Glossary
Bitcoin words, in plain English
- Address
- A string you share to receive bitcoin. Safe to share. Generated from your keys.
- Air-gapped
- A device with no network connection of any kind. Data crosses by QR code or memory card.
- BIP39
- The standard list of 2,048 words used to write seed phrases.
- Block
- A batch of transactions added to the blockchain about every ten minutes.
- Blockchain
- The public record of every bitcoin transaction, kept by thousands of nodes.
- Cold storage
- Keeping private keys on a device that never connects to the internet.
- Descriptor
- A short text that describes how a wallet's addresses are built. Required to recover a multisig wallet.
- Entropy
- Randomness used to create a seed. Dice rolls let you add your own.
- Exchange
- A company where you buy and sell bitcoin. Holds the keys while coins stay there.
- Faucet
- A website that gives out free test coins on signet or testnet.
- Halving
- The cut in the mining reward that happens about every four years.
- Hardware wallet
- A dedicated device that stores keys and signs transactions without exposing the keys.
- Hot wallet
- A wallet app on an internet-connected phone or computer.
- Lightning
- A payment network built on Bitcoin for fast, cheap small payments.
- Mining
- Using computers to add new blocks, earning new bitcoin plus fees.
- Multisig
- A wallet that needs several keys to spend, for example any 2 of 3.
- Node
- A computer running Bitcoin software that checks every rule and block for itself.
- Passphrase
- An optional extra word added to a seed. Creates a different wallet. Forget it and the funds are lost.
- Private key
- The secret that lets you spend bitcoin. Whoever holds it controls the coins.
- PSBT
- Partially Signed Bitcoin Transaction. The file format used to carry a transaction to an offline signer and back.
- Sats
- Short for satoshis. One bitcoin is 100,000,000 sats.
- Seed phrase
- 12 or 24 words that can rebuild your entire wallet. Also called a recovery phrase.
- SeedQR
- A seed phrase written as a QR code, used by SeedSigner and some other signers.
- Self-custody
- Holding your own keys instead of trusting a company.
- Signet
- A Bitcoin test network with free coins of no value. For practice.
- Signing
- Using a private key to approve a transaction.
- Tails
- A privacy-focused operating system that runs from a USB stick and forgets everything on shutdown.
- Watch-only wallet
- A wallet that can see balances and make addresses but can't spend, because it holds no private keys.