- Address
- A short encoding of the script that must be satisfied to spend a new output. You share an address to receive. Sharing it does not share the private key.
Glossary
What is what. One or two sentences each, then the longer read.
No matches.
A
B
- Block
- A batch of transactions plus a header, chained to the previous block by the hash of that header. Miners compete to publish the next valid one.
- Block limit
- A block may carry at most 4,000,000 weight units, about 1,000,000 virtual bytes. Non-witness bytes count as 4 weight units. Witness bytes count as 1.
- Block subsidy
- The new bitcoin created in a block and paid to the miner who found it, on top of fees. The subsidy is 3.125 BTC since the halving at block 840,000 on 20 April 2024.
C
- Confirmation
- A transaction is confirmed once a block includes it. Each block mined on top of that block is another confirmation. Six is a common convention for large payments, not a consensus rule.
- CPFP
- Child-pays-for-parent. A recipient spends an unconfirmed output and attaches a high fee, so a miner who wants that fee has reason to include the parent as well.
D
- Descriptor
- A text description of how a wallet’s keys and scripts fit together, standardised in BIP380. With multisig, the descriptor is part of the backup, not only the seed phrases.
- Difficulty
- The setting that keeps blocks at about one every 10 minutes. It is recalculated every 2,016 blocks from the time those blocks actually took, and the change is capped at a factor of four.
F
- Fee rate
- The fee of a transaction divided by its virtual size, in satoshis per virtual byte (sat/vB). Miners who want the most fees usually fill limited block space with the highest fee rates, not the highest absolute fees.
H
- Halving
- Every 210,000 blocks the new-coin subsidy is cut in half. The series caps total supply at 21,000,000 (real cap: 20,999,999.9769 BTC). The next cut is at block 1,050,000. The date moves with the real block interval.
- Hashrate
- An estimate of how fast miners, together, are trying block hashes. It is inferred from the difficulty and recent block times. A node does not need the figure to check a block.
L
- Lightning
- A network of payment channels that moves bitcoin off-chain and settles on-chain when a channel opens or closes. The academy games do not use Lightning, and they do not pay sats.
M
- Mempool
- A node’s own set of valid transactions that are not in a block yet. There is no single mempool for the whole network. Nodes hear transactions at different times and can run different policy.
- Multisig
- A lock that asks for m signatures out of n keys. It can split loss from theft: one missing key need not stick the coins, and one stolen key need not move them. The descriptor has to be backed up with the seeds.
N
- Node
- Software that checks transactions and blocks against the consensus rules and relays them. A full node does not have to take a miner’s or an exchange’s word for those rules.
P
- Private key
- A secret number that can authorise a spend of the coins locked to it. Anyone who copies it can move those coins. It is what a seed phrase is for restoring.
- Proof of work
- The rule that a block header’s hash must come in under a target. Miners change a nonce and hash again. The work is what makes rewriting old blocks expensive.
- Public key
- A value derived from the private key. Other people use it to check a signature. On its own it is not enough to spend the coins.
R
- RBF
- Replace-by-fee. Before a transaction is mined, the sender can broadcast a new version that spends the same coins with a higher fee. BIP125 defined opt-in signalling. Since Bitcoin Core 28.0, nodes accept replacements by default whether or not the original signalled. So treat any unconfirmed payment as replaceable.
S
- Sats
- The smallest unit on the Bitcoin chain. One bitcoin is 100,000,000 sats. Fees are usually counted in sats, and fee rate in sats per virtual byte.
- Seed phrase
- A list of 12 or 24 words, usually from the BIP39 list, that encodes the entropy for a wallet’s master seed. Anyone with the words — and the passphrase, if there is one — can restore the keys.
- Self-custody
- Holding the keys that can spend your coins, rather than leaving that power with an exchange or other custodian. You can move the coins without their permission, and you are responsible for the backup.
T
- Timelock
- A rule that a transaction cannot be mined until a given time or block height. Absolute and relative timelocks are part of the protocol. A “one year” delay in a game is a sample of the idea, not a fixed constant.
U
- UTXO
- An unspent transaction output. Bitcoin tracks these outputs, not account balances. A transaction spends existing outputs and creates new ones.
V
- vB
- A virtual byte: a transaction’s weight in weight units, divided by four. Fee rate is usually quoted in satoshis per virtual byte.