The core idea
Bitcoin terminology can be confusing because wallets, exchanges and the protocol use related words differently. This glossary focuses on operational terms a reader should understand before receiving, storing or sending funds.
- Address — an encoded payment instruction used to receive bitcoin.
- Block — a verified batch of transactions connected to the previous block.
- Confirmation — a block containing a transaction, plus additional blocks built after it.
- Private key — secret data used to authorize spending.
- Seed phrase — a human-readable recovery backup for many wallet keys.
- Satoshi — the smallest native Bitcoin unit; 100 million satoshis equal one bitcoin.
How it works in practice
Use the definitions as a map, then read the dedicated guides for context. Terms such as wallet, address and balance are convenient interfaces over a transaction-output model, while custody and recovery describe who can actually authorize spending after a device is lost.
Practical checklist
- Verify unfamiliar terms in primary documentation.
- Do not confuse a public address with a private key.
- Ask whether “wallet” means self-custody software or a custodial account.
- Check whether “fee” means network fee, trading fee, spread or withdrawal fee.
- Treat “APY,” “yield” and “guarantee” as risk questions, not just definitions.
Limits and risks
Definitions can simplify away important details. For example, a confirmation is not absolute finality, and a wallet may not control keys. Products also reuse technical words for marketing. Always connect the term to the specific network, service and legal relationship involved.
Sources and further reading
Use primary documentation where possible and compare claims across independent sources.
Frequently asked questions
What is a satoshi?
It is the smallest native unit recorded by Bitcoin. One bitcoin equals 100 million satoshis.
What is the difference between a key and an address?
A private key authorizes spending; an address is derived payment information used to receive funds.
What is a node?
A node is software that communicates with peers and can independently verify transactions and blocks according to its rules.