The Comprehensive Bitcoin Glossary



100x refers to the expected growth in a coin. It also refers to the amount of leverage used in a margin trade and is either a sign of willingness to take risks or of extreme confidence.



Number 21 is symbolic because the number of bitcoins that can ever exist is 21 million.


51% Attack

Bitcoin miners could come together in a proof of work blockchains and attack the chain. The attacks would not be to steal bitcoins but will allow them to reverse any recent transactions and also block some specific or general transactions. A 51% attack that goes down successfully could cause a halt in the system.



An address is the SHA-256 hash of a public key that has the prefix 1, 3, or bc1. It is necessary to get the recipient’s address if you want to send money to someone and it can be encoded with either base58 or bech32.


Airdrop is the process of giving new Altcoins to existing bitcoin holders. Its users require the users to enter their private keys into the altcoin client and as it is a dangerous move, the user will need to move all their bitcoin first before claiming their airdrop.


Altcoin refers to any cryptocurrency that is not bitcoin and is synonymous with shitcoin. It is a derogatory term.


ASIC is an acronym that stands for Application-Specific Integrated Circuit and they are specialized chips that can be used in bitcoin mining as they can perform the SHA-256 function.

Atomic Swap

If you swap a bitcoin for an altcoin without the use of escrow, the process is called an atomic swap. An atomic swap is made under the condition of another transaction and cryptography ensures it is completed so that no party cheats. This is a good example of a smart contract.



Base58 is used to shorten large numbers and makes it easier to parse than binary numbers or base10. Base58 is the scheme for encoding that is used for bitcoin addresses that start with 1 or 3. It includes all number from 1 to 9 and also all uppercase characters except I & O, and all lower case characters except for l.


Bitcoin transactions usually contain one destination output and one change output. If multiple transactions are to be made, batching takes place. Batching is a single transaction with multiple outputs as opposed to having multiple transactions each with one output. This act saves blockspace and fees.


A bear is someone who doesn’t believe good things can come from using bitcoin. He is pessimistic about it.


A bearwhale is a heavy bitcoin trader who is selling a large number of coins because of pessimism.


Bech32 is an encoding scheme that provides more secure addresses, especially in multi-signature schemes. It is new and the addresses from this scheme begin with ‘bc1’ and are longer than addresses of base58.


BIP is an acronym that stands for Bitcoin Improvement Proposal. It is an accepted procedure that is used to propose that changes and additions be made to the bitcoin code. Not all BIPs are relevant to the Nakamoto consensus as some are to govern procedures, standards, and also best practices.

Bitcoin ATM

A bitcoin ATM sells bitcoin in exchange for paper currency, and some also dispense paper money.

Bitcoin Cash

Bitcoin enthusiasts changed the consensus rule of bitcoin in august 2017 and the rule affected was particularly that governing block size. Only a few miners and participants joined their cause and so the network permanently forked. Those who had bitcoin before the fork received an amount of equal value in bitcoin cash known as airdrop and it can be used to trade on other exchanges.

Bitcoin Core

This is the most popular bitcoin client


Pronounced Bitcoin cute, it is the graphical interphase of the bitcoin core, which is the most popular bitcoin client. It takes its name from the QT widget toolkit on which it is built.


Bitcoind is the shortened form of Bitcoin Daemon and it is the command-line version of Bitcoin Core.


A Bitcoiner is a person who uses Bitcoin. Uses of Bitcoin involve transactions, verifying, savings, and mining.


A block is made of transactions. Each block is referenced to the one before it and thus a long chain is formed that leads back to the genesis block. In a block, the first transaction currently creates 12.5 bitcoin and that is the block reward. Miners find an average of one block in ten minutes and the block is then sent across the network where it gets accepted by nodes as long as it is in accordance with the consensus rules.

Block Reward

When a miner finds a block, they are allowed to create bitcoin out of nowhere and the number of bitcoins they are allowed to create is dependent on bitcoin’s consensus rules. The bitcoin they create after finding a block is called a block reward.

Block Size

Block size is the size of a block that is allowed per blockchain. From 2010, it has been set at 1MB. You can use the SegWit softfork to allow signature data outside the block and have a block size that is a few times larger than 1MB.


Since each new block always references the previous block, it creates a chain and this chain is referred to as a blockchain.


A blockexplorer is a tool or website that allows navigation through the data stored on a blockchain. It includes checking addresses and the balances of each, pending transactions, confirmed transactions, and also the metadata such as OP_Return.


Since bitcoin blocks are found limited in size, there is always an available space left. This available space is called Blockspace. It attracts fees and the process in which bitcoin miners select transactions to be included in a block is called fee market.


The entire network gets to see when a transaction is being signed or when a block is being mined and the data is being shown as a broadcast. It only takes a few seconds for everyone to get the message.


BTC is most commonly used to refer to bitcoin. While most exchanges make use of BTC, others make use of XBT.


BTM is a shortened version of Bitcoin ATM


A bull is someone who is optimistic about bitcoin.



Capacity is usually measured in transactions per second and it varies by network depending on the types of transactions involved. It is usually between 3 and 5 transactions per second depending on the types of transactions we assume are being used.

Chain Split

This is also known as a fork. It occurs when the participants of a network no longer agree on the state of the network. It could be as a result of a bug, mistake, or deliberately. An example of actions that lead to a network fork is the widening of rules like increasing block size or number of bitcoins that exist at a time.


Every new bitcoin transaction is in reference to a previous transaction and it results in all bitcoin being accounted for on the blockchain. It is not common however for previous inputs to match the amount of bitcoin you want to send, so you end up grouping inputs together and then the remaining bitcoin is sent back to you as change.

Civil War

In 2017, the bitcoin civil war was over the question of an increase in block size. It was resolved with the creation of bitcoin cash and SegWit was activated on the bitcoin chain.


A bitcoin client can be a full node, a specialized software, or an SPV node and it interacts with the network.


For transactions that contain block rewards, there is no input. It contains arbitrary data instead like a number or message and it is used as its coinbase.


Coinjoin is a technique that mixes multiple transactions so as to obfuscate which inputs belong to which outputs.

Cold Storage

Cold storage of bitcoins are devices on which bitcoin is stored. These devices have never been used to access the internet and it could be a USB stick or a computer.

Colored Coin

A colored coin is a transaction that has been given a special meaning like representing a deed. This deed can move around like a regular bitcoin but being colored, you will not spend it or mix it accidentally with your regular bitcoin.


When a miner adds a transaction in a block, it is said to have one confirmation. New blocks that are found add more confirmations and when the transactions are sufficiently confirmed, it is considered final. Because attacks are possible and can happen at any time, a transaction that has only one or two confirmations can be reversed. A transaction is considered irreversible if the confirmations it gets are more than six although the size of the transaction could make it unviable to double spend it earlier. Unconfirmed transactions are not secure.


A cryptocurrency is a money that is under the security of cryptography on a public blockchain.


Cryptography involves hiding information, security, and keeping communications authentic.


Cyberpunk is a feature in the art and literary genre in which advanced tech is attributed to a dystopian society of high level of poverty. Bitcoin is often spoken of as such because of its anarchist nature.


Cypherpunk aims to use technology, particularly cryptography to empower individuals.


Dark Wallet

Dark Wallet is an experimental bitcoin wallet that makes use of stealth payments and coinjoin to make anonymous transactions possible.

Days Destroyed

Days destroyed is a measurement of suddenly spent coins that have been stored for a long time in the bitcoin wallet. For example, 100 bitcoin that is spent after being stored for a year is measured as 36,500 (365 x 100) days destroyed. It could result in a sudden spike and it is an indication of a bearwhale selling off their coins.


On average, new blocks are supposed to be found every 10 minutes by miners, but as new miners join, blocks get found faster. The difficulty is adjusted in roughly 2 weeks (every 2016 blocks found) so that the creation of new bitcoins can be slowed down. When miners put their machines off, the difficulty decreases.

Double Spend

Spending a bitcoin twice in a blockchain is a problem that has been solved by the Nakamoto consensus. After an amount of time has passed and the transaction has been confirmed, the bitcoin can’t be spent again. In the case of a double spend, a user who wants to defraud another participant will send a coin and after one or two confirmations will attack the blockchain by mining a similar but contradicting block as the one involved in the transaction.



ECDSA stands for Elliptic Curve Digital Signature Algorithm and it is used to generate private and public key pairs, and also to verify their signatures. No one knows for sure why this algorithm was chosen by Satoshi as it wasn’t known at the time bitcoin was released.


Escrow is a contract between two partners and a third party whose job is to intervene in the contract if one of the party calls. An example of a situation where the third party broker would be called is if something goes wrong in the contract. Traditional funds are more expensive to escrow as compared to bitcoin in which case bitcoin can cheaply be escrowed using a 2-of-3 multi-signature wallet. If the contract gets completed, the two parties involved can move their funds without the intervention of escrow unlike the case with traditional funds where the third party broker always has to intervene. Another advantage of escrow with bitcoin is that the broker doesn’t have full control of the funds involved. The only way the third party can steal funds involved is by partnering with one of the parties involved in the transaction.


An exchange is a platform for the trading of local currency or other forms of a token with bitcoin. Exchanges usually specialize in OTC, fiat, or in tokens.


A blockexplorer is a tool or website that allows navigation through the data stored on a blockchain. It includes checking addresses and the balances of each, pending transactions, confirmed transactions, and also the metadata such as OP_Return.



The blockspace that is available is limited and for this reason, a transaction has to pay a sum to be included in a block and that sum is a fee. In ideal situations, the fee is discovered in a function fee market. Fees will soon be the main reason for miners to keep mining as the block reward is gradually going to zero.

Fee Market

A market that functions properly is ideally supposed to determine the cost of fees. In times of congestion, the fees will be higher before the transaction is confirmed and paying a lower fee at that time will keep the transaction in mempool until the congestion gets low. RBF is important in the fee market.


Fiat is money or currency that is issued by the government and generally accepted in a place.

Flood Attack

A flood attack is similar to a DDoS attack and what it does is to flood the mempool with transactions. In a properly functioning fee market, flood attacks increase transaction fees and limit the capacity of the network. 


A fork occurs when the participants of a network do not agree to the state of the network. It could be a result of a bug, a deliberate act or a mistake. An example of a situation that leads to forking is the widening of rules like increasing the block size of the number of bitcoin that exist at a time.


Genesis Block

A genesis block is the first block in the blockchain and all blockchains have it. Bitcoins in the genesis block cannot be spent.



At every 210,000 blocks, the block reward gotten by miners gets halved. In 2009 the block reward was at 50 bitcoin per block and after two halvings it stands at 12.5 bitcoin. It will continue to decline until it gets to zero, specifically after 33 halvings.


A hardfork is any change that widens the already existing ruleset. It allows something that was previously prohibited and if all participants do not upgrade their software, the change in rules will lead to a fork.

Hardware Wallet

A hardware wallet is a chip that stores your private key in a secure enclave. It is only called a hardware wallet if the keys cannot be extracted.


A hash is from a hash function. Bitcoin addresses are gotten by applying the SHA-256 function twice to its public key. In the mining of bitcoin, the hash function is also used to let a computer prove that a certain amount of electricity was used in bitcoin’s proof of work algorithm.

Hash Function

A hash function is cryptographic and it is a one-way function that compresses data into numbers. The number is known as hash and it can be likened to a fingerprint for any data. A hash function is said to be secure if its output is unpredictable and if no two known strings compute the same hash.

Hash Rate

The has rate is the number of hashes that a bitcoin miner can perform at a given time.


Every block has a header of 80bits in length. It is made up of version number, the hash of the previous block, the Merkle root of every transaction, the nonce, and the difficulty target.


Every block has a height and it corresponds to its sequence in the blockchain beginning from block 0 on 3rd January 2009.


This represents saving your coin and having a long term plan instead of spending your coins as they come. It is often criticized by some as it leads to hoarding but many bitcoin owners prefer to save and have long term plans for their money.

Hot Wallet

A hot wallet is the opposite of a cold wallet. It describes a wallet that holds bitcoins and is connected to the internet.


Input and Output

In a bitcoin transaction, one or more inputs are always referenced as the source of the funds, and two or more outputs are also included. An output that doesn’t show a payee is termed a change output. Since a coinbase transaction creates bitcoin from nowhere, it doesn’t have any input and is the only exception to this.



A bitcoin ledger is another name for the bitcoin blockchain. What it does in the general sense is to record all transactions and every asset. In the lightning network, each participant owns a ledger but in the bitcoin network, every participant share one ledger.

Lightning Network

The lightning network can be described as one which sits on top of bitcoin. Those who wish to connect to the lightning network can deposit bitcoin into specialized smart contracts. This allows infinite transactions to be made among participants at very low fees and no bitcoin capacity constraints limiting them.

Lock Time

Lock time is a feature of smart contracts that are used in the lightning network. it is a concept of locktime-verify or CLTV and it creates a transaction that can be redeemed only after an amount of time has elapsed.



Mainnet is the name for the live bitcoin network and is the opposite of the Testnet.


Malleability exists due to a bug in bitcoin transactions. This bug allows you to change the transaction ID before the transaction is mined thus making it difficult to add unconfirmed transactions to the chain. SegWit was used to fix this.

Margin Call

If you are trading bitcoin with leverage, your position is only secured up to the point where your loss reaches your collateral. If that happens, you are described as ‘margin called’ and your collateral is sold.


A maximalist is someone who only makes use of bitcoin and believes bitcoin is the only cryptocurrency worth spending effort on. A maximalist’s belief often comes also with the belief that strong network effects will lead to the complete dominance of one cryptocurrency in global payments.


The mempool is a list of unconfirmed transactions maintained by the client. A transaction leaves this list if it gets confirmed, or if the client deems it to be too old.

Merged Mining

In merged mining, work done for another blockchain is accepted by a different blockchain as valid work. This means that a miner can mine on more than one blockchain at a time.

Merkle Root

The single hash that is present at the top or bottom of a Merkle tree is the Merkle root. The Merkle root is important in the change of values in the Merkle tree and it is included in the block header too.

Merkle Tree

A Merkle tree contains all transaction IDs in a block either at the top or bottom of the tree. At every level, IDs are hashed together into the subsequent layer until one layer which is the root remains at the top or bottom.


A small payment is regarded as a micropayment. Payments below 1 Satoshi are micropayments and the lightning network allows it.


A bitcoin miner could be a person who operates a machine connected to the bitcoin network, or the machine itself. This machine performs endless hashes called proof of work.

Mnemonic Phrase

Also known as seed phrase, the mnemonic phrase is used to generate an infinite number of random addresses instead of backing up each private key in a bitcoin wallet. You need the phrase to back them up and it only needs to be performed once.


It is used as a reference to the movement of bitcoin in the upward direction.


MtGox is a cryptocurrency exchange that made up the global bitcoin trading volume at a certain time. It was defaulted after admitting to losing most of their customers’ money.


Multisig is the shortened form of multisignature and it is a type of bitcoin address that allows more than one party to control funds collectively. A 2-of-2 multisig, for instance, is made of two parties and both are needed to sign off on every transaction. It is common in the lightning network and 2-of-3 multisig addresses are mostly used for escrow or in the cold storage of bitcoin.


Nakamoto Consensus

This is the innovation of bitcoin and it lies in the proof of work. It is named after the inventor of bitcoin; Satoshi Nakamoto.


Namecoin is another cryptocurrency and was envisioned by Satoshi Nakamoto. The aim of this cryptocurrency was to have a blockchain that would store name registrations in formats like usernames or URLs.


The bitcoin network is made of nodes. The nodes could be for mining or verifying.


A nocoiner is a term used to describe someone who doesn’t own any cryptocurrency. It is derogatory.


A node is a computer that is running a bitcoin client and verifies the integrity of a blockchain, and also passes on new transactions and blocks to its peers. By default, your bitcoin node will automatically connect to 8 other nodes and you can allow it to accept more incoming connections if you want. The network doesn’t depend on any specific nodes so peers can communicate with each other without any hindrance.


The nonce forms part of the block header and the miner chooses the nonce with the aim of finding a bitcoin block that hashes to a value with a number of leading zeroes. The number of zeroes contained depends on the difficulty.

Notary Service

A bitcoin notary service shows that a piece of data exists before a certain time. Including a block hash allows you to prove the existence of the piece if data after a certain time and allows you to determine with almost complete accuracy the time it was created. This service does not, however, prove that the piece of data is authentic, it only proves that it exists.


One-Way ATM

A one-way ATM is used to buy bitcoin using cash or a card. It is one way because it doesn’t dispense cash.

OP Code

OP code (operation code) is used to describe the scripting language of bitcoin. About 200 OP codes exist but many have been disabled because they are a potential risk, or because they do not have a particular use.


The OP_Return is a code that makes an output invalid. It is not useless though as it can be embedded in arbitrary data on the bitcoin blockchain and used in other tools like notary services.


When say two bitcoin blocks are found at the same time, both cannot be valid and so the invalid one is said to be orphaned since no further blocks are built on it. In some cases, the chain can fork temporarily due to maybe a bug or malice. If that happens, there will exist two permanent chains or an orphaned chain.



P2P stands for peer to peer and it is an electronic cash system that is the bitcoin whitepaper title. It means there is no central architecture and anybody who wishes to can join the network and communicate directly with other participants.


This was a type of mining pool in which miners were paid according to their work, and it lowered the barrier to becoming a miner by distributing the chances of finding a new block to a number of users. This guaranteed a stable flow of income.


P2SH stands for pay to a script hash. It is an alternative way of sending bitcoin to a script instead of a public key. In order to redeem the bitcoins, the owner has to reveal their script which must successfully execute. With this smart contract, can be created in bitcoin. Addresses using P2SH begin with the number 3 instead of number 1 for regular addresses.

Paper Wallet

A paper wallet is just a paper that contains either the seed to a wallet or a raw private key. It is a form of cold storage and can also serve as a backup to a wallet.


Peer to peer is an electronic cash system that is the bitcoin whitepaper title. It means there is no central architecture and anybody who wishes to can join the network and communicate directly with other participants.


A pending transaction has been broadcast to a network but isn’t in the block yet. You can find these types in the mempool.

Pizza Day

Pizza day marks the date bitcoin was first used to pay for goods. It was on May 22, 2010, in which a developer named Laszlo Hanyecz paid for two pizzas with a total of 10,000 bitcoin.

Point Of Sale

As it relates to bitcoin, this could be a plugin, a webapp, a phone app, or an integration to a PoS device and it represents a device where sales take place.


A mining pool creates a platform for miners to come together ad find a solution to a valid block together. The solutions are pooled and everyone gets paid in their own proportion.


This could refer to proof of stake or point of sale.


This is an acronym for proof of work.


PPS is an acronym that stands for pay per share. It is commonly used to determine the amount a miner gets paid. This implies that a miner receives payment of a fixed sum irrespective of whether a block is found by the pool or not. The pool may get lucky if a block is found and keep the profits, or get unlucky and go bankrupt after making payments.

Private Key

A bitcoin private key is a number of 256-bit lengths. The public key is derived from the private key using the ECDSA algorithm. To get its address, the public key is hashed twice with SHA-256, encoded using base58, and the prefixed with number 1. The encoding for different address formats of various public and private keys is different and depends on the format.

Proof of Burn

Proof of burn is used by some cryptocurrencies to allocate the shares in their PoS chains. Users who wish to get a share here would have to destroy their bitcoin.

Proof of Stake

In proof of stake, miners produce blocks that are valid by voting with their coins on a valid chain.

Proof of Work

Proof of work is bitcoin’s consensus algorithm and it is also referred to as Nakamoto consensus. Miners look for a valid block according to the difficulty target by destroying electricity. They do this by hashing the header with different nonces. Finding a new block is more likely when a good amount of electricity has been destroyed and they get rewarded for their efforts with newly minted bitcoin. This is called a coinbase transaction.


A bitcoin protocol rules that make a transaction block valid, and it governs how nodes communicate with each other. Some parts of a protocol can be changed easily, while some need a consensus before any change is made so as not to fork the chain. There is not formally written rule for a bitcoin protocol as it is part of the code.

Public Key

A public key is derived from a private key. It is a point on an ECDSA curve with its x and y coordinates being 256 bits long. So all together the public key is 12 bits long.



RBF stands for replace by fee. It is a standard that allows someone to increase their transaction fee so as to replace their transaction in the mempool. People can set low fees for low priority transactions and then increase it later if the transaction becomes a high priority, or if the fee remains high.


Rekt is a variant of wrecked and it explains an even in which you lose everything while trading cryptocurrency.



This is the smallest unit of bitcoin and it is named after the creator of bitcoin. 1 Satoshi is equivalent to 1/100 million bitcoin and through second layers, the units can be divided further into milli-satoshis.

Satoshi Nakamoto

The name Satoshi Nakamoto was used by the creator of bitcoin to communicate with collaborators and to publish the bitcoin whitepaper.


Bitcoin has its own unique scripting language and it also allows transactions to include scripts so that smart contracts can be created. You can also send bitcoin to a script hash instead of a public key.

Scripting Language

With the bitcoin scripting language, complex rules for the redemption of an input can be created. The number of OP codes is limited to ensure security and so there are no loops and the language is not Turing complete.

Second Layer

Second layer networks make use of bitcoins blockchain anchor important information or smart contracts. These networks include notary services and lightning network and they are important for scaling bitcoin to a large number of users.

Seed Phrase

Also known as seed phrase, the mnemonic phrase is used to generate an infinite number of random addresses instead of backing up each private key in a bitcoin wallet. You need the phrase to back them up and it only needs to be performed once.


SegWit fixes the problem of the malleability of legacy bitcoin transactions. It was implemented as a softfork but became a controversial issue that led to bitcoin cashfork due to its combination with lack of block size.


SHA-2 is a family of hashtags functions and it encompasses other functions like SHA-256, SHA-384, and SHA-512.


SHA-256 is part of the SHA-2 family and is used in bitcoin for address creation and in mining.


Also known as an altcoin.


A signature in cryptography allows the owner of a private key to prove ownership of the key without showing it. It is used to prove that you own your coins.

Silk Road

Silk Road was a popular market place between 2011 and 2013 to trade drugs and other contraband. It played an important role in helping bitcoin gain popularity as it demonstrated utility and resilience.

Smart Contract

A smart contract in the real sense is not a contract and neither is it smart. A smart contract is a computer program that is executed by a network and is considered incorruptible. This is because its rules are transparent and it cannot b cheated or altered.


When a rule changes and causes a network to have tighter rules, it is termed a softfork. New blocks created under this new ruleset are also accepted by nodes that follow the old ruleset, but with the change in the ruleset, not all blocks created in the old ruleset will be valid. A softfork doesn’t cause a permanent fork unlike a hardfork if more than 50% hash power enforces it.

Solo Mining

In solo mining, an entity attempts to mine its own blocks as it is not part of a pool. Solo mining is difficult and also rare because of the enormous hash power bitcoin has, and also the luck that is needed to even find valid blocks.

Spam Attack

If you create a large number of transactions to yourself and fill up a block, you are spamming the network. This will lead to an increase in fees and value of bitcoin while its capacity decreases. The block size limit curbs the effect of such a spam attack on nodes and to guarantee the continuous functioning of a network even in such situations. Since miners earn the transaction fees, such an attack will be cheap for them to carry out as they stand to benefit from it.

Spent Output

Every bitcoin transaction has an input that leads to the source and also at least one output. If an output acts as a source for another transaction, it is considered spent. The sum of unspent outputs whose private keys you own gives you your bitcoin balance.


SPV stands for simplified payment verification and it is meant to allow nodes alert each about invalid blocks in the network without having to verify the whole block. SPV has b=not yet been implemented and may not even be possible.

SPV Wallet

Some wallets come as SPV wallets and what they do is rather than validate the entire blockchain, they rely on nodes to calculate the balance. Be careful because the nodes could give inaccurate statements and lie about the validity of transactions to the SPV wallet.

Stealth Payments

Two parties can make payments to each other without having to directly exchange bitcoin addresses as there could be an interception. Instead, a key is used to negotiate and this is called a stealth payment.



A target is a number that is a representation of the present difficulty. In order to have a valid block, the hash of its header must be less than the target.


A testnet is the replica of a bitcoin’s code and its network. The coins from testnet are of no value and are used to test applications.


These are symbols that are used in the stock markets to identify currencies and companies. Bitcoin is identified with the BTC symbol and also XBT.


A document can be timestamped if its hash is embedded into the bitcoin blockchain. This can be done with the use of OP_Return.


A token is the representation of a right. Bitcoin is also a token as it gives you the right to do a transaction on the bitcoin blockchain. Tokens are usually meant to be representations of deeds, contracts, or physical possessions.


TPS stands for transactions per second. Get more information on this from Capacity.


A bitcoin transaction can be likened to a signed message. It contains at least one input and one output and is created by the bitcoin wallet after which it oases to the nodes. Transactions from the nodes are kept in the mempool until a miner includes it into a block, then it is considered confirmed.

Transaction ID

Every transaction, as a matter of fact, has an ID. Legacy transactions have malleable IDs because of a bug that is allowed into the system, whereas SegWit transactions make use of deterministic transaction IDs.

Turing Complete

In the general sense of the term, a computer is described as Turing complete if it can simulate another computer. What this implies is that the computer can calculate any arbitrary computable function. Bitcoin’s scripting language has limited functionality and so it is not Turing complete. The limitation of its scripting language is on purpose because securing a machine that has limited functionality is manageable.

Two-Way ATM

A two-way ATM, unlike a one-way ATM, can exchange cash with bitcoin and dispense the cash.


This is another way of writing a transaction ID.


Unspent Output

This is the opposite of the spent output.


Vanity Address

A vanity address is a bitcoin address that only consists of certain characters or spells out a word. These addresses can be made by creating private keys and deriving the addresses from the keys. The derived addresses are compared against the desired outcome and the duration of creating the vanity address depends on how long it is supposed to be.


This is a measurement that is like weight. 1 Vbyte = 4 weight units



A wallet is anything that holds your bitcoin. It could be software, paper, or even hardware. Wallets either contain the private keys or derive more than one private key. Watch only wallets only contain public keys and can be used to check balance and create unsigned transactions.


It is not necessary to calculate the size of SegWit transactions as they are split between the transaction and the signature. A unit of weight is equivalent to 1/4,000,000 the max size of the block. An alternative form of weight is vbytes.


A whale is someone who trades with a large amount of bitcoin.


The whitepaper outlines the functionality of bitcoin in its eight pages and was released on 31 October 2008 by Satoshi Nakamoto.



This is an alternative form of BTC and is in compliance with ISO 4217 which requests that all non-government issues currencies begin with X.



Zero-knowledge is a type of cryptographic scheme that shows the existence of a solution to a puzzle without revealing any information about the puzzle. It can take different forms like proving that the sum of inputs and outputs in a transaction are equal to each other but without revealing the sum.


In the world today where bitcoin is becoming a very valuable means of exchange for goods or services, it is necessary that all registers involved in dealing with this cryptocurrency are understood. Bitcoin has a lot of advantages over regular money and one very important advantage is the anonymity and security it gives. With this comprehensive glossary, all matters concerning bitcoin transactions can now be understood more clearly as you make up your mind to step up your privacy and security through dealing with cryptocurrency.