Glossary

$ ls terms/

$ cat terms.txt

address

A string that others use to send you bitcoin. Wallets derive addresses from keys, and one wallet can produce many of them.

block

A batch of transactions added to the blockchain, linked to the block before it.

cold storage

Holding keys offline, away from internet-connected devices, to reduce exposure to online attacks. It describes a practice, not a specific product.

confirmation

The inclusion of a transaction in a block on the chain. Each later block built on top of it adds to the work that would be needed to reverse it.

custodial account

An account where a company holds the keys on your behalf. You rely on that company's systems, rules, and solvency, and you hold a claim against it rather than direct control.

extended public key

A key that lets a watch-only wallet derive addresses and read their history. It cannot sign transactions, so it cannot spend.

hardware wallet

A dedicated device that keeps private keys and signs transactions on the device itself, so the secret is not exposed to the computer it connects to.

mempool

The pool of valid transactions that nodes have received but not yet included in a block.

multisig

A setup where spending requires signatures from more than one key. It spreads control across keys, and it also spreads responsibility across the people who hold them.

passphrase

An optional extra word that some wallets let you add to a recovery phrase. It changes the keys that result, so a forgotten or mistyped passphrase can leave funds unreachable even when the phrase itself is correct.

phishing

An attempt to trick you into revealing a secret or installing a fake app, usually through a message, a web page, or a call that looks legitimate.

private key

The secret value that authorizes spending. Anyone who holds it can sign transactions for the matching funds.

recovery phrase

An ordered list of ordinary words that encodes the master secret from which a wallet derives its keys. Also called a seed phrase.

satoshi

The smallest unit of bitcoin. One satoshi is one hundred millionth of a bitcoin. People often shorten it to sat.

self-custody

Holding your own keys, so that no third party can move your bitcoin without your signature.

settlement

The point at which a payment is treated as final by the person receiving it. How many confirmations that takes depends on the situation and the risk involved, and the receiver decides.

watch-only wallet

A wallet that can see balances and history from a public address or extended public key, but cannot spend.

Definitions here describe terms, not products. Nothing in this glossary is financial, legal, or tax advice, or a recommendation to buy, sell, or hold any asset.