Glossary
Source: raw/Start/glossary.md — the master Bitcoin term reference for 21ideas.org. All terms defined in the Russian educational context of the site. Terms with dedicated wiki pages are linked.
A
51% Attack
When a miner or group controls more than 50% of the network’s hash rate, enabling double-spend attacks and reorg of recent blocks. Cannot create new coins or steal from other wallets. See proof-of-work].
Address
A unique string of characters used to receive Bitcoin transactions. Created from a public key via cryptographic hashing. Mainnet addresses start with 1 (P2PKH), 3 (P2SH), or bc1 (native SegWit / Taproot). See address-types].
Algorithm
A sequence of unambiguous instructions used to solve a problem. Bitcoin uses SHA-256 for block hashing and PoW for network security.
Atomic swaps
Cross-chain or off-chain exchange of one asset for another without custodial intermediaries. Uses HTLCs to ensure both sides of the exchange complete or neither does.
AML (Anti-Money Laundering)
International rules ostensibly aimed at preventing money laundering. The site takes a critical view: AML policies are often used to serve narrow interests rather than prevent crime. Often paired with KYC.
ASIC (Application-Specific Integrated Circuit)
Specialized chips designed for a single task. In Bitcoin: ASICs perform SHA-256 hashing far more efficiently than CPUs or GPUs. Examples: Antminer S19, Whatsminer M30S. See mining].
B
Bitcoin
The first decentralized cryptocurrency, created in 2008 by Satoshi Nakamoto. Protocol/network = Bitcoin (capital B); the monetary unit = bitcoin (lowercase b). Hard cap: 21M BTC. Consensus: Proof of Work. See bitcoin], satoshi-nakamoto].
BIP (Bitcoin Improvement Proposal)
A formal document proposing changes to the Bitcoin protocol. Anyone can write a BIP. Major BIPs: BIP32 (HD wallets), BIP39 (mnemonics), BIP141 (SegWit), BIP340-342 (Taproot). See governance].
Block
A group of transactions bundled by miners. Average block time: 10 minutes. Transactions with higher fees are included first. Current size limit: ~1MB (base weight) / 4MB (block weight with SegWit).
Blockchain
A distributed ledger of data consisting of blocks linked in linear sequence. Each block contains: transaction data, hash of the previous block, metadata (timestamp, difficulty). Immutability: altering one block requires recalculating all subsequent blocks. See bitcoin].
Block explorer
A tool providing information about transactions and blocks in the Bitcoin network. Example: mempool.space.
Block reward
The mechanism by which new bitcoin enters circulation. Consists of: (1) subsidy (new coins) + (2) transaction fees. Subsidy halves every 210,000 blocks. Current (2024): 3.125 BTC. See scarcity].
BOLT (Basis of Lightning Technology)
The specification documents for the Lightning Network protocol. BOLT 11 defines the Lightning invoice format. See lightning-network].
Brute Force Attack
Automated trial-and-error attempt to guess a password or seed. Protected against by BIP39 passphrase and the vast key space of Bitcoin cryptography.
Byzantine Generals Problem
A cryptological problem of coordination between remote parties where some may be malicious. Satoshi Nakamoto was the first to solve this, via Proof of Work + longest chain rule. Enables trustless consensus in a network with unknown participants.
C
Candidate block
A temporary block created by a miner for submission to the blockchain, before a valid PoW hash is found.
Coinbase transaction
A special type of transaction with no inputs, created by miners when a new block is found. Always the first transaction in a block. Pays the block reward (subsidy + fees) to the miner. The Genesis block’s coinbase cannot be spent.
Cold storage
Storing bitcoin with keys generated and kept offline. Hardware wallets are the most popular cold storage tool. Safest method for long-term holding. See security], storage].
Confirmation
The number of blocks added to the chain after the block containing your transaction. 1 confirmation = your transaction is in a block. 6 confirmations is considered safe for large transactions.
Cryptocurrency
Digital currency using cryptography for transaction security and verification. Bitcoin is the first. All others (altcoins) are considered shitcoins by the 21ideas.org site perspective. See overview].
Cryptography
The science of protecting information with mathematical methods. Bitcoin uses: (1) asymmetric cryptography (key pairs) for transaction signing; (2) hash functions (SHA-256) for block IDs.
Custodial storage
Holding cryptocurrency where a third party controls the private keys. User holds an IOU. Risk: exchange insolvency, hacking, regulatory seizure. “Not your keys, not your coins.” See security].
Cypherpunk
A digital technology activist who strongly supports cryptographic solutions for social and political goals. The cypherpunk movement directly produced Bitcoin. See cypherpunks].
D
Decentralization
Distribution of power, control, and management among multiple network participants. In Bitcoin: thousands of nodes each hold a full copy of the blockchain; no central authority. See bitcoin], governance].
Deflation
Increase in purchasing power of money over time, often caused by a limited supply. Bitcoin is deflationary by design (fixed 21M supply + lost keys reduce circulating supply). Distinction: growth deflation (good — productivity) vs. credit deflation (bad — credit contraction). See money].
Desktop wallet
A software wallet on a computer providing full control over private keys. Recommended in combination with hardware wallets. Example: Electrum, Sparrow.
Deterministic wallet
A wallet system deriving all keys from a single seed. Allows easy backup and restoration. Standard: BIP32 (HD wallets). Seeds typically serialized as BIP39 mnemonic phrases. See security].
Difficulty adjustment
A protocol mechanism that adjusts mining difficulty every 2,016 blocks (~2 weeks) to maintain ~10-minute block times regardless of hash rate changes. See mining], proof-of-work].
Double Spend
An attempt to spend the same bitcoin twice. Bitcoin solved this for the first time in digital space via the public blockchain + PoW consensus. See bitcoin], proof-of-work].
E
Encryption
The process of converting data into an encrypted format inaccessible to outsiders. Bitcoin uses asymmetric encryption (ECDSA / Schnorr) for transaction signing.
Escrow
A contractual arrangement where a third party holds funds until conditions are met. In Bitcoin: implemented natively via multisig addresses (e.g., Hodl Hodl uses 2-of-3 multisig escrow for P2P trades). See buying].
Exchange
A service allowing users to buy, sell, and trade Bitcoin. Centralized exchanges require KYC, linking identity to addresses permanently. See buying], privacy].
F
Fee
Payment offered by transaction sender to miners for block inclusion. Expressed in satoshis per byte (sat/B). Higher fee = faster confirmation. If too low, transaction may stay in mempool indefinitely. See utxo].
Fiat
Government-issued currency backed by decree, not a physical commodity. No hard supply cap. The fiat system is the main alternative to Bitcoin that the 21ideas.org library critiques. See money], fiat-standard].
Fork
A process of changing consensus rules that may result in blockchain splits. Hard fork: new chain incompatible with old (e.g., Bitcoin Cash). Soft fork: backward-compatible change (e.g., SegWit, Taproot). See governance], blocksize-war].
G
Genesis block
Block 0, mined January 3, 2009. Contains the embedded message: “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks.” The genesis block’s coinbase output cannot be spent (protocol quirk). See timeline].
H
Halving
An event in Bitcoin occurring every ~210,000 blocks (~4 years) that cuts the block subsidy in half. Ensures gradually declining emission toward 21M cap. See scarcity].
Hard fork
An extension of consensus rules where previously invalid blocks become valid. Non-upgraded nodes cannot process new-rule blocks. Requires near-universal consensus. Examples: Bitcoin Cash (2017), BSV. See governance], blocksize-war].
Hardware wallet
A physical device designed to store private keys offline. Protects against remote hacking and malware. See security].
Hash
The output of a hash function that transforms arbitrary-length input into a fixed-length string. Bitcoin uses SHA-256. Properties: unique per input, cannot be reversed, small input changes produce completely different output.
Hashing
The process of transforming arbitrary-length data into a fixed-length output via a hash function. Bitcoin uses SHA-256 twice (SHA-256d) for block hashing. See mining].
Hash rate
A measure of computational power used for mining, expressed in hashes per second (H/s). Higher network hash rate = more security. Growth in hash rate triggers difficulty adjustment. See proof-of-work].
Hex / Hexadecimal
A base-16 number system using digits 0-9 and letters a-f. SHA-256 hashes are expressed as 64 hex characters (256 bits).
Hot wallet)
Any Bitcoin wallet running on an internet-connected device. Higher convenience, lower security vs. cold storage. See security].
HTLC (Hash Time Lock Contract)
A conditional payment contract using a cryptographic hash and a time lock. Enables trustless multi-hop routing in Lightning: payment succeeds if the recipient reveals a preimage within the time limit; otherwise it refunds automatically. See lightning-network].
I
Inflation
Reduction in money’s purchasing power due to increased money supply. Bitcoin’s inflation follows a predetermined emission schedule, halving every 4 years. Current (2024): ~<1% annually. Fiat currencies have no hard cap. See money], scarcity].
Issuance
The process of releasing new monetary units into circulation. Bitcoin’s issuance is via mining with a predetermined halving schedule. Total cap: 21M BTC. Last bitcoin mined ~2140.
K
KYC — Know Your Customer
A financial compliance procedure requiring companies to verify customer identity. Bitcoin exchanges implementing KYC permanently link identity to addresses. See privacy], buying].
L
Layer 2
Technologies built on top of the base layer to improve scalability. Operate off-chain for speed and low cost; settle to the base layer for security. Lightning Network is the prime example. See lightning-network].
Ledger
A record of identifiers, transactions, timestamps, balances, and other financial accounting data. The Bitcoin network is a unique ledger: decentralized, open, and irreversible.
Lightning Invoice
A payment request on the Lightning Network encoded in BOLT 11 format. Contains: amount (optional), recipient node public key, expiry time (usually 1 hour), optional description, sender signature. Presented as QR code or text string. Single-use and time-limited. See lightning-network].
Lightning Network
A Layer 2 payment protocol built on Bitcoin. Enables near-instant, low-fee micropayments via payment channels. Improves scalability without changing Bitcoin’s base rules. See lightning-network].
M
Mempool
Temporary storage for unconfirmed transactions. After broadcast, a transaction waits in the mempool until a miner includes it in a block. Higher fee = higher priority. Monitor fees at mempool.space.
Merkle Tree
A complete binary tree where leaf nodes contain hashes of transaction data and inner nodes contain hashes of their children. The root (Merkle root) is a single hash of all transactions in a block. Named after Ralph Merkle (1979). Enables efficient transaction verification.
Miner
A specialized network participant (computer or group of computers) that: (1) bundles pending transactions into blocks; (2) verifies blocks from other miners. Rewarded with block reward (subsidy + transaction fees). See mining].
Mining
The process of creating new blocks and adding them to the blockchain. Miners use computational power to solve Proof of Work puzzles. Functions: (1) confirm transactions; (2) secure the network; (3) issue new bitcoin. See mining], proof-of-work].
Mining difficulty
A parameter regulating how hard it is for miners to find new blocks. Recalculates every 2,016 blocks (~2 weeks) to target 10-minute block times. Increases with hash rate growth. See mining].
Mining pool
A combined mining approach where multiple miners contribute to block creation and share rewards proportionally to contributed hash rate. Reduces variance of individual miner rewards.
Mobile wallet
A smartphone app for managing Bitcoin. Convenient but less secure than hardware wallets. Best for spending amounts (Lightning or small on-chain). See lightning-tools].
Multisignature / Multisig
An address that requires multiple signatures to spend. Example: 2-of-3 multisig requires any 2 of 3 possible signers. Eliminates single point of failure. Used for joint custody, corporate structures, and enhanced security. See security], taproot].
N
Nakamoto Consensus
The protocol used in Bitcoin to achieve agreement on blockchain state without central authority. Uses Proof of Work + longest chain rule. Nodes always follow the chain with the most accumulated work. See proof-of-work].
Node
A device or program supporting the Bitcoin network by verifying and propagating transactions and blocks. Full nodes = complete, independent validation. See governance].
Node / Full node
A device or program that supports the Bitcoin network by verifying and propagating transactions and blocks. Full nodes enforce all consensus rules independently. The ultimate arbiters of Bitcoin’s rules. See governance].
Nonce — Number only used once
A random number field that miners vary when searching for a hash meeting the difficulty target. Mining = iterating through nonces until a valid hash is found. See mining].
O
Off-chain
Operations and transactions that occur outside the main blockchain, for scalability. The Lightning Network is the prime example. See lightning-network].
Orphaned block
A block not included in the main chain because the majority of miners built on a competing block. The miner receives no reward; transactions go back to the mempool.
Open source software
Freely distributed software whose code is available for review, modification, and redistribution. Bitcoin Core is open source.
P
P2P (Peer-to-Peer)
Direct communication or exchange between participants without intermediaries. Bitcoin is a P2P electronic cash system by design.
Paper wallet
An obsolete (2011-2016) method of storing Bitcoin by printing one private key and address. Has many flaws; not recommended.
PSBT (Partially Signed Bitcoin Transaction)
A standard (BIP174) for passing unsigned/partially signed transactions between wallets and signing devices. Enables hardware wallet signing workflows and multisig coordination. See security].
Premine
Creation of cryptocurrency tokens before official launch. A red flag indicating founders enrich themselves at users’ expense. Example: Ethereum had a premine. Bitcoin had no premine — Satoshi mined alongside others from day one.
Private key
A secret cryptographic key used to sign transactions and access wallet funds. Must never be shared. Loss = permanent loss of access to funds. See security].
Private/Public Key
Core cryptographic elements. Private key: secret code used to sign transactions; whoever has it controls the funds. Public key: derived from private key; used to create receiving addresses and verify signatures. Loss of private key = permanent loss of funds.
Public key
The public part of a cryptographic key pair. Used to create receiving addresses and verify transaction signatures. Derived from the private key via one-way elliptic curve function. Cannot be reversed to obtain the private key.
S
Satoshi Nakamoto
The pseudonymous creator of Bitcoin. Published the whitepaper October 31, 2008; launched the network January 3, 2009. Identity unknown. Holds ~1M BTC (never moved). See satoshi-nakamoto].
Satoshi unit
The smallest indivisible unit of bitcoin. 1 BTC = 100,000,000 satoshis. Named after Bitcoin’s creator. At 0.001.
Shitcoin
Any cryptocurrency other than Bitcoin. The 21ideas.org position: all altcoins reintroduce trusted parties, centralization, or inflation; no altcoin use case is improved by using an alternative blockchain instead of Bitcoin. See overview].
Smart contract
A programmable agreement executed automatically when conditions are met. In Bitcoin: constrained (Script language is deliberately limited). Taproot (via MAST) enables more sophisticated conditional contracts. See taproot].
Soft fork
A backward-compatible change to consensus rules. Non-upgraded nodes still accept blocks from upgraded nodes. Examples: SegWit (2017), Taproot (2021). See segwit], taproot], governance].
T
Taproot
Protocol upgrade activated November 14, 2021 (block 709,632). Introduces Schnorr signatures, MAST, and Tapscript. Improves privacy, reduces fees, enables more flexible smart contracts. See taproot].
Target difficulty
A specific number that a valid block hash must be lower than. Inversely related to difficulty: as target decreases, difficulty increases. Adjusts every 2,016 blocks. See mining].
Testnet
An alternative Bitcoin network for experiments and testing. Testnet BTC has no real value. Addresses start with m, n, 2, or tb1.
Timechain
Satoshi Nakamoto’s original term for what is now called “blockchain.” Emphasizes the temporal aspect: blocks are linked in chronological sequence with timestamps.
TXID (Transaction ID)
A unique identifier for a transaction, derived by hashing the transaction data. In SegWit transactions, the TXID excludes witness data (fixing malleability). See segwit].
Timestamp
A digital mark indicating the time of transaction or block creation. Bitcoin timestamps are used for difficulty adjustment and block ordering. See mining].
Transaction
A transfer of bitcoin between addresses in the blockchain. Contains: inputs (source UTXOs), outputs (destination addresses), and fee (miner payment). Signed with sender’s private key. See utxo].
W
Wallet
Software or hardware tool for storing, sending, and receiving Bitcoin. Types: hardware (cold), desktop (hot), mobile (hot), web (hot). The wallet manages keys; it doesn’t “hold” bitcoin — the blockchain does. See security], storage].
Address Types Quick Reference
| Type | Prefix | Era | Notes |
|---|---|---|---|
| P2PK | — | 2009 | Obsolete; pay to public key directly |
| P2PKH | 1 | 2009 | Legacy; still 43% of supply |
| P2MS | — | 2012 | Obsolete raw multisig |
| P2SH | 3 | 2012 | Script hash; used for multisig and nested SegWit |
| P2WPKH | bc1q (42 chars) | 2017 | Native SegWit single-sig |
| P2WSH | bc1q (62 chars) | 2017 | Native SegWit script/multisig |
| P2TR | bc1p | 2021 | Taproot; Schnorr; all scripts look identical |
See address-types] for full details.
Sources
Related Pages
- bitcoin] — Bitcoin fundamentals
- address-types] — full address type guide
- utxo] — UTXO model
- lightning-network] — Lightning terminology
- security] — self-custody terms
- index] — full wiki navigation