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Bitcoin Glossary: most important words to know

This quick glossary contains many of the terms used in relation to bitcoin. These terms are used throughout the whole site but also contained in books, so bookmark this for a quick reference and clarification. Some of these words are rarely used today, but if you ever encounter them, Andreas M. Antonopoulos did great work in categorizing all of them.

address (aka public key)

A bitcoin address looks like

bc1qy0tvmjy964npxjrpzumgharzh2g75u5fxl3572

You can have as many as you like, share them so people can send you coins.

bitcoin
The name of the currency unit (the coin), the network, and the software

block
A grouping of transactions, marked with a timestamp, and a fingerprint of the previous block. The block header is hashed to find a proof-of-work, thereby validating the transactions. Valid blocks are added to the main blockchain by network consensus.

blockchain
A list of validated blocks, each linking to its predecessor all the way to the genesis block.

confirmations
Once a transaction is included in a block, it has “one confirmation”. As soon as “another block is mined on the same blockchain, the transaction has two confirmations, etc. Six or more confirmations are considered final.

difficulty
A network-wide setting that controls how much computation is required to find a proof-of-work.

difficulty target
A difficulty at which all the computation in the network will find blocks approximately every 10 minutes

difficulty re-targeting
A network-wide re-calculation of the difficulty occurs once every 2106 blocks and considers the hashing power of the previous 2106 blocks.

fees
An excess amount included in each transaction as a network fee or additional reward to the miner who finds the proof-of-work for the new block. Currently 0.5 mBTC minimum.

hash
A digital fingerprint of some binary input.

genesis block
The first block in the blockchain used to initialize the crypto-currency

miner
A network node that finds valid proof-of-work for new blocks, by repeated hashing

network
A peer-to-peer network that propagates transactions and blocks to every bitcoin node on the network.

node
A full node is a program that fully validates transactions and blocks.

proof-of-work
A piece of data that requires significant computation to find. In bitcoin, miners must find a numeric solution to the SHA256 algorithm that meets a network-wide target, the difficulty target.

reward
An amount included in each new block as a reward by the network to the miner who found the proof-of-work solution. It is currently 25BTC per block.

secret key (aka private key)
The secret number that unlocks bitcoins sent to the corresponding address.

transaction
In simple terms, a transfer of bitcoins from one address to another. More precisely, a transaction is a signed data structure expressing a transfer of value. Transactions are transmitted over the bitcoin network, collected by miners, and included into blocks, made permanent on the blockchain.

wallet
Software that holds all your addresses. Use it to send bitcoin and manage your keys.”

Source

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