. altcoins.

ASIC: A chip that can do only one thing: compute bitcoin's SHA-256 hash as fast as possible. Mining with ordinary computers hasn't paid off for years.

B

Bear market: A long period of falling prices. At each bottom so far, bitcoin's price was 77 to 93% below the previous high. The opposite is a bull market.

BIP (Bitcoin Improvement Proposal): A public proposal to change bitcoin or define a standard. BIP 39, for example, defines the word list for the seed. Whether a proposal takes effect is ultimately decided by users, by running software that implements it.

Bitcoin, bitcoin, BTC: Capitalized, it usually means the network and the system; lowercase, the unit. BTC is the ticker on exchanges.

Block: A bundle of confirmed payments. Roughly every ten minutes, a miner adds a new block to the blockchain. As of Nov 12, 2026, it was block 975’579.

Block reward: New bitcoin plus all fees that a miner receives for a valid block. Since the halving on Apr 20, 2024, it has been 3.125 new bitcoin per block.

Blockchain: Bitcoin's public ledger, a chain of blocks in which each refers to the one before. Anyone wanting to change an old entry would have to recompute all later blocks. More in Blockchain explained simply.

C

CBDC (central bank digital currency): Digital money issued directly by a central bank, such as the planned digital euro. Unlike bitcoin it is centrally controlled, and the central bank sets the supply.

Cold storage: Keeping your keys on a device or paper that is never connected to the internet, usually a hardware wallet. The opposite is a hot wallet.

Custodial: A third party, such as an exchange or app, holds your keys. Convenient, but you are trusting that it stays solvent and honest. The opposite is self-custody.

D

DCA (dollar-cost averaging): The English term for a savings plan: you buy a fixed amount at fixed intervals, whatever the price. When the price is high you get fewer sats, when it is low more. How providers differ is shown in the bitcoin savings plan comparison.

Difficulty: How hard it is to find a valid block. Every 2’016 blocks, roughly every two weeks, the network adjusts it so that blocks are ten minutes apart on average. More computing power doesn't make bitcoin faster, only more secure.

Digital credit: Preferred stock and bonds of companies that hold bitcoin. They pay a regular dividend, and the issuer's bitcoin stand behind them as security. The related terms, from stated amount to BTC coverage, are explained in the glossary on the Digital Credit page.

Double spending: Spending the same bitcoin twice. The blockchain prevents it, because every payment is recorded in exactly one order and all nodes check the same chain.

E

ETF / ETP: Exchange-traded products that track the bitcoin price. In the US, spot ETFs have traded since Jan 11, 2024; in Europe, comparable products are usually called ETPs. With them you buy a claim on the provider, not bitcoin of your own.

Exchange: A company where you buy and sell bitcoin for euros or francs. As long as your bitcoin sit there, they often legally belong to the exchange; you only have a claim.

F

Fee: What you pay the miner for a payment. It doesn't depend on the amount but on the space your payment needs in the block, and is stated in sat/vB (sats per virtual byte).

Fiat money: Money whose value rests on government decree and trust, not on any backing: euros, francs and dollars. Since Aug 15, 1971, no major currency has been tied to gold. More in The fiat money system explained simply.

Floor: On this site, the lower bound of the Power Law model: 0.42 × the Power Law line. Since 2010, bitcoin has closed below it on only 3.7% of all days, most recently on Jun 30, 2026. That is not a guarantee.

FOMO and FUD: FOMO (fear of missing out) is the fear of missing something, which makes people buy when prices rise. FUD (fear, uncertainty, doubt) drives people to sell when prices fall. Both lead to costly mistakes.

Fork: A change to the rules. A soft fork tightens them so that old software can keep running alongside; that is how SegWit and Taproot came about. A hard fork is not backward compatible and can split the chain; that is how Bitcoin Cash was created on Aug 1, 2017. More in Soft forks and Taproot.

G

Genesis block: The first block of the bitcoin blockchain, created on Jan 3, 2009. Satoshi Nakamoto embedded the headline of the London Times in it: "Chancellor on brink of second bailout for banks".

H

Halving: Every 210’000 blocks, roughly every four years, the number of new bitcoin per block is cut in half. Over four halvings it went from 50 in 2009 to 3.125 since 2024. The next is expected at block 1’050’000 in spring 2028. More in The bitcoin halving explained simply.

Hardware wallet: A small device that stores your keys offline and signs payments inside the device itself. The key never leaves it, even if your computer is infected.

Hash: A fixed-length digital fingerprint that a formula produces from any data. Change one character and the whole hash changes. Bitcoin uses the SHA-256 formula.

Hashrate: The combined computing power of all miners, measured in hashes per second. The higher it is, the more expensive an attack would be.

HODL: Bitcoin slang for holding for the long term. It goes back to a forum post from Dec 18, 2013, titled "I AM HODLING", typo included. How to stick with it through weak phases is shown in HODL psychology.

Hot wallet: A wallet on a device connected to the internet, such as an app on your phone. Practical for small amounts; for larger ones, cold storage is safer.

K

KYC (know your customer): The obligation of exchanges and banks to verify their customers' identity, usually by ID document and video. In the EU and Switzerland it applies to every licensed provider.

L

Lightning Network: A payment network built on top of bitcoin. Payments run through channels between participants, arrive in seconds and often cost only a few sats. More in The Lightning Network explained.

M

Mempool: The waiting room for payments that have been sent but are not yet in a block. Miners usually pick the payments with the highest fee per byte first. When the mempool is full, fees rise.

MiCA: The EU regulation on markets in crypto-assets. Since Dec 30, 2024, crypto providers in the EU need a license under MiCA. It regulates your exchange, not your own wallet.

Miner: Anyone who uses computing power to find new blocks. Miners order payments and receive the block reward for it. They cannot change the rules. More in Bitcoin mining explained.

Mining pool: A group of miners who combine their computing power and share the reward in proportion.

mNAV: A treasury company's market value divided by the value of its bitcoin. Above 1×, the market is paying more than the bitcoin are worth.

Multisig: A wallet that needs several signatures for a payment, such as 2 of 3 keys. If one key fails or is stolen, the bitcoin are still safe.

N

Node: A computer running bitcoin software, usually the open-source Bitcoin Core. It checks every block and every payment against the rules itself instead of trusting others.

Not your keys, not your coins: The motto of self-custody. If you don't hold the keys yourself, you don't own bitcoin, just a promise.

P

Passphrase: A freely chosen extra word added to the seed, often called the "25th word". It creates an entirely different wallet. Anyone who finds the seed can't reach the bitcoin without the passphrase. If you forget it, you can't reach them either.

Peer-to-peer: Directly from person to person, with no bank or payment service in between. That is how the very title of the white paper describes bitcoin: "A Peer-to-Peer Electronic Cash System".

Power Law: A model that describes bitcoin's long-term price as a function of the time since the genesis block. The model explains the course since 2010 well (R² 0.961), but says nothing about individual months. More in The bitcoin Power Law explained.

Private key: A secret number you use to sign payments. Whoever knows it can spend the bitcoin. It is derived from your seed.

Proof of work: The method by which miners prove they have spent electricity and computing time. It makes forging the blockchain expensive.

Public key: The counterpart of the private key. Your addresses are created from it. With it, anyone can check that a signature is genuine without knowing the private key.

R

RBF (replace-by-fee): Replacing a still unconfirmed payment with the same payment at a higher fee so that it gets into a block faster. Most wallets offer this as "bump fee".

S

Satoshi (sat): The smallest unit, 0.00000001 BTC. Named after the inventor.

Satoshi Nakamoto: The pseudonym of the person or group who invented bitcoin. The nine-page white paper appeared on Oct 31, 2008, the first block on Jan 3, 2009. In 2011 Satoshi withdrew. More in Satoshi Nakamoto and the origins of bitcoin.

Savings plan: See DCA. On this site, the savings plan calculator runs it through with real prices.

Seed (recovery phrase): 12 or 24 words from a fixed list of 2’048 words. All the keys of your wallet can be recreated from them at any time. Whoever has the seed has your bitcoin. Write it down offline and show it to no one.

SegWit (Segregated Witness): An upgrade from Aug 24, 2017 that stores signatures separately from the payment data. It lowered fees and made the Lightning Network practical. Addresses starting with bc1q use it.

Self-custody: You hold your keys yourself, without an exchange or bank. No one can freeze them, but no one will help you if you lose the seed. How to get started is shown in Setting up a bitcoin wallet.

Spread: The difference between a provider's buying price and selling price. Many apps advertise "€0 fees" and earn on the spread.

Stablecoin: A token pegged to a currency such as the dollar. Its stability depends on the issuer and its reserves, not on bitcoin.

Stock-to-Flow: A model that derives the price from the ratio of the existing supply to the new supply per year. It became well known in 2019 and was far too high from 2021 on (the comparison with the Power Law). This site uses the Power Law instead.

T

Taproot: An upgrade from Nov 14, 2021 (block 709’632). It brought Schnorr signatures and makes multisig and complex conditions cheaper and more private. Addresses starting with bc1p use it.

Top band: On this site, the upper line of the Power Law model. Earlier highs were near it. When partial sales there can make sense is shown by the calculator Sell the top, buy back at the floor.

Transaction: A bitcoin payment. It spends earlier incoming payments and carries the owner's signature. It counts as confirmed once it is in a block. After six confirmations, about an hour, it is considered practically final.

Treasury company: A company that holds bitcoin as part of its reserves, such as Strategy, Metaplanet or Capital B. Current holdings are in the treasury overview.

U

UTXO (unspent transaction output): An incoming payment that has not yet been spent. Your wallet shows you one total; on the blockchain it consists of individual UTXOs, like notes in a wallet. Many small UTXOs make later payments more expensive.

V

Volatility: How much the price swings. For bitcoin it was about 172% a year in 2011 and still about 42% in 2025. That is much more than for stocks.

W

Wallet: An app or device that manages your keys. Your bitcoin are not in the wallet but on the blockchain. If the wallet breaks, you restore it on another device with the seed.

Wholecoiner: Someone who owns at least one whole bitcoin, that is 100 million sats. The way there is described in Becoming a wholecoiner.

Z

Zones: On this site, the division of the price between the lines of the Power Law model: floor zone, accumulation, fair, hot and euphoria. Where the price stands today is shown on the Power Law page.