Bitcoin Glossary

(Work in progress)…

Social Terms

Bitcoin maximalist – a pejorative coined by Vitalik in a blog post – a person who blindly believes bitcoin to be the best in all things related to cryptocurrency. In a less derogatory sense, it can mean a person that believes they know bitcoin’s position is unassailable by nature of technology adoption curves and economic incentives.

Bitcoin minimalist – a person who believes that bitcoin’s consensus protocol level should be kept robust and simple to minimize vulnerabilities. This is done by moving most processes, features and functions up the stack, to other layers, in the very same way the internet itself has scaled and improved.

Bitcoiner –  a term of endearment, a label for a person heavily involved in bitcoin, similar to bitcoin maximalist but not derogatory.

Buttcoin – a famous skeptical subreddit r/buttcoin. They always make fun of bitcoiners, but sometimes have good skeptical takes. They have been wrong 90% of the time on the anti-bitcoin FUD.

Casascius coin – (ca-say-tious) – an early physical bitcoin coin made by Mike Caldwell, there are large runs and limited editions, more of the story here.

Corn – slang form of bitcoin.

Fiatsplaining – A very new term coined by a patron of the show @WahWhoWah – it means that a person uses simple outdated mainstream financial arguments in a discussion with a bitcoiner.

FOMO – Fear of missing out – An emotional reaction to a price increase that makes you chase and be more likely to buy the top of a rally. The opposite of a panic reaction to a price decrease.

FUD – Fear Uncertainty and Doubt – FUD is found in any community and usually consists of unfounded rumors or claims aimed at causing an emotional reaction from other members or even outsiders. It can be targeted at different demographics within or without the community. For example, certain types of rumors can scare new traders or owners of bitcoin, but don’t affect more experienced bitcoiners. To protect against FUD you must learn as much about bitcoin as possible (technicals and history), and find sources of information you can trust.

Hodl – variant of hold – first used in a bitcointalk.org forum post. The author was drunk and furious at his poor trading performance during the December 2013 rally. He misspelled the word hold and it quickly became a viral meme in the community. Today, it has morphed into an ideology, where hodlers are people that will never sell their coins. It’s a very important concept in bootstrapping a store of value for bitcoin.

Hodler – a person who hoards bitcoin and will not sell is massive dips in price, because they are in it until the end, as it were.

Nocoiner – a recent term, even has made it into the urban dictionary now – a person who has no Bitcoin. Nocoiners (usually Socialists, Lawyers or MBA Economists ) are people who missed their opportunity to buy Bitcoin at a low price because they thought it was a scam, and who is now bitter at having missed out. The nocoiner takes out his or her bitterness on Bitcoin Hodlers, by constantly claiming that Bitcoin will crash, is a scam, is a bubble, or other types of easily refuted FUD.

The Flippening – the much anticipated event where Ethereum would overtake Bitcoin in market cap, it never came – the term was adapted to all sorts of similar events in the 2017 scaling conflict, like hashpower on rival chains, node count, etc.

The Halvening – the reduction in block reward that happens roughly every four years – funny form of halving – this term appeared in 2015 as the block reward reduction was approaching. You can watch the countdown with the halvening rocket here. The bitcoin community likes to come up with little in group sayings and this one caught on. The ending of “ening” has been adopted in other terms like “The Flippening.”

Rekt – intentional misspelling of wrecked – used to describe losing all your bitcoin, or losing an argument badly.

Technical Terms

ASIC – Application Specific Integrated Circuit – These are computer chips specifically designed to work on one or one family of algorithms. The introduction of ASICs to bitcoin caused the difficulty of mining to skyrocket, making it nearly impossible for basement miners to get a ROI. ASICs are a hotly debated issue today, because of the relative centralized manufacturing process. One major company has come to dominate Bitcoin ASIC manufacturing, Bitmain, though this is quickly changing as three new companies are beginning delivery of their chips in 2018.

Block – a file containing transactions and a block header, primarily to order transactions and provide proof of work, analogous to a page in a ledger – Blocks are “found” in the process of mining and appended to the chain of previous blocks. In Satoshi’s words from a comment in the original software:

a bitcoin block definition by Satoshi
Fig. 1 – Satoshi on blocks and the block chain.

Block chain (also written as “blockchain”) – a chain of blocks – The decentralized ledger of transactions and block headers in bitcoin. The block chain is only one piece of the whole system balanced by incentives. Block chains require proof of work and are append only. They provide a censorship resistant database at the cost of efficiency. Centralized databases are much more efficient.

Some say blockchain and block chain (“block space chain”) are different. “Blockchain” has come to mean a friendlier more palatable-to-suits version of bitcoin. While “block chain” is a decentralized ledger created through proof of work. The word block chain did not appear in the whitepaper, but did make its first appearance written by Satoshi in the original software, see Fig. 1 and Fig. 2:

definition of a bitcoin block chain by Satoshi
Fig. 2 – Satoshi on the block chain.

Block reward – also known as block subsidy – the reward of bitcoin for finding a block, the incentive for miners to mine. When a miner finds a block they create a special transaction called a coinbase transaction where they create virgin coins at their own address. There is a decreasing maximum amount of reward, halved every 210,000 blocks, roughly every 4 years. The block reward started at 50 coins, halved to 25 in 2012, and halved again in 2016 to the current 12.5 coins. In 2020, the reward will be halved again to 6.25 coins.

The block reward is a very important part of the incentive structure of bitcoin. It provides an incentive to miners to maintain the block chain and order transactions into a block to prevent double spending. It is the sole incentive for miners. Some say miners also have a second incentive to mine, that being the right to vote on upgrades, but that is a perversion of the incentive structure and also impossible to implement.

Cold wallet – or offline wallet, also cold storage – this is a wallet created and maintained offline making it impossible to hack. In the past, many people printed private/public key pairs on paper from an offline computer and kept them in a safe. Hardware wallets are a derivative of a cold wallet.

Difficulty adjustment – or difficulty retarget – bitcoin is a self-adjusting system. When more hashpower starts mining the difficulty to find a block can adjust to retarget the 10 minute goal for new blocks. Bitcoin’s difficulty is retargeted every 2016 blocks or about 2 weeks.

Double spending – this is the main problem that a block chain solves. Prior to bitcoin it was impossible to solve the double spending problem without a central authority. Specifically, double spending is sending the same coin to multiple recipients. When transactions go through a central clearing house, they’d throw out the second tx, but in a decentralized system it was impossible. Bitcoin solves this through proof of work and ordering transactions into blocks.

Fork – There are two ways this term is used. 1) A split in the codebase of bitcoin. Forking bitcoin is as easy as copying the code and changing a few things. This process results in an altcoin.

2) There’s also another type of fork in regards to the block chain. If two miners find a block at almost the exact same time, and some on the network receives a block from one miner, and the other half of the network receives a block from the other miner, there is a fork in the block chain. These types of forks usually don’t last longer than 10 mins, because they are resolved when the next block is found. In very rare circumstances, forks of this nature can last for 3 blocks, but they eventually converge. It’s very safe to count 3 blocks as irreversible in this sense.

Soft Fork – A backwards compatible change to the codebase. Soft forks make the rules of bitcoin more restrictive, so the resulting valid set is smaller. All actions on the network after the soft fork remain valid to older versions of the software. This is an extremely important concept for a decentralized network. Since bitcoin is decentralized, you have control over your own node, and getting everyone to update to a new version is impossible. There’s still people running 3-4 year old versions on the bitcoin network and they continue to function as they always have.

Hard Fork – A non-compatible change to the codebase. Hard forks change the rule set of bitcoin, so some new rules can be previously invalid and some previous valid rules can be made invalid. The resulting valid rule set is different. Since bitcoin is decentralized, some nodes will not upgrade and will be left behind/kicked off the network. Hard forks have massive centralizing pressure for a network, and creates a central party of developers or large stakeholders that take control, because hard forks introduce new attack vectors not present in soft forks. Political attacks, social engineering attacks or stakeholder attacks from governments can control the central party and force changes onto the network.

Full node – also known as a fully validating node – Created by running the bitcoin software on a computer. Includes a copy of the block chain, mempool and UTXOs. Validates transactions and blocks, can broadcast transactions and act as a wallet. A full node is your vote on the network, your tool to individual sovereignty over your money. No one can tell you what software to run on your node. In the scaling conflict the winning side promoted running your own, and even kept the protocol light to make running a full node easier. Full nodes are the backbone of a decentralized network. If a node receives an invalid block (doesn’t conform to the rules of the network) it rejects it and disconnects from th

Genesis block – The very first block on the bitcoin block chain, mined by Satoshi on Jan 6th, 2009. There was a message contained in the genesis block from a Times headline, “Chancellor on Brink of Second Bailout for Banks.” Another less known fact is that there was a period of time before the second block ending on the 10th. Also the coins in the genesis block are unspendable.

Halving – the reduction in block reward that happens roughly every four years – serious form of halvening.

Hot wallet – a wallet that holds your private keys and with access to the internet, most commonly on a smartphone. In the early days of bitcoin these wallets were very unsafe, but have come a long way over the last couple of years. They now have encrypted keys in isolated environments. It’s very important that you are careful where you download your wallet. Never keep more than spending money on a hot wallet.

MASF – Miner Activated Soft Fork – When miners signal for readiness for a new feature, this signaling activates the use of new features. This was the subject of BIP9 activation that was how Segwit was originally designed to take advantage of. The major problem with MASF is that it changes the incentive structure of bitcoin itself and invites politics into the process. It also, wrongly gives the miners a feeling that they are more important than they are.

MAHF – Miner Activated Hard Hork –

Mempool – the group of transactions in a node’s memory waiting to be confirmed. In Bitcoin transactions are broadcast so the entire network can hear them, until they show up in a block they sit in the mempool. Miners take txs from the mempool and order them into blocks.

Each node may have a slightly different mempool, because they hear a slightly different set of txs than other nodes. Nodes can set an individual mempool max size for their node, ie 50MB, so anything more than that, the node will drop older txs. A reason for restricting the size of the mempool could be performance. Another option for limiting your mempool is by transaction fee. You can set it to not retain txs with fees lower than a set limit, ie 5 sats/byte.

The mempool is “cleared” by miners ordering transactions into blocks. With a maximum block weight now of 4MB and 6 blocks/hour, the mempool can theoretically be cleared at a rate of 24MB/hour. However, if people refuse to use segwit type txs, the block size is more limited.

Mining –

Private key –

Proof of work –

Proof of stake –

Public key –

Seed –

UASF –

UAHF –

Whitepaper –

Bitcoin is a set of rules that when followed by a piece of software, the software’s actions are recognized as valid by other software on the network.

TermTypeDefinition
The HalveningSocialthe reduction in block reward that happens roughly every four years – funny form of halving – this term appeared in 2015 as the block reward reduction was approaching. You can watch the countdown with the halvening rocket here. The bitcoin community likes to come up with little in group sayings and this one caught on. The ending of “ening” has been adopted in other terms like “The Flippening.”
The FlippeningSocialThe much anticipated event where Ethereum would overtake Bitcoin in market cap, it never came – the term was adapted to all sorts of similar events in the 2017 scaling conflict, like hashpower on rival chains, node count, etc.
RektSocialIntentional misspelling of wrecked – used to describe losing all your bitcoin, or losing an argument badly.
NocoinerSocialA recent term, even has made it into the urban dictionary now – a person who has no Bitcoin. Nocoiners (usually Socialists, Lawyers or MBA Economists ) are people who missed their opportunity to buy Bitcoin at a low price because they thought it was a scam, and who is now bitter at having missed out. The nocoiner takes out his or her bitterness on Bitcoin Hodlers, by constantly claiming that Bitcoin will crash, is a scam, is a bubble, or other types of easily refuted FUD.
HodlerSocialA person who hoards bitcoin and will not sell is massive dips in price, because they are in it until the end, as it were.
HodlSocialvariant of hold – first used in a bitcointalk.org forum post. The author was drunk and furious at his poor trading performance during the December 2013 rally. He misspelled the word hold and it quickly became a viral meme in the community. Today, it has morphed into an ideology, where hodlers are people that will never sell their coins. It’s a very important concept in bootstrapping a store of value for bitcoin.
FUDSocialFear Uncertainty and Doubt – FUD is found in any community and usually consists of unfounded rumors or claims aimed at causing an emotional reaction from other members or even outsiders. It can be targeted at different demographics within or without the community. For example, certain types of rumors can scare new traders or owners of bitcoin, but don’t affect more experienced bitcoiners. To protect against FUD you must learn as much about bitcoin as possible (technicals and history), and find sources of information you can trust.
FOMOSocialFear of missing out – An emotional reaction to a price increase that makes you chase and be more likely to buy the top of a rally. The opposite of a panic reaction to a price decrease.
FiatsplainingSocialA very new term coined by a patron of the show @WahWhoWah – it means that a person uses simple outdated mainstream financial arguments in a discussion with a bitcoiner.
CornSocialSlang form of bitcoin.
Casascius coinSocial(ca-say-tious) – An early physical bitcoin coin made by Mike Caldwell, there are large runs and limited editions, more of the story here.
ButtcoinSocialA famous skeptical subreddit r/buttcoin. They always make fun of bitcoiners, but sometimes have good skeptical takes. They have been wrong 90% of the time on the anti-bitcoin FUD.
BlockTechnicala file containing transactions and a block header, primarily to order transactions and provide proof of work, analogous to a page in a ledger – Blocks are “found” in the process of mining and appended to the chain of previous blocks.
a bitcoin block definition by Satoshi
Block chainTechnical(also written as “blockchain”) – a chain of blocks – The decentralized ledger of transactions and block headers in bitcoin. The block chain is only one piece of the whole system balanced by incentives. Block chains require proof of work and are append only. They provide a censorship resistant database at the cost of efficiency. Centralized databases are much more efficient.

Some say blockchain and block chain (“block space chain”) are different. “Blockchain” has come to mean a friendlier more palatable-to-suits version of bitcoin. While “block chain” is a decentralized ledger created through proof of work. The word block chain did not appear in the whitepaper, but did make its first appearance written by Satoshi in the original software.
definition of a bitcoin block chain by Satoshi
BitcoinerSocialA term of endearment, a label for a person heavily involved in bitcoin, similar to bitcoin maximalist but not derogatory.
Bitcoin MinimalistSocialA person who believes that bitcoin’s consensus protocol level should be kept robust and simple to minimize vulnerabilities. This is done by moving most processes, features and functions up the stack, to other layers, in the very same way the internet itself has scaled and improved.
Bitcoin MaximalistSocialA pejorative coined by Vitalik in a blog post – a person who blindly believes bitcoin to be the best in all things related to cryptocurrency. In a less derogatory sense, it can mean a person that believes they know bitcoin’s position is unassailable by nature of technology adoption curves and economic incentives.
ASICTechnicalApplication Specific Integrated Circuit – These are computer chips specifically designed to work on one or one family of algorithms. The introduction of ASICs to bitcoin caused the difficulty of mining to skyrocket, making it nearly impossible for basement miners to get a ROI. ASICs are a hotly debated issue today, because of the relative centralized manufacturing process. One major company has come to dominate Bitcoin ASIC manufacturing, Bitmain, though this is quickly changing as three new companies are beginning delivery of their chips in 2018.
Block rewardTechnicalalso known as block subsidy – the reward of bitcoin for finding a block, the incentive for miners to mine. When a miner finds a block they create a special transaction called a coinbase transaction where they create virgin coins at their own address. There is a decreasing maximum amount of reward, halved every 210,000 blocks, roughly every 4 years. The block reward started at 50 coins, halved to 25 in 2012, and halved again in 2016 to the current 12.5 coins. In 2020, the reward will be halved again to 6.25 coins.

The block reward is a very important part of the incentive structure of bitcoin. It provides an incentive to miners to maintain the block chain and order transactions into a block to prevent double spending. It is the sole incentive for miners. Some say miners also have a second incentive to mine, that being the right to vote on upgrades, but that is a perversion of the incentive structure and also impossible to implement.
Cold walletTechnicalor offline wallet, also cold storage – this is a wallet created and maintained offline making it impossible to hack. In the past, many people printed private/public key pairs on paper from an offline computer and kept them in a safe. Hardware wallets are a derivative of a cold wallet.
Difficulty adjustmentTechnicalor difficulty retarget – Bitcoin is a self-adjusting system. When more hashpower starts mining the difficulty to find a block can adjust to retarget the 10 minute goal for new blocks. Bitcoin’s difficulty is retargeted every 2016 blocks or about 2 weeks.
Double spendingTechnicalThis is the main problem that a block chain solves. Prior to bitcoin it was impossible to solve the double spending problem without a central authority. Specifically, double spending is sending the same coin to multiple recipients. When transactions go through a central clearing house, they’d throw out the second tx, but in a decentralized system it was impossible. Bitcoin solves this through proof of work and ordering transactions into blocks.
ForkTechnicalThere are two ways this term is used. 1) A split in the codebase of bitcoin. Forking bitcoin is as easy as copying the code and changing a few things. This process results in an altcoin.

2) There’s also another type of fork in regards to the block chain. If two miners find a block at almost the exact same time, and some on the network receives a block from one miner, and the other half of the network receives a block from the other miner, there is a fork in the block chain. These types of forks usually don’t last longer than 10 mins, because they are resolved when the next block is found. In very rare circumstances, forks of this nature can last for 3 blocks, but they eventually converge. It’s very safe to count 3 blocks as irreversible in this sense.
Soft forkTechnicalA backwards compatible change to the codebase. Soft forks make the rules of bitcoin more restrictive, so the resulting valid set is smaller. All actions on the network after the soft fork remain valid to older versions of the software. This is an extremely important concept for a decentralized network. Since bitcoin is decentralized, you have control over your own node, and getting everyone to update to a new version is impossible. There’s still people running 3-4 year old versions on the bitcoin network and they continue to function as they always have.
Hard forkTechnicalA non-compatible change to the codebase. Hard forks change the rule set of bitcoin, so some new rules can be previously invalid and some previous valid rules can be made invalid. The resulting valid rule set is different. Since bitcoin is decentralized, some nodes will not upgrade and will be left behind/kicked off the network. Hard forks have massive centralizing pressure for a network, and creates a central party of developers or large stakeholders that take control, because hard forks introduce new attack vectors not present in soft forks. Political attacks, social engineering attacks or stakeholder attacks from governments can control the central party and force changes onto the network.
Full nodeTechnicalalso known as a fully validating node – Created by running the bitcoin software on a computer. Includes a copy of the block chain, mempool and UTXOs. Validates transactions and blocks, can broadcast transactions and act as a wallet. A full node is your vote on the network, your tool to individual sovereignty over your money. No one can tell you what software to run on your node. In the scaling conflict the winning side promoted running your own, and even kept the protocol light to make running a full node easier. Full nodes are the backbone of a decentralized network. If a node receives an invalid block (doesn’t conform to the rules of the network) it rejects it and disconnects from the...
Genesis blockTechnicalThe very first block on the bitcoin block chain, mined by Satoshi on Jan 6th, 2009. There was a message contained in the genesis block from a Times headline, “Chancellor on Brink of Second Bailout for Banks.” Another less known fact is that there was a period of time before the second block ending on the 10th. Also the coins in the genesis block are unspendable.
HalvingTechnicalThe reduction in block reward that happens roughly every four years – serious form of halvening.
Hot walletTechnicalA wallet that holds your private keys and with access to the internet, most commonly on a smartphone. In the early days of bitcoin these wallets were very unsafe, but have come a long way over the last couple of years. They now have encrypted keys in isolated environments. It’s very important that you are careful where you download your wallet. Never keep more than spending money on a hot wallet.
MASFTechnicalMiner Activated Soft Fork – When miners signal for readiness for a new feature, this signaling activates the use of new features. This was the subject of BIP9 activation that was how Segwit was originally designed to take advantage of. The major problem with MASF is that it changes the incentive structure of bitcoin itself and invites politics into the process. It also, wrongly gives the miners a feeling that they are more important than they are.
MAHFTechnicalMiner Activated Hard Hork –
MempoolTechnicalThe group of transactions in a node’s memory waiting to be confirmed. In Bitcoin transactions are broadcast so the entire network can hear them, until they show up in a block they sit in the mempool. Miners take txs from the mempool and order them into blocks.

Each node may have a slightly different mempool, because they hear a slightly different set of txs than other nodes. Nodes can set an individual mempool max size for their node, ie 50MB, so anything more than that, the node will drop older txs. A reason for restricting the size of the mempool could be performance. Another option for limiting your mempool is by transaction fee. You can set it to not retain txs with fees lower than a set limit, ie 5 sats/byte.


The mempool is “cleared” by miners ordering transactions into blocks. With a maximum block weight now of 4MB and 6 blocks/hour, the mempool can theoretically be cleared at a rate of 24MB/hour. However, if people refuse to use segwit type txs, the block size is more limited.
AddressTechnicalA Bitcoin address is similar to a physical address or an email. It is the only information you need to provide for someone to pay you with Bitcoin. An important difference, however, is that each address should only be used for a single transaction.
BitTechnicalBit is a common unit used to designate a sub-unit of a bitcoin - 1,000,000 bits is equal to 1 bitcoin (BTC). This unit is usually more convenient for pricing tips, goods and services.
ConfirmationTechnicalConfirmation means that a transaction has been processed by the network and is highly unlikely to be reversed. Transactions receive a confirmation when they are included in a block and for each subsequent block. Even a single confirmation can be considered secure for low value transactions, although for larger amounts like $1000 USD, it makes sense to wait for 6 confirmations or more. Each confirmation exponentially decreases the risk of a reversed transaction.
CryptographyTechnicalCryptography is the branch of mathematics that lets us create mathematical proofs that provide high levels of security. Online commerce and banking already uses cryptography. In the case of Bitcoin, cryptography is used to make it impossible for anybody to spend funds from another user's wallet or to corrupt the block chain. It can also be used to encrypt a wallet, so that it cannot be used without a password.
Hash rateTechnicalThe hash rate is the measuring unit of the processing power of the Bitcoin network. The Bitcoin network must make intensive mathematical operations for security purposes. When the network reached a hash rate of 10 Th/s, it meant it could make 10 trillion calculations per second.
MiningTechnicalBitcoin mining is the process of making computer hardware do mathematical calculations for the Bitcoin network to confirm transactions and increase security. As a reward for their services, Bitcoin miners can collect transaction fees for the transactions they confirm, along with newly created bitcoins. Mining is a specialized and competitive market where the rewards are divided up according to how much calculation is done. Not all Bitcoin users do Bitcoin mining, and it is not an easy way to make money.
P2PTechnicalPeer-to-peer refers to systems that work like an organized collective by allowing each individual to interact directly with the others. In the case of Bitcoin, the network is built in such a way that each user is broadcasting the transactions of other users. And, crucially, no bank is required as a third party.
Private keyTechnicalA private key is a secret piece of data that proves your right to spend bitcoins from a specific wallet through a cryptographic signature. Your private key(s) are stored in your computer if you use a software wallet; they are stored on some remote servers if you use a web wallet. Private keys must never be revealed as they allow you to spend bitcoins for their respective Bitcoin wallet.
SignatureTechnicalA cryptographic signature is a mathematical mechanism that allows someone to prove ownership. In the case of Bitcoin, a Bitcoin wallet and its private key(s) are linked by some mathematical magic. When your Bitcoin software signs a transaction with the appropriate private key, the whole network can see that the signature matches the bitcoins being spent. However, there is no way for the world to guess your private key to steal your hard-earned bitcoins.
WalletTechnicalA Bitcoin wallet is loosely the equivalent of a physical wallet on the Bitcoin network. The wallet actually contains your private key(s) which allow you to spend the bitcoins allocated to it in the block chain. Each Bitcoin wallet can show you the total balance of all bitcoins it controls and lets you pay a specific amount to a specific person, just like a real wallet. This is different to credit cards where you are charged by the merchant.
Proof-of-workTechnical
Proof-of-stakeTechnical
Delegated-proof-of-stakeTechnical
Public keyTechnical
SeedTechnical
UASFTechnicalUser Activated Soft Fork - soft forks are updates that maintain backwards compatibility. User activated is the method used to implement the update. In a UASF, the users make it known that they support the upgrade. It can involve a user created patch to the code that all users that are running it on their node give an ultimatum to the miners, upgrade or else we will reject your blocks.
UAHFTechnicalUser Activated Hard Fork - a hard fork is an incompatible change to the bitcoin code, that will result in a new network and new currency, using new rules. A UAHF is a fork of the network driven by less than consensus and pushed forward by nodes/users.
WhitepaperTechnical