The Kingdom Bitcoin Glossary

The Kingdom Bitcoin Glossary is a plain-English reference that helps individuals and families understand Bitcoin, money, and modern finance by clearly defining key terms.

12-/20-/24-Word Backups – Human-readable word lists used to back up a wallet’s private keys. Anyone with access to these words can control the funds, making secure storage essential. Example: Writing these words on paper and storing them safely allows you to recover your wallet if your device is lost or broken.

1040 Schedule D Form – An IRS tax form used to report profits and losses from selling capital assets like stocks, real estate, or bitcoin. The totals flow into your main tax return to determine how much tax you owe. Example: If you sell bitcoin at a profit during the year, that gain is reported on Schedule D.

1099-B Form – A tax document issued by brokers that summarizes sales of financial assets, including proceeds, cost basis, and gains or losses. It helps both taxpayers and the IRS track taxable trading activity. Example: A brokerage sends you a 1099-B showing your stock and bitcoin trades for the year.

1099-K Form – A tax form issued by payment processors that reports the total value of transactions processed once certain volume thresholds are met. It reflects gross activity, not profit. Example: A payment app may issue a 1099-K even if much of the money you received was not income.

1099-MISC Form – An IRS form used to report miscellaneous income paid to individuals who are not employees. This includes things like prizes, rents, or contractor payments. Example: If you are paid as an independent contractor, you may receive a 1099-MISC.

1099-R Form – A tax form that reports distributions taken from retirement accounts such as IRAs, pensions, or annuities. It helps determine whether withdrawals are taxable. Example: Taking money out of a 401(k) before retirement triggers a 1099-R.

21 Million – The fixed maximum number of bitcoin that will ever exist. This hard cap is enforced by Bitcoin’s code and is central to its scarcity. Example: Unlike dollars, bitcoin cannot be printed beyond its 21 million limit.

401(k) Account – An employer-sponsored retirement account that allows workers to save and invest a portion of their income, often with tax advantages and employer matching. Example: Contributions are automatically deducted from your paycheck and invested for retirement.

51% Attack – A theoretical scenario where one entity controls most of a blockchain’s mining power and can temporarily manipulate transaction ordering. While disruptive, it cannot rewrite Bitcoin’s core rules or create new coins. Example: An attacker could delay transactions but still cannot steal others’ bitcoin.

8949 Form – An IRS form used to list individual asset sales, including dates, prices, and gains or losses. It feeds into Schedule D for overall tax reporting. Example: Each bitcoin trade is listed line by line on Form 8949.

Abenomics – An economic strategy introduced in Japan focused on aggressive monetary easing, government spending, and structural reform. It aimed to combat deflation and stimulate long-term growth. Example: Japan used large-scale money creation to try to revive economic activity.

Account Beneficiary – A person or entity designated to receive account assets upon the owner’s death. Naming beneficiaries often allows assets to bypass probate. Example: Listing a beneficiary on an investment account speeds up inheritance.

Adaptor Signature – A cryptographic technique that allows signatures to be completed only when certain conditions are met. It enables advanced payment logic in systems like the Lightning Network. Example: A payment only completes once a specific cryptographic condition is satisfied.

Address – A string of characters used to receive bitcoin. It represents a destination on the network derived from cryptographic keys. Example: You share a Bitcoin address so someone can send you funds.

Address Reuse – Using the same Bitcoin address more than once to receive funds. Address reuse reduces privacy by making it easier to link transactions together. Example: Reusing one address lets others see all payments tied to it.

Agency Model – A business structure where a firm executes trades on behalf of clients rather than trading against them. This reduces conflicts of interest. Example: A broker places trades for clients instead of betting against them.

Air Gap – A security method where a device is kept completely offline to prevent remote access. It is commonly used to protect private keys. Example: A hardware wallet never connected to the internet is air-gapped.

Algorithmic Trading – The use of software to automatically execute trades based on predefined rules. These systems react to market conditions faster than humans. Example: A program buys or sells automatically when prices hit certain levels.

All-Time High (ATH) – The highest price an asset has ever reached in its trading history. It serves as a psychological and historical reference point. Example: Bitcoin reaching a new ATH often attracts attention and speculation.

Allocation – The way capital is distributed across different assets within a portfolio. Allocation decisions shape risk and long-term outcomes. Example: Holding stocks, bonds, and bitcoin in different proportions.

Alpha – A measure of investment performance that reflects returns beyond a benchmark. Positive alpha suggests skill rather than luck. Example: Beating the market index is considered generating alpha.

Annual Percentage Rate (APR) – The stated yearly interest rate on a loan or investment without accounting for compounding. It shows the base cost or yield. Example: A credit card advertises a 20% APR.

Annual Percentage Yield (APY) – The effective annual return that includes compounding. APY reflects what you actually earn over time. Example: A savings account with daily compounding shows a higher APY than APR.

Annuity – A financial product that provides a steady stream of payments, often used in retirement planning. Payments are typically backed by insurance contracts. Example: Retirees receive monthly income from an annuity.

Anonymity – The condition of being unidentified. In financial systems, it refers to transactions that cannot be easily linked to real-world identities. Example: Cash transactions offer more anonymity than bank transfers.

Anti-Money Laundering (AML) – Laws and procedures designed to prevent illicit funds from entering the financial system. AML rules require monitoring, reporting, and identity verification. Example: Banks flag large or suspicious transactions under AML rules.

Application-Specific Integrated Circuit (ASIC) – A computer chip built for a single task. In Bitcoin mining, ASICs perform hashing far more efficiently than general-purpose computers. Example: Modern miners use ASICs instead of laptops.

Arbitrage – A strategy that profits from price differences for the same asset across markets. It helps align prices and improve market efficiency. Example: Buying bitcoin cheaper on one exchange and selling it higher on another.

Ask – The lowest price a seller is willing to accept for an asset. It represents available supply in a market. Example: The ask price shows what sellers are currently offering.

Assets Under Management (AUM) – The total value of assets managed by a financial institution on behalf of clients. It reflects scale and responsibility, not ownership. Example: A fund managing $10 billion reports that amount as AUM.

Assume Valid – A Bitcoin node feature that speeds up initial synchronization by trusting certain historical blocks. It improves efficiency without changing consensus rules. Example: A new node syncs faster by skipping old block checks.

AssumeUTXO – A proposed Bitcoin upgrade that allows nodes to start faster by assuming a known-good snapshot of unspent outputs. It reduces setup time while preserving security assumptions. Example: Running a node becomes easier for new users.

Asynchronous Payments – Payments that do not require both parties to be online simultaneously. On-chain Bitcoin transactions are asynchronous by design. Example: You can receive bitcoin even if your wallet is offline.

Atomic Multi-Path Payments (AMP) – A Lightning feature that splits a payment across multiple paths while ensuring it completes only if all parts succeed. This improves reliability for larger payments. Example: A large Lightning payment routes through several channels at once.

Auditability – The ability for anyone to independently verify Bitcoin’s rules, transactions, and total supply. This transparency removes the need to trust institutions or intermediaries. Example: Anyone can verify that only 21 million bitcoin can ever exist.

Austrian Economics – A school of economic thought that emphasizes free markets, individual choice, sound money, and limited government intervention. It is influential in Bitcoin thinking because of its focus on scarcity and market-driven value. Example: Austrian economics favors money that cannot be easily inflated.

Authentication (2FA with hardware) – A security method that requires physical confirmation on a hardware device in addition to a password. This protects accounts even if login credentials are compromised. Example: You must press a button on a device to approve a login.

Automated Clearing House (ACH) – A U.S. banking network used to move money electronically between accounts, commonly for payroll, bill payments, and direct deposits. Transfers are inexpensive but slower than wires. Example: Your paycheck arrives via ACH transfer.

Average Cost Basis – A method of calculating an asset’s cost by averaging the purchase prices of all units owned. It is commonly used for tax reporting. Example: Buying bitcoin at different prices results in one averaged cost basis.

Backwardation – A market condition where futures prices trade below the current spot price. It often signals strong immediate demand for the asset. Example: Traders may pay more for bitcoin today than for a futures contract months out.

Backwards Compatibility – The ability of newer software or protocol updates to work with older versions without breaking existing rules. This is critical for maintaining network stability. Example: Older Bitcoin nodes can still function even after upgrades.

Balance Sheet – A financial statement showing assets, liabilities, and equity at a specific moment in time. It provides a snapshot of financial health. Example: A company’s balance sheet shows what it owns versus what it owes.

Bank of Canada – Canada’s central bank, responsible for issuing currency and managing monetary policy. Its mandate includes price stability and financial system resilience. Example: The Bank of Canada adjusts interest rates to influence inflation.

Bank of England – The United Kingdom’s central bank, responsible for monetary policy, currency issuance, and maintaining financial stability. Example: The Bank of England raises or lowers rates to manage the economy.

Bank of Japan (BOJ) – Japan’s central bank, known for aggressive monetary policy aimed at combating deflation and supporting economic growth. Example: The BOJ has kept interest rates extremely low for decades.

Bank Run – A situation where many depositors withdraw funds simultaneously due to fear of insolvency. Bank runs can cause otherwise solvent banks to fail. Example: Customers rush to withdraw cash after hearing a bank may collapse.

Bank Secrecy Act (BSA) – A U.S. law requiring financial institutions to record and report certain transactions to help detect money laundering and financial crime. Example: Banks must report large cash deposits under the BSA.

Bank Wire – A direct electronic transfer of funds between banks. Wires are fast and final but usually carry higher fees. Example: Buying a house often requires a same-day bank wire.

Banking Desert – An area with little or no access to traditional banking services. These regions often rely on alternative financial tools. Example: Rural towns may lack nearby bank branches.

Bankruptcy – A legal process that provides relief to individuals or businesses unable to repay debts. It may involve restructuring obligations or liquidating assets. Example: A company files bankruptcy to reorganize unpaid debts.

Base58 – A text encoding format used in Bitcoin addresses to avoid confusing characters and reduce errors. It improves usability and reliability. Example: Bitcoin addresses avoid similar-looking characters like 0 and O.

Base64 – A common encoding method that represents binary data using ASCII characters. It is widely used for data transmission and storage. Example: Images sent in emails often use Base64 encoding.

Basic Earnings Per Share (EPS) – A measure of a company’s profit divided by outstanding shares. It shows how much profit is attributable to each share. Example: Higher EPS usually signals stronger company performance.

Basis of Lightning Technology (BOLT) – A set of technical standards that define how the Lightning Network operates. BOLT ensures compatibility across Lightning implementations. Example: Different Lightning wallets work together because they follow BOLT specs.

Basis Points – A unit equal to one-hundredth of a percent. Basis points are used to precisely describe changes in rates or yields. Example: An interest rate increase of 25 basis points equals 0.25%.

Batching – A Bitcoin technique that combines multiple payments into a single transaction. It lowers fees and reduces blockchain congestion. Example: Exchanges batch withdrawals to save on transaction fees.

Bear Market – A sustained period of declining prices, typically marked by pessimism and reduced investor confidence. It is often defined as a drop of 20% or more from recent highs. Example: Bitcoin prices falling for months signals a bear market.

Bear Trap – A false signal where prices appear to be falling, prompting selling, before sharply reversing upward. It traps traders who bet on further declines. Example: Traders sell expecting lower prices, then the market rallies.

Bearer Asset – An asset controlled solely by possession rather than registration. Bitcoin functions as a digital bearer asset. Example: Whoever holds the private keys controls the bitcoin.

Bech32 – A modern Bitcoin address format that improves error detection and supports SegWit. It often results in lower transaction fees. Example: Addresses starting with “bc1” use Bech32.

Bech32m – An updated Bech32 format introduced with Taproot. It supports newer spending conditions while preserving strong error detection. Example: Taproot transactions use Bech32m addresses.

Beneficial Owner – The person or entity that ultimately controls or benefits from an asset, even if it is held in another name. Example: A trust may hold assets, but a person is the beneficial owner.

Beta – A measure of how volatile an asset is relative to the broader market. A beta above one indicates greater price swings. Example: Bitcoin often has a higher beta than stocks.

Bid – The highest price a buyer is willing to pay for an asset at a given time. It represents demand in the market. Example: Buyers place bids in an exchange order book.

Bid-Ask Spread – The gap between the highest bid and lowest ask. Narrow spreads indicate high liquidity. Example: Liquid markets have tight bid-ask spreads.

Binary – A number system based on zeros and ones. It is the foundation of all digital computation. Example: Computers process all data using binary code.

BIP 8 (Soft Fork Activation) – A Bitcoin proposal that defines a time-based method for activating soft forks. It allows optional user enforcement if miners fail to signal. Example: Users can enforce upgrades even without miner support.

BIP 9 (Soft Fork Activation) – A Bitcoin upgrade mechanism that relies on miner signaling within set time windows. It was used for earlier protocol changes. Example: SegWit was activated using BIP 9.

BIP 16 (Pay-to-Script-Hash) – A Bitcoin upgrade that allowed funds to be sent to a script hash instead of a public key. It enabled more flexible spending conditions. Example: Multisig wallets rely on P2SH.

BIP 32 (Hierarchical Deterministic Wallets) – A standard that allows all wallet keys to be derived from a single master seed. This simplifies backups and key management. Example: One seed phrase can restore an entire wallet.

BIP 39 (Mnemonic Phrases) – A standard that defines how human-readable seed phrases are generated. These phrases back up and restore wallet access. Example: A 12-word seed restores your wallet.

BIP 44 (Derivation Paths for P2PKH) – A proposal that standardizes how wallets derive addresses for legacy Bitcoin transactions. It improves interoperability. Example: Different wallets generate the same addresses using BIP 44.

BIP 49 (Derivation Paths for Wrapped SegWit) – A standard that defines wallet paths for SegWit addresses nested in older formats. It bridges legacy and SegWit systems. Example: Older wallets can send to SegWit addresses.

BIP 84 (Derivation Paths for Native SegWit) – A proposal that standardizes derivation paths for native SegWit addresses. It improves efficiency and fee savings. Example: Modern wallets default to BIP 84.

BIP 125 (Replace-by-Fee) – A Bitcoin feature that allows unconfirmed transactions to be replaced with higher-fee versions. It helps transactions confirm faster during congestion. Example: You increase a fee if your transaction is stuck.

BIP 174 (Partially Signed Bitcoin Transactions) – A transaction format that allows multiple parties to collaboratively sign before broadcast. It is essential for multisig workflows. Example: Multisig wallets exchange PSBT files.

BIP 340 (Schnorr Signatures) – A Bitcoin upgrade that introduced Schnorr signatures. It improves privacy, efficiency, and multisignature aggregation. Example: Multiple signatures appear as one on-chain.

BIP 341 (Taproot) – A Bitcoin upgrade that enhances privacy and flexibility by hiding complex spending conditions unless they are used. Example: Smart contracts look like regular transactions.

BIP 342 (Tapscript) – An update to Bitcoin’s scripting system that supports Taproot. It enables more expressive and efficient contracts. Example: Advanced scripts become cheaper and more private.

Bitcoin – A decentralized monetary network that enables peer-to-peer value transfer without intermediaries. It is secured by cryptography and proof-of-work. Example: You can send value globally without a bank.

Bitcoin Core – The primary open-source software implementation of Bitcoin. It is used to run full nodes and enforce consensus rules. Example: Most nodes run Bitcoin Core.

Bitcoin Implementations – Different software programs that follow Bitcoin’s consensus rules and allow nodes to participate in the network. They must all agree on the same rules for Bitcoin to function. Example: Bitcoin Knots and Bitcoin Core agree on consensus.

Bitcoin Knots – An alternative Bitcoin node implementation that offers stricter policy controls and more configuration options. It remains fully compatible with Bitcoin’s consensus rules. Example: Advanced users customize node behavior with Knots.

Bitcoin Node – A computer running Bitcoin software that verifies transactions and blocks independently. Nodes enforce the rules of the network without relying on trust. Example: Running a node lets you verify your own transactions.

Bitcoin Script – A simple programming language used to define how bitcoin can be spent. It controls the conditions required to unlock funds. Example: Multisig rules are written in Script.

Bitcoin Supply – The total number of bitcoin that will ever exist, capped at 21 million by the protocol. This fixed supply cannot be changed by governments or central banks. Example: No authority can print more bitcoin.

Bitcoin-Qt – The original graphical interface for Bitcoin Core. It allows users to run a node and interact with Bitcoin visually. Example: Users manage wallets through a desktop interface.

Bitcoind – The command-line version of Bitcoin Core that runs a full node without a graphical interface. It is commonly used on servers. Example: Servers run bitcoind in the background.

BitLicense – A regulatory framework created by New York State for businesses involved in virtual currency activity. It imposes licensing and compliance requirements. Example: Exchanges must apply for a BitLicense in New York.

Block – A container that groups verified Bitcoin transactions together. Blocks are added to the blockchain through mining. Example: New blocks are mined roughly every 10 minutes.

Block Explorer – A tool that lets users view transactions, addresses, and blocks on the Bitcoin network. It provides transparency into on-chain activity. Example: You look up a transaction ID online.

Block Header – The metadata portion of a block that includes the previous block hash and other key information. It links blocks together cryptographically. Example: The header secures the chain’s history.

Block Height – The position of a block within the blockchain. It represents how many blocks came before it. Example: Halvings occur at specific block heights.

Block Reward – The total compensation a miner receives for mining a block. It includes newly issued bitcoin and transaction fees. Example: Miners earn BTC for securing the network.

Block Size – A measure of how much data a block contains. Today it is governed by block weight rather than raw bytes. Example: SegWit allows more transactions per block.

Block Subsidy – The portion of the block reward created through new bitcoin issuance. It halves roughly every four years. Example: The subsidy drops after each halving.

Block Weight – A metric that measures block size by weighting different types of data. It caps blocks at four million weight units. Example: Signature data counts less toward block weight.

Blockchain – A shared ledger made up of linked blocks that record transactions over time. Each block is cryptographically connected to the previous one. Example: Bitcoin’s blockchain records all transactions publicly.

Blockchain Trilemma – The idea that decentralization, security, and scalability are difficult to maximize at the same time. Improving one often comes at the expense of the others. Example: Bitcoin favors security and decentralization over speed.

Bloom Filter – A probabilistic tool that allows light clients to query for transactions without revealing full details. It offers partial privacy with efficiency tradeoffs. Example: Lightweight wallets use bloom filters.

Blind Signatures – A cryptographic method that allows data to be signed without revealing its contents. It is used in privacy-focused payment systems. Example: Payment systems hide transaction details during signing.

Bond – A debt instrument where investors lend money in exchange for interest and repayment at maturity. Bonds are common in capital markets. Example: Governments issue bonds to raise funds.

Bootloader – A secure program that runs when a hardware wallet starts and verifies the authenticity of its firmware. It prevents unauthorized software from loading on the device. Example: The device checks integrity before turning on.

Brokerage – A firm that facilitates buying and selling financial assets for clients. Brokerages act as intermediaries rather than principals. Example: You trade stocks through a brokerage account.

Brute Force Attack – An attack that attempts to guess keys or passwords by trying every possible combination. Strong cryptography makes this impractical. Example: Bitcoin private keys cannot be brute-forced.

BTC – The ticker symbol used to represent bitcoin. It denotes the native asset of the Bitcoin network. Example: Exchanges list prices in BTC/USD.

Bubble – A market phase driven by speculation where prices rise rapidly beyond fundamentals. Bubbles often end with sharp corrections. Example: Prices surge quickly and then crash.

Bull Market – A sustained period of rising prices marked by optimism and strong demand. Bull markets reflect positive sentiment. Example: Investors buy aggressively during bull markets.

Bull Trap – A false breakout where prices rise briefly before reversing downward. It catches buyers who expect continued gains. Example: Traders buy a breakout that quickly fails.

Burn – The act of permanently removing coins by sending them to an unspendable address. While not part of Bitcoin’s monetary policy, the concept appears in other digital asset systems. Example: Tokens are destroyed to reduce supply.

Business Continuity and Disaster Recovery (BCDR) Plan – A strategy for maintaining operations during disruptions. It outlines how systems and data are restored after failures. Example: Companies plan for outages and cyberattacks.

Byte – A basic unit of digital information made up of eight bits. It is used to measure data size. Example: Transaction sizes are measured in bytes.

Byzantine Fault Tolerance (BFT) – The ability of a system to function correctly even when some participants act maliciously. It is essential for decentralized networks. Example: Bitcoin remains secure despite attackers.

Byzantine Generals Problem – A thought experiment illustrating the difficulty of reaching agreement in adversarial systems. Bitcoin solves this through proof-of-work. Example: Bitcoin reaches consensus without trust.

Call Option – A contract that gives the holder the right to buy an asset at a set price before a certain date. It benefits from rising prices. Example: An investor buys a call option hoping the stock price rises above the strike price.

Cantillon Effect – The idea that newly created money benefits early recipients first. It explains uneven economic impacts of monetary expansion. Example: Those closest to new money spend it before prices rise for everyone else.

Capital Asset Pricing Model (CAPM) – A model that estimates expected returns based on market risk. It links risk to reward. Example: Investors use CAPM to decide whether an investment’s return justifies its risk.

Capital Controls – Government restrictions on the movement of money across borders. They are often used during financial stress. Example: A country limits how much money citizens can move abroad.

Capital Expenditure – Spending on long-term assets like equipment or infrastructure. These investments support future growth. Example: A company buys new machinery to expand production.

Capital Gains – Profits realized when an asset is sold for more than its purchase price. They are often subject to taxation. Example: Selling bitcoin for more than you paid creates a capital gain.

Capital Losses – Losses incurred when an asset is sold for less than its original cost. They can offset gains for tax purposes. Example: A losing stock sale reduces taxable gains.

Capital Markets – Markets where long-term financial assets such as stocks and bonds are traded. They support investment and growth. Example: Stock exchanges are part of capital markets.

Cash – Money held in physical form or readily available in bank accounts. It provides immediate liquidity. Example: Cash in a checking account can be spent immediately.

Cashu – A privacy-focused digital cash system based on blind signatures. It enables bearer-style payments with strong anonymity. Example: Users transact digitally without revealing identities.

Censorship Resistance – The ability of a system to operate without being blocked or controlled by third parties. This is a core property of Bitcoin. Example: No authority can stop a valid Bitcoin transaction.

Chain Analysis – The practice of examining blockchain data to trace transaction flows. It is used by researchers, companies, and regulators. Example: Analysts follow transaction trails between addresses.

Chain Reorganization (Reorg) – A temporary event where the blockchain replaces recent blocks with a longer valid chain. Reorgs are rare and typically resolve within a few blocks. Example: A transaction briefly disappears before reappearing in a later block.

Change Address – A new address automatically generated by a wallet to receive leftover bitcoin from a transaction. This improves privacy and avoids address reuse. Example: Your wallet sends change back to a fresh address.

Change Output – The portion of a Bitcoin transaction that sends leftover funds back to the sender. It prevents overpaying the recipient. Example: Extra bitcoin returns to you after a payment.

Chaumian Principles – Privacy concepts introduced by David Chaum that enable anonymous digital payments. They influence modern eCash designs. Example: Payment systems hide user identities during transactions.

Checksum – A value used to detect errors in data. It helps ensure information has not been corrupted. Example: Wallet software checks for typing mistakes in addresses.

Child-Pays-for-Parent (CPFP) – A fee strategy where a high-fee transaction pulls a low-fee parent into a block. It speeds up confirmation. Example: A wallet adds fees to push a stuck transaction through.

Clearinghouse – An intermediary that ensures trades settle correctly between buyers and sellers. It reduces counterparty risk. Example: A clearinghouse guarantees stock trades settle properly.

Clipboard Hijacking – Malware that replaces copied crypto addresses with an attacker’s address. It targets user error. Example: Funds are sent to the wrong address without the user noticing.

Coase Theorem – An economic idea that suggests private parties can resolve disputes efficiently if transaction costs are low. It highlights the role of clear property rights. Example: Neighbors negotiate noise issues without government involvement.

Coin Clipping – A historical practice of shaving metal from coins while keeping their face value. It weakened trust in sound money systems. Example: Coins lost value as metal was secretly removed.

Coin Control – A wallet feature that allows users to choose which UTXOs are spent in a transaction. It is used for privacy, fee optimization, and balance management. Example: Selecting specific UTXOs avoids linking addresses.

Coin Selection – The process a Bitcoin wallet uses to choose which unspent outputs to spend. Good coin selection improves fees and privacy. Example: Wallet software picks the most efficient UTXOs.

Coinbase Transaction – The first transaction in every Bitcoin block that creates new bitcoin and collects transaction fees for the miner. Example: Miners receive rewards through the coinbase transaction.

CoinJoin – A privacy technique where multiple users combine transactions to obscure ownership links. It reduces on-chain traceability. Example: Funds are mixed to break transaction history links.

CoinSwap – A protocol that allows parties to swap bitcoin ownership without revealing direct links on-chain. It enhances privacy without trusted intermediaries. Example: Two users exchange coins without visible connection.

Cold Storage – The practice of storing private keys offline to reduce hacking risk. It is used for long-term security. Example: A hardware wallet kept offline protects savings.

Collaborative Custody – A custody model where control is shared across multiple parties. It reduces single points of failure. Example: Multiple keys are required to move funds.

Collateral – An asset pledged to secure a loan. It can be seized if the borrower defaults. Example: Bitcoin is locked as collateral for a loan.

Commodity Trading Futures Commission (CFTC) – A U.S. regulator overseeing futures, options, and derivatives markets. It also plays a role in digital asset oversight. Example: The CFTC regulates bitcoin futures markets.

Common Input Ownership Heuristic – An analysis assumption that inputs in the same transaction are controlled by one entity. It is often used in blockchain tracing. Example: Analysts assume one person owns all inputs.

Confirmation – When a transaction is included in a block on the blockchain. Each additional block increases security. Example: A payment is confirmed once mined.

Confirmations (Finality / Depth) – Each block added after a transaction is included increases its security and finality. More confirmations make reversal increasingly unlikely. Example: Six confirmations is considered very secure.

Consensus – The process by which network participants agree on valid transactions and the current state of the system. Example: Nodes agree on which transactions are valid.

Consensus Mechanism – The method a network uses to reach agreement, such as Bitcoin’s proof-of-work. It aligns incentives and security. Example: Mining secures agreement without trust.

Consumer Price Index (CPI) – A measure of average price changes for consumer goods and services. It is commonly used to track inflation. Example: CPI shows how everyday prices rise over time.

Contango – A futures market condition where prices trade above the spot price. It often reflects carrying costs or expectations. Example: Futures cost more than today’s spot price.

Core Inflation – An inflation measure that excludes volatile items like food and energy. It is used to assess long-term trends. Example: Economists track core inflation for stability.

Correlation – A statistic that shows how closely two variables move together. It does not imply causation. Example: Bitcoin and stocks sometimes move together.

Cost Basis – The original purchase value of an asset. It is used to calculate gains or losses. Example: Your purchase price sets cost basis.

Cost Basis Accounting – A method of tracking asset purchases and sales to determine tax outcomes. Accuracy is essential for compliance. Example: Every trade must be recorded correctly.

Counterparty Risk – The risk that another party in a financial arrangement fails to meet their obligations. Bitcoin minimizes counterparty risk through self-custody and settlement without intermediaries. Example: Self-custody removes reliance on banks.

Cypherpunk – A movement advocating cryptography to protect privacy and freedom. Cypherpunks laid the groundwork for Bitcoin. Example: Early cypherpunks promoted digital privacy tools.

Dandelion – A Bitcoin network protocol that improves privacy by obscuring transaction origins during broadcast. Example: A transaction’s origin is hidden as it spreads through the network.

Debasement – The reduction of a currency’s value by increasing its supply. Over time, debasement erodes purchasing power. Example: Printing more money causes each unit to buy less.

Debt – Money borrowed that must be repaid, typically with interest. Debt introduces obligation and risk. Example: Taking a loan requires future income to repay it.

Decentralization – The distribution of control across many independent participants. It reduces reliance on central authorities. Example: No single entity controls Bitcoin.

Decentralized Exchange (DEX) – A trading platform where users exchange assets directly without a central intermediary. Control remains with users. Example: Trades occur directly from user wallets.

Decentralized Ledger – A shared record maintained across many nodes rather than one authority. It increases transparency and resilience. Example: Thousands of computers store the same transaction history.

Default – The failure to meet debt obligations as agreed. Defaults carry legal and financial consequences. Example: Missing loan payments leads to default.

Deflation – A sustained decrease in prices that increases purchasing power. It can discourage borrowing and spending. Example: Goods become cheaper over time.

Delta – A metric that measures how sensitive an option’s price is to changes in the underlying asset. Example: A delta of 0.5 means the option moves half as much as the asset.

Demand-Pull Inflation – Inflation driven by demand exceeding supply. Prices rise as buyers compete for limited goods. Example: Too much money chases too few products.

Denial of Service (DoS) Attack – An attack that overwhelms a system to make it unavailable. It targets availability rather than data. Example: A website crashes due to excessive traffic.

Difficulty Adjustment – An automatic Bitcoin mechanism that adjusts mining difficulty roughly every two weeks. It keeps new blocks arriving about every 10 minutes regardless of mining power. Example: Mining gets harder as more miners join.

Distributed Ledger – A ledger that is shared and synchronized across many independent computers rather than controlled by a single authority. Bitcoin’s ledger exists globally in many copies. Example: Every full node holds a copy of the ledger.

Divisibility – The ability of money to be broken into smaller units without losing value. Bitcoin is divisible into satoshis. Example: You can send tiny fractions of bitcoin.

Dodd-Frank Act – A U.S. law passed after the 2008 crisis to increase oversight of financial institutions. It aimed to reduce systemic risk. Example: Banks face stricter regulations after 2008.

Dollar Cost Averaging (DCA) – An investment approach where fixed amounts are invested at regular intervals. It reduces timing risk. Example: Buying bitcoin weekly regardless of price.

Double Spend – An attempt to use the same digital funds more than once. Bitcoin prevents this through consensus and confirmations. Example: Bitcoin ensures coins can’t be reused.

Durability – The ability of money to retain value and form over time. Durable money resists decay and loss. Example: Digital bitcoin does not physically degrade.

Dust – Tiny amounts of bitcoin that cost more to spend than they are worth in fees. Dust can accumulate in wallets. Example: Small leftover balances remain unspent.

Dust Attack – A privacy attack where small amounts of bitcoin are sent to many addresses to analyze behavior. It targets user patterns. Example: Attackers track how wallets move tiny funds.

Early Adopter – Someone who adopts a new technology before it becomes mainstream. Early adopters often accept higher risk. Example: Buying bitcoin before most people understand it.

eCash – Digital money designed to function like physical cash. It often emphasizes privacy and bearer-style ownership. Example: Paying digitally without revealing identity.

ECDSA – A cryptographic signature algorithm used by Bitcoin to authorize transactions. It secures ownership and spending. Example: Proving you own bitcoin without revealing your private key.

Eclipse Attack – An attack where a node is isolated from honest peers and fed misleading information. It targets network perception. Example: A node sees fake network data instead of real transactions.

Economic Expansion – A phase of growth marked by rising output and employment. It is part of the business cycle. Example: Businesses hire more as the economy grows.

Elasticity – A measure of how responsive supply or demand is to price changes. High elasticity means strong response. Example: Prices drop quickly when demand falls.

Eltoo – A proposed Lightning upgrade that simplifies channel updates. It reduces penalty complexity. Example: Updating Lightning payments without harsh penalties.

Embezzlement – The theft of assets by someone entrusted to manage them. It is a breach of fiduciary duty. Example: An employee stealing company funds.

Encoding – The process of converting data into a specific format for storage or transmission. It ensures information can be reliably interpreted by systems. Example: Turning data into a format computers can read.

Encryption – The transformation of data into a secure form that can only be read with the correct key. It protects information from unauthorized access. Example: Locking information so only the owner can read it.

End-to-End (E2E) Encryption – A communication method where only the sender and recipient can read the message. Intermediaries cannot access the contents. Example: Secure messaging apps protecting conversations.

Energy Cost of Money – The real-world energy required to create and secure money. Bitcoin’s Proof of Work ties monetary issuance to physical energy, making it costly to manipulate. Example: Mining bitcoin requires real electricity.

Entropy – Randomness used to generate secure private keys and seed phrases. Higher entropy makes keys extremely difficult to guess or recreate. Example: Strong randomness protects wallet security.

Equilibrium – A state where supply and demand are balanced and prices stabilize. Markets tend to move toward equilibrium over time. Example: Prices settle where buyers and sellers agree.

Equity – Ownership value in an asset or business after liabilities are deducted. It represents residual claim and participation in upside. Example: Owning shares in a company.

Erlay – A proposed Bitcoin networking improvement that reduces bandwidth usage when sharing transactions. It improves efficiency without changing consensus. Example: Nodes sharing transaction data more efficiently.

Escrow – An arrangement where a neutral third party temporarily holds assets until conditions are met. It reduces trust risk between parties. Example: Funds held until a deal is completed.

European Central Bank (ECB) – The central bank responsible for monetary policy across the eurozone. Its primary mandate is price stability. Example: Setting interest rates for Europe.

Exchange – A marketplace where buyers and sellers trade financial assets. Exchanges provide price discovery and liquidity. Example: Buying bitcoin on a trading platform.

Exchange Traded Fund (ETF) – A fund that trades on exchanges and tracks the price of an asset or basket of assets. It offers exposure without direct ownership. Example: Gaining bitcoin price exposure through a stock market product.

Executive Order 6102 – A 1933 U.S. order that forced Americans to surrender privately held gold. It marked a major shift in monetary control. Example: Gold ownership was made illegal for citizens.

Expected Return – The probability-weighted average outcome of an investment. It reflects both potential gains and losses. Example: Estimating future performance of an asset.

Extended Private Key (Xprv) – A master key in hierarchical wallets that can derive all private keys. Control of an Xprv means control of all funds. Example: One key unlocking an entire wallet.

Extended Public Key (Xpub) – A key that generates wallet addresses without exposing private keys. It allows balance monitoring and receiving funds. Example: Watching wallet balances without spending access.

Face Value – The nominal value assigned to a financial instrument. It may differ from market value. Example: A bond may trade above or below its face value.

Fake Wallets – Fraudulent wallet software designed to steal private keys or funds. They exploit user trust. Example: Downloading a fake wallet app can result in stolen bitcoin.

Faucet – A service that distributes small amounts of bitcoin for educational or promotional purposes. It introduces users to the network. Example: Receiving a few sats to learn how transactions work.

Federal Deposit Insurance Corporation (FDIC) – A U.S. agency that insures bank deposits up to a set limit. It protects depositors, not bank solvency. Example: Bank deposits are insured up to a capped amount.

Federal Open Market Committee (FOMC) – The Federal Reserve body that sets U.S. monetary policy. It influences interest rates and liquidity. Example: The FOMC raises or lowers interest rates.

Federal Reserve System – The central banking system of the United States. It manages monetary policy, banking stability, and currency issuance. Example: The Fed controls money supply and credit conditions.

Fedimint – A federated custody and payments system built on Bitcoin and Lightning. It enables community-operated financial infrastructure. Example: A local group runs shared custody for payments.

Fee Rate (sats/vB) – The way Bitcoin transaction fees are quoted, measured in satoshis per virtual byte. Higher fee rates generally lead to faster confirmation. Example: Paying a higher sats/vB confirms faster.

Fiat Currency – Government-issued money not backed by a physical commodity. Its value comes from legal decree and trust. Example: Dollars are fiat money.

Fiduciary Duty – A legal obligation to act in another party’s best interest. It applies to roles like trustees and advisors. Example: Advisors must prioritize client interests.

FIFO – An accounting method where the earliest acquired assets are considered sold first. It affects tax outcomes. Example: Oldest bitcoin purchases are taxed first.

Financial Action Task Force (FATF) – An international body that sets standards to combat money laundering and terrorism financing. Its guidance shapes global regulation. Example: Countries align AML laws to FATF guidance.

Financial Crimes Enforcement Network (FinCEN) – A U.S. agency that enforces AML laws and monitors financial transactions. It oversees reporting requirements. Example: Banks report large transactions to FinCEN.

Firmware – The core software running on a hardware wallet that manages key storage and transaction signing. Authentic and up-to-date firmware is critical for security. Example: Updating firmware fixes security issues.

Fiscal Policy – Government decisions around taxation and spending. It influences economic growth and inflation. Example: Stimulus spending increases money flow.

Fisher Effect – A theory that nominal interest rates reflect real rates plus expected inflation. It links rates to monetary expectations. Example: Higher inflation leads to higher rates.

Fixed Cost – A business expense that remains constant regardless of output. Examples include rent and salaries. Example: Rent stays the same even if sales change.

Float – Money available for use or the time delay between payment initiation and settlement. Float affects liquidity. Example: Funds take days to settle between banks.

Foreign Exchange Risk – The risk of loss due to currency value fluctuations. It impacts international transactions. Example: Currency swings reduce overseas profits.

Fork – A change to blockchain rules that creates a divergence in protocol behavior. Forks can be backward-compatible or not. Example: A protocol upgrade changes rules.

Forward Contract – A private agreement to buy or sell an asset at a future date and price. Terms are customized between parties. Example: Locking in a future price today.

Fractional Reserve Banking – A system where banks keep only part of deposits as reserves and lend the rest. It expands the money supply. Example: Banks lend deposited money multiple times.

Fungibility – The property that makes units of an asset interchangeable. Strong fungibility supports fair money. Example: One dollar is equal to another.

Futures Contract – A standardized agreement to buy or sell an asset at a set price on a future date. Futures trade on regulated exchanges. Example: Traders speculate on future prices.

Game Theory – The study of strategic decision-making among rational actors. It helps explain incentives in Bitcoin and markets. Example: Miners are incentivized to follow the rules because cheating is costly.

Gamma – A measure of how an option’s delta changes as the underlying price moves. It reflects convexity. Example: Options become more sensitive as prices move quickly.

Generator Point – A fixed point on an elliptic curve used to generate cryptographic keys. It anchors Bitcoin’s key system. Example: All Bitcoin keys mathematically originate from this point.

Genesis Block – The first block in the Bitcoin blockchain, mined in 2009. It marks the network’s beginning. Example: Bitcoin’s ledger starts with the genesis block.

Glass-Steagall Act – A 1933 U.S. law separating commercial and investment banking. It aimed to reduce financial risk. Example: Banks were once restricted from mixing deposits and speculation.

Gold Standard – A historical monetary system where currency was backed by a fixed amount of gold. Most countries abandoned it in the 20th century. Example: Dollars could once be redeemed for gold.

Gossip Network – A decentralized communication method where nodes share information redundantly. It improves resilience. Example: Nodes spread transactions by sharing them peer-to-peer.

Graphical User Interface (GUI) – A visual layer that allows users to interact with software using graphics. It improves usability. Example: Clicking buttons instead of using command lines.

Graphics Processing Unit (GPU) – A processor optimized for parallel tasks. GPUs were used in early Bitcoin mining. Example: Early miners used GPUs before ASICs existed.

Gresham’s Law – An economic principle stating that bad money drives good money out of circulation when both are forced to be used. People tend to hoard sound money and spend weaker money. Example: People save harder money and spend inflating currency.

Gross Domestic Product (GDP) – The total value of all finished goods and services produced within a country over a given period. It is a broad measure of economic activity. Example: GDP is used to estimate a country’s economic size.

Hal Finney – A cryptographer and early Bitcoin contributor who received the first bitcoin transaction from Satoshi Nakamoto. He played a key role in Bitcoin’s early development. Example: Hal Finney helped test Bitcoin at launch.

Halving – A scheduled Bitcoin event where the block subsidy is reduced by half. It slows new bitcoin issuance and reinforces scarcity. Example: New bitcoin creation drops every four years.

Hard Cap – A fixed maximum supply of an asset that cannot be exceeded. Bitcoin’s hard cap is enforced by code. Example: No more than 21 million bitcoin can exist.

Hard Commodity – A physical resource like metals or energy that can be extracted from the earth. These commodities often have intrinsic production costs. Example: Gold requires mining and refining.

Hard Fork – A protocol change that is not backward-compatible. Nodes must upgrade to remain on the same network. Example: Old software becomes incompatible after a hard fork.

Hard Money – Money that is difficult to create or inflate. It typically maintains value over long periods. Example: Assets with limited supply retain purchasing power.

Hardware Wallet – A physical device designed to store private keys offline. It provides strong protection against online attacks. Example: Signing transactions without exposing keys to the internet.

Hash Function – A mathematical process that converts data into a fixed-length output. Bitcoin uses hash functions for security and mining. Example: Small input changes create completely different hashes.

Hash Rate – The total computing power securing a proof-of-work network. Higher hash rate generally means stronger security. Example: More miners increase network security.

Hashed Time Locked Contract (HTLC) – A contract used in Lightning payments that requires cryptographic proof and timelocks. It enables trust-minimized conditional payments. Example: Payments only complete if conditions are met.

Hedge Position – An investment taken to offset risk elsewhere. Hedging reduces exposure to adverse price movements. Example: Buying protection against price drops.

Hexadecimal – A base-16 numbering system used in computing. It represents binary data more compactly. Example: Long binary values are shortened using hex.

Hierarchical Channel – A proposed Lightning concept that organizes channels in layers. It aims to improve routing and scalability. Example: Payments route through structured channel paths.

Hierarchical Deterministic (HD) Wallet – A wallet structure where all keys are derived from a single seed. It simplifies backups and recovery. Example: One seed restores all addresses.

HIFO – A tax method where the highest-cost assets are treated as sold first. It can reduce taxable gains. Example: Selling the most expensive coins first lowers taxes.

HODL – A term meaning to hold bitcoin long-term despite volatility. It reflects conviction rather than short-term trading. Example: Ignoring price swings and holding.

Hot Wallet – A wallet connected to the internet for convenience. It carries higher security risk than cold storage. Example: Mobile wallets trade convenience for security.

Howey Test – A U.S. legal test used to determine whether an arrangement qualifies as a security. It influences digital asset regulation. Example: Regulators assess whether an asset is a security.

Hyperinflation – Extreme and rapid inflation that destroys purchasing power. It often results from monetary mismanagement. Example: Prices double rapidly and savings collapse.

Hypothecation – The practice of using assets as collateral while retaining ownership. It is common in lending and brokerage. Example: Assets are pledged while still held by the owner.

Immutability – The property that makes blockchain records extremely difficult to change. It provides historical integrity. Example: Once confirmed, Bitcoin transactions cannot be altered.

Inbound Liquidity – The ability of a Lightning channel to receive payments. It depends on channel balance and structure. Example: A channel must have inbound liquidity to accept a payment.

Index Price – A reference price derived from multiple markets. It reduces manipulation and improves accuracy. Example: Exchanges use index prices for derivatives settlement.

Individual Retirement Account (IRA) – A tax-advantaged account used for long-term retirement savings. Contributions and withdrawals have specific tax rules. Example: Investing for retirement through an IRA.

Inflation – A general rise in prices that reduces purchasing power. It reflects changes in money supply and demand. Example: Everyday goods cost more over time.

Inflation Hedge – An asset expected to preserve value during inflation. Bitcoin is often viewed through this lens. Example: Holding scarce assets as prices rise.

Inflation (Monetary) – An increase in the supply of money, typically driven by central banks. Over time, this reduces the purchasing power of each unit. Example: Central banks expanding the money supply.

Inflation (Price) – A general rise in prices for goods and services. It is often the visible result of monetary inflation. Example: Groceries and rent becoming more expensive.

Inheritance Planning (Bitcoin) – The process of ensuring bitcoin can be safely passed to heirs without compromising security. It balances privacy, custody, and recovery across generations. Example: Structuring bitcoin access for future heirs.

Initial Block Download (IBD) – The process a Bitcoin node uses to download and verify the entire blockchain. It occurs when first joining the network. Example: A new node syncing the full blockchain.

Input Sequence (nSequence) – A Bitcoin transaction field that enables relative timelocks. It supports advanced transaction logic. Example: Delaying transaction spending by block height.

Insolvency – A condition where liabilities exceed assets or obligations cannot be met. Insolvency signals financial failure. Example: A firm unable to pay creditors.

Interest Rate – The cost of borrowing money or the return on savings. It is expressed as a percentage over time. Example: A loan charging annual interest.

Issue Price – The price at which a security is first offered to investors. It sets the initial valuation. Example: Shares sold during an IPO.

Junk Bond – A high-yield bond issued by borrowers with lower credit ratings. It carries higher default risk. Example: Investors earn higher interest but accept greater risk.

Just-a-Bunch-of-Keys (JBOK) – A wallet setup where private keys are stored independently. It lacks hierarchical structure. Example: Each address has its own separate key.

Key Send – A Lightning feature that allows payments without an invoice. It enables spontaneous transfers. Example: Sending sats instantly without requesting payment.

Know Your Customer (KYC) – Regulations requiring institutions to verify customer identities. They aim to prevent fraud and illicit activity. Example: Uploading ID to open a financial account.

Layer – A classification describing where a protocol operates relative to a base blockchain. Bitcoin is Layer 1, Lightning is Layer 2. Example: Base settlement happens on Layer 1.

Layer 2 – Protocols built on top of Bitcoin that improve speed and cost while relying on the base layer for security. The Lightning Network is the most prominent example. Example: Small payments move off-chain for speed.

Lender of Last Resort – An institution that provides emergency liquidity during financial stress. Central banks often play this role. Example: Central banks backstop failing banks.

LevelDB – A storage engine used by Bitcoin Core to manage blockchain data. It prioritizes speed and efficiency. Example: Blockchain data is stored efficiently on disk.

Leverage – The use of borrowed funds to increase investment exposure. It amplifies both gains and losses. Example: Borrowing money to increase trade size.

LIFO – An accounting method where the most recently acquired assets are treated as sold first. It affects tax outcomes. Example: Newer purchases are taxed first.

Light Client – A wallet that relies on full nodes for verification instead of downloading the entire blockchain. It trades independence for efficiency. Example: Mobile wallets depend on servers.

Lightning Channel – A direct payment channel between two parties on the Lightning Network. It enables fast, low-fee transactions. Example: Two users open a channel to transact instantly.

Lightning Implementations – Different software programs that run the Lightning Network. They follow shared specifications. Example: Multiple Lightning apps interoperate.

Lightning Invoice – A payment request used in Lightning that encodes amount and destination details. It enables secure routing. Example: Scanning a QR code to pay.

Lightning Network – A second-layer Bitcoin protocol for instant and low-cost payments. It scales Bitcoin without changing the base layer. Example: Buying coffee with instant bitcoin payments.

Lightning Network Penalty – A mechanism that punishes attempts to cheat by broadcasting old channel states. It protects channel integrity. Example: Cheaters lose funds if they try to cheat.

Lightning Node – A computer running Lightning software that manages channels and routes payments. It enables fast, off-chain Bitcoin transactions. Example: Routing payments between users.

Limit Order – An instruction to buy or sell an asset at a specified price or better. It provides control over execution price. Example: Buying only if price drops to a target.

Liquid Network – A Bitcoin sidechain designed for faster settlements and confidential transactions. It is often used by exchanges and institutions. Example: Exchanges settle trades quickly off-chain.

Liquidity – The ease with which an asset can be bought or sold without affecting its price. High liquidity supports efficient markets. Example: Large trades move price less.

Liquidity Trap – An economic condition where low interest rates fail to stimulate spending. People hoard cash despite monetary easing. Example: Savings rise even when rates are near zero.

LNURL – A set of Lightning standards that simplify payments, withdrawals, and authentication. It improves user experience. Example: One-click Lightning payments.

Long Position – An investment stance that benefits when prices rise. It reflects bullish expectations. Example: Buying bitcoin expecting price increases.

M-of-N – A multisignature scheme requiring M approvals out of N possible keys. It improves security and shared control. Example: Two of three keys must sign to move funds.

Mainnet – The primary blockchain where real-value transactions occur. It contrasts with test networks. Example: Real bitcoin moves on mainnet.

Maker – A trader who provides liquidity by placing limit orders. Makers help shape the order book. Example: Posting buy orders that others fill.

Malleability – A property that allowed transaction IDs to change before confirmation. SegWit largely resolved this issue. Example: Transaction IDs no longer shift unexpectedly.

Malware – Software designed to harm systems or steal information. It is a common threat in digital finance. Example: Malicious apps steal private keys.

Margin Trading – Trading with borrowed funds to increase position size. It increases both risk and reward. Example: Borrowing to amplify a trade.

Market Capitalization – The total value of an asset based on price multiplied by circulating supply. It provides scale context. Example: Price multiplied by supply estimates size.

Market Depth – A snapshot of buy and sell orders across price levels. It reflects liquidity and resilience. Example: Seeing large orders at many prices.

Market Impact – The effect a trade has on market price. Large orders can move thin markets. Example: Big trades push price quickly.

Market Maker – A participant that continuously quotes buy and sell prices. Market makers support liquidity. Example: Firms providing constant bid and ask prices.

Market Order – An order executed immediately at the best available price. It prioritizes speed over price certainty. Example: Buying instantly at market price.

Maturity Date – The date when a loan or bond must be repaid. It marks the end of the contract. Example: Bonds pay back principal at maturity.

Medium of Exchange – A function of money that allows goods and services to be traded. It reduces barter friction. Bitcoin increasingly serves this role in digital commerce. Example: Paying directly without bartering.

Mempool – A pool of unconfirmed Bitcoin transactions waiting to be mined. Fees influence transaction priority. Example: Transactions wait until mined.

Mempool Explorer – A tool that visualizes pending transactions and fee conditions. It helps users choose fees. Example: Checking fees before sending bitcoin.

Merged Mining – A technique allowing miners to secure multiple blockchains simultaneously. It reuses the same work. Example: Mining two networks at once.

Merkelized Alternative Script Tree (MAST) – A structure that allows complex spending conditions while revealing only what is used. It improves privacy. Example: Hidden conditions stay private.

Merkle Root – A single hash summarizing all transactions in a block. It enables efficient verification. Example: One hash represents many transactions.

Merkle Tree – A cryptographic structure that organizes data into hashes. It allows quick proof of inclusion. Example: Verifying a transaction efficiently.

Merkle-Sum Tree – A Merkle variant that verifies both data integrity and aggregated values. It is used in advanced proofs. Example: Proving totals without revealing details.

Metcalfe’s Law – A principle stating that a network’s value grows with the square of its users. It explains network effects. Example: More users increase usefulness.

Miner-Activated Soft Fork (MASF) – A protocol upgrade activated through miner signaling. It reflects miner coordination. Example: Miners signal support to activate changes.

Mining – The process of securing Bitcoin by validating transactions through proof-of-work. Miners add blocks to the chain. Example: Miners compete to add blocks.

Mining Pool – A group of miners combining resources to earn steadier rewards. Pools share payouts. Example: Small miners pool hash power.

Miniscript – A structured language that simplifies Bitcoin script creation. It improves safety and analysis. Example: Writing safer spending conditions.

Mixing – A privacy method that blends transactions to reduce traceability. It obscures transaction links. Example: Transactions are harder to trace.

Mnemonic – A human-readable word set used to back up wallet keys. It restores access to funds. Example: Words recover a wallet.

Monetary Base – Physical currency plus bank reserves held at a central bank. It anchors money supply. Example: Cash plus bank reserves.

Monetary Policy – Central bank actions that influence money supply and interest rates. It shapes economic conditions. Example: Adjusting rates to manage inflation.

Money Multiplier – A concept describing how bank lending expands money supply. It reflects fractional reserve effects. Example: Deposits create more loans.

Money Supply – The total amount of money in circulation within an economy. It includes cash and deposits. Example: Total dollars available.

Moore’s Law – An observation that computing power tends to double over time. It has influenced mining hardware. Example: Chips become more powerful.

Moral Hazard – A situation where risk-taking increases because consequences are shifted elsewhere. Bailouts can create moral hazard. Example: Risk rises when losses are covered.

Multi-Path Payment (MPP) – A Lightning feature that splits payments across channels. It improves reliability. Example: Payments route across multiple paths.

Multi-Share Backup – A wallet backup method where recovery data is split into multiple pieces. A minimum number of shares is required to restore the wallet. Example: Three of five shares restore access.

Multisig – A transaction scheme requiring multiple keys to authorize spending. It strengthens security. Example: Multiple approvals required.

MuSig – A Schnorr-based multisignature scheme that aggregates signatures into one. It improves privacy and efficiency. Example: Multiple signers appear as one.

Negative Interest Rates – A policy where holding money incurs a cost. It encourages spending over saving. Example: Savers pay to hold cash.

Neutrino – A light client protocol using compact filters. It enables private verification without full nodes. Example: A wallet verifies transactions without downloading the full blockchain.

Node – A computer running Bitcoin software that verifies transactions and enforces the network’s rules. Nodes are the backbone of Bitcoin’s decentralization. Example: Running a node lets you verify Bitcoin yourself.

Nominal Interest Rate – The stated interest rate before inflation. It differs from real returns. Example: A loan advertises a 5% rate before inflation.

Non-Custodial – A system where users control their own private keys. It removes reliance on intermediaries. Example: You hold your keys instead of an exchange.

Nonce – A number miners vary to find a valid block hash. It is central to proof-of-work. Example: Miners change the nonce to find a valid block.

Nostr – A decentralized messaging protocol using public keys. It enables censorship-resistant communication. Example: Messages are shared without a central platform.

Off-Chain – Transactions or activity that occur outside the base blockchain while still being secured by it. Lightning payments are a common example. Example: Small payments happen instantly off-chain.

Off-Ramp – A service that converts bitcoin into fiat currency. It connects Bitcoin back to traditional finance. Example: Selling bitcoin for dollars.

Office of Foreign Assets Control (OFAC) – A U.S. government agency that administers economic sanctions. Its rules affect financial institutions and payment flows. Example: Banks block sanctioned transactions.

On-Chain – Transactions that are recorded directly on the blockchain. They provide maximum security and finality. Example: A large settlement is confirmed on-chain.

On-Device Entry – Entering sensitive information directly on a hardware wallet rather than on a computer or phone. This reduces exposure to malware. Example: Entering a PIN on the device itself.

On-Ramp – A service that allows users to convert fiat currency into bitcoin. It is often the entry point into the Bitcoin network. Example: Buying bitcoin with a bank transfer.

Onion Messages – A Lightning messaging method that routes encrypted messages through multiple nodes. It preserves privacy. Example: Messages are hidden as they pass through the network.

OP_CAT – A currently disabled Bitcoin script opcode that would allow data concatenation. It is discussed in scaling and programmability debates. Example: Developers debate enabling new scripting features.

OP_RETURN – A Bitcoin opcode that allows small amounts of data to be embedded in a transaction. It is commonly used for metadata. Example: Writing a short message into a transaction.

Opcode – An instruction used in Bitcoin Script that defines an operation. Opcodes control how scripts execute. Example: Script instructions define spending rules.

Open Source – Software whose code is publicly available to inspect and modify. Bitcoin relies on open-source development. Example: Anyone can audit Bitcoin’s code.

Operating Expenditure – Ongoing costs required to run a business or system. These include maintenance and utilities. Example: Electricity and server costs.

Opportunity Cost – The value of the best alternative given up when making a decision. Every choice carries tradeoffs. Example: Investing here means not investing elsewhere.

Options Contract – A financial agreement granting the right, but not obligation, to buy or sell an asset at a set price. It is used for hedging and speculation. Example: Buying downside protection.

Oracle Problem – The challenge of bringing real-world data onto a blockchain without introducing trust. It limits smart contract design. Example: Blockchains struggle to verify external prices.

Order Book – A list of buy and sell orders organized by price. It reflects market supply and demand. Example: Seeing bids and asks on an exchange.

Order Execution – The process of completing a trade after an order is placed. Speed and accuracy matter. Example: A trade fills at the expected price.

Orphan Block – A valid block that is not included in the main chain because another block won the race. It becomes discarded. Example: A mined block is left out.

OTC Desk – A trading service that facilitates large transactions outside public exchanges. It minimizes market impact. Example: Institutions trade without moving price.

Outbound Liquidity – The ability of a Lightning channel to send payments. It depends on channel balance. Example: A channel must have funds to send payments.

Partially Signed Bitcoin Transactions (PSBT) – A transaction format that allows multiple parties to sign collaboratively. It is essential for multisig coordination. Example: Multiple signers approve before broadcast.

Pay-to-Public-Key (P2PK) – An early Bitcoin output type that locks funds directly to a public key. It is rarely used today. Example: Early transactions used direct public keys.

Pay-to-Public-Key-Hash (P2PKH) – A common Bitcoin output type that locks funds to a public key hash. It requires a valid signature to spend. Example: Standard legacy Bitcoin addresses.

Pay-to-Script-Hash (P2SH) – An output type that commits to a script hash. The script is revealed only when spending. Example: Multisig scripts stay hidden until used.

Pay-to-Taproot (P2TR) – A Taproot-based output that enables more private and flexible spending. It hides complexity unless needed. Example: Complex conditions look like simple spends.

Pay-to-Witness-Public-Key-Hash (P2WPKH) – A SegWit output type that reduces fees and improves security. It is widely used today. Example: Lower-fee native SegWit addresses.

Pay-to-Witness-Script-Hash (P2WSH) – A SegWit output that supports complex scripts with lower transaction costs. Example: Multisig with reduced fees.

PayJoin (P2EP) – A collaborative transaction where sender and receiver jointly construct the payment. It improves privacy. Example: Payments are harder to trace.

Payment Rail – The infrastructure used to move money between parties. Bitcoin is a global payment rail. Example: Value moves without banks.

Peer-to-Peer (P2P) – A network structure where participants interact directly without intermediaries. Bitcoin operates peer-to-peer. Example: Users transact directly.

Peg – A mechanism that fixes an asset’s value relative to another. Pegs require maintenance and trust. Example: Stable assets track a reference price.

Pegged-to-Market Order – An order that automatically adjusts price based on market movement. It tracks reference prices. Example: Orders move with market changes.

Penalty Transaction – A Lightning transaction that punishes attempts to cheat. It enforces honest behavior. Example: Cheaters lose funds automatically.

Permissionless – A system property that allows anyone to participate without approval. Anyone can use Bitcoin or run a node without asking permission. Example: No account approval required.

Perpetual Swap – A derivative contract without an expiration date. It tracks spot prices through funding rates. Example: Traders hold positions indefinitely.

Personal Consumption Expenditures (PCE) Index – An inflation measure tracking consumer spending. It is favored by the Federal Reserve. Example: The Fed monitors PCE inflation.

Phillips Curve – A theory suggesting a tradeoff between inflation and unemployment. Its reliability is debated. Example: Policymakers weigh jobs versus inflation.

Phishing Attack – A scam that tricks users into revealing sensitive information. It often targets wallets and accounts. Example: Fake emails steal login details.

Physical Settlement – Contract settlement through delivery of the actual asset. It contrasts with cash settlement. Example: Receiving the real commodity.

Pizza Day – May 22, 2010, when bitcoin was first used to buy a real-world good. It marks early adoption. Example: Bitcoin bought pizza for the first time.

PIN – A short numeric code used to unlock a hardware wallet. Devices typically enforce delays or wipes after repeated incorrect attempts. Example: Entering a PIN to access keys.

Point Time Locked Contract (PTLC) – A Lightning contract using elliptic curve points instead of hashes. It improves privacy and flexibility. Example: Payments reveal less information.

Portability – The ease with which an asset can be moved across systems or borders. Bitcoin excels in portability. Example: Sending value globally in minutes.

Preimage – The original data that produces a given hash. Revealing a preimage can unlock funds. Example: Revealing a secret to claim payment.

Present Value – The current worth of a future amount discounted by time and risk. It underpins investment decisions. Example: Future cash is worth less today.

Price Discovery – The process by which markets determine price through trading. It reflects collective information. Example: Buyers and sellers set price.

Prime Broker – A financial institution offering services like custody, lending, and execution to large investors. Example: Institutions access markets through prime brokers.

Principal – The original amount invested or loaned. It excludes interest or returns. Example: The initial loan amount.

Principal Model – A business model where a firm trades using its own capital. It assumes market risk. Example: Firms trade their own balance sheet.

Private Key – A secret cryptographic key that authorizes spending bitcoin. Control of the key equals control of funds. Example: Whoever has the key controls the bitcoin.

Private Sector – The portion of the economy run by individuals and businesses. It contrasts with government activity. Example: Companies and entrepreneurs operate privately.

Probate – The legal process of settling an estate after death. It can be slow and costly. Example: Assets are distributed through courts.

Proof of Reserves – A method used by custodians to demonstrate they hold sufficient assets to cover customer balances. It improves transparency but does not prove solvency. Example: Exchanges publish reserve proofs.

Proof-of-Work (PoW) – A consensus mechanism where miners expend computational energy to secure the network. It makes rewriting history extremely costly. Example: Mining secures the blockchain.

Protocol – A set of rules that governs how a network operates and communicates. Bitcoin’s protocol defines how value moves without trust. Example: Rules define valid transactions.

Pseudonym – An identifier that masks a real-world identity while allowing consistent participation. Bitcoin users operate pseudonymously. Example: Addresses are not real names.

Public Key – A cryptographic key derived from a private key that can be shared openly. It is used to receive funds and verify signatures. Example: Sharing an address safely.

Public Sector – The part of the economy operated by governments and public institutions. It is funded primarily through taxation. Example: Government-run services.

Purchasing Power – The amount of goods or services a unit of money can buy. Inflation erodes purchasing power over time. Example: Money buys less over years.

Put Option – A contract that gives the holder the right to sell an asset at a specified price. It benefits from falling prices. Example: Protecting against price drops.

QR Code – A machine-readable code that encodes information such as a Bitcoin address. It simplifies sending and receiving payments. Example: Scanning a code to send bitcoin instantly.

Quantitative Easing (QE) – A policy where central banks create money to buy assets. It aims to stimulate economic activity. Example: Central banks inject liquidity into markets.

Quantitative Tightening – The reversal of quantitative easing through asset sales or balance sheet reduction. It removes liquidity from markets. Example: Central banks shrink their balance sheets.

Real GDP – Economic output adjusted for inflation. It reflects actual growth rather than nominal price changes. Example: Growth measured after removing inflation effects.

Real Interest Rate – An interest rate adjusted for inflation. It shows true gains or losses in purchasing power. Example: Returns after inflation are considered.

Recession – A period of economic contraction marked by declining output and employment. Recessions are part of the business cycle. Example: Businesses cut jobs during downturns.

Redeem Script – The script revealed when spending a P2SH output. It defines the conditions required to unlock funds. Example: Spending reveals the hidden script.

Regtest – A private Bitcoin testing mode that allows blocks to be created on demand. It is used for development. Example: Developers test features locally.

Rehypothecation – The reuse of collateral by lenders for additional borrowing or trading. It increases leverage and systemic risk. Example: Collateral is reused multiple times.

Reorganization – A temporary blockchain divergence that resolves to the longest valid chain. Recent blocks may be replaced. Example: A few blocks are reordered briefly.

Replace-By-Fee (RBF) – A feature that allows unconfirmed transactions to be replaced with higher-fee versions. It improves confirmation reliability. Example: Fees are increased to speed confirmation.

Request-for-Quote (RFQ) – A process where buyers solicit price quotes before executing a trade. It is common in OTC markets. Example: Large trades request quotes privately.

Reserve Ratio – The portion of deposits a bank holds in reserve. Lower ratios enable more lending. Example: Banks lend most deposits.

Resistance – A price level where selling pressure tends to cap upward movement. Traders watch resistance closely. Example: Price struggles to break higher.

Risk-Free Rate – The theoretical return on an investment with no default risk. Government bonds are often used as proxies. Example: Treasury yields are used as benchmarks.

Round Amounts Heuristic – A blockchain analysis method that identifies likely payment outputs based on rounded values. It aids transaction tracing. Example: Rounded amounts signal payments.

Salability – The ease with which an asset can be exchanged for goods, services, or other assets without losing value. Strong money is highly salable. Example: Easily trading value for goods.

Salability Across Scale – The ability of money to be divided into very small units or combined into large amounts. Bitcoin’s divisibility down to satoshis enables this. Example: Paying tiny or massive amounts.

Salability Across Space – The ability to move value across borders quickly and reliably. Bitcoin can be sent globally without relying on banks. Example: Sending value worldwide instantly.

Salability Across Time – The ability of money to preserve value into the future. Bitcoin’s fixed supply supports long-term salability. Example: Saving value long-term.

Satoshi – The smallest unit of bitcoin, equal to one hundred millionth of a BTC. It enables fine-grained payments. Example: Buying items priced in sats.

Satoshi Nakamoto – The pseudonymous creator of Bitcoin who published the whitepaper in 2008. Their true identity remains unknown. Example: Bitcoin’s inventor remains anonymous.

Savings Account – A bank account that pays interest on deposited funds. Access and yields are typically limited. Example: Banks pay small interest on deposits.

Scarcity – The condition of limited supply relative to demand. Bitcoin’s scarcity is enforced by code. Example: Limited supply increases value.

Schnorr Signature – A digital signature scheme introduced with Taproot. It improves efficiency and privacy. Example: Multiple signatures appear as one.

Script Type Heuristic – An analysis method that infers transaction behavior based on script patterns. It is used in blockchain forensics. Example: Scripts reveal transaction types.

Script Witness – SegWit data containing signatures and scripts needed to spend outputs. It is stored separately from inputs. Example: Signature data is separated.

ScriptPubKey – The locking script in a Bitcoin output. It defines spending conditions. Example: Funds are locked by rules.

ScriptSig – The unlocking script that satisfies the ScriptPubKey. It proves authorization. Example: Spending provides valid signatures.

SEC Format – A standardized structure used for filings with the U.S. Securities and Exchange Commission. It ensures consistent disclosure. Example: Companies file reports uniformly.

Secp256k1 – The elliptic curve used by Bitcoin for cryptography. It underpins key generation and signatures. Example: Keys rely on this curve.

Securities and Exchange Commission (SEC) – The U.S. agency that regulates securities markets. It enforces disclosure and investor protection. Example: Markets follow SEC rules.

Security – A financial instrument representing ownership or debt. Securities are subject to regulation. Example: Stocks and bonds are securities.

Secure Element – A tamper-resistant chip designed to protect sensitive data like private keys. It acts as a hardened vault inside hardware wallets. Example: Keys are stored in protected chips.

Seed – The core data used to generate wallet keys. It is often represented as a mnemonic phrase. Example: One seed restores a wallet.

SegWit – A Bitcoin upgrade that separated signature data to increase capacity and fix malleability. It enabled later upgrades. Example: Transactions became more efficient.

Seigniorage – The profit earned from issuing currency at low cost. It accrues to the issuer. Example: Governments profit from printing money.

Self-custody – The practice of holding one’s own private keys. It removes reliance on third parties. Example: You control your own bitcoin.

Settlement – The final exchange of assets after a trade. Settlement completes the transaction lifecycle. Example: Assets officially change hands.

Settlement Finality – The point at which a transaction is considered irreversible. In Bitcoin, finality increases with confirmations rather than relying on trusted intermediaries. Example: More confirmations increase certainty.

SHA-256 – A cryptographic hash function used in Bitcoin mining and security. It ensures data integrity. Example: Mining relies on SHA-256.

Shamir Backup – A method of splitting a secret into parts that require a threshold to reconstruct. It improves backup security. Example: Multiple shares restore access.

Sharpe Ratio – A measure of risk-adjusted return. It compares excess returns to volatility. Example: Higher Sharpe means better risk-adjusted performance.

Short Selling – A strategy that profits from price declines by selling borrowed assets. It carries significant risk. Example: Selling high hoping to buy lower.

Short Squeeze – A rapid price rise caused by forced buying from short sellers. It can amplify volatility. Example: Shorts rush to cover positions.

Sidechain – A separate blockchain linked to a main chain. It enables experimentation and scaling. Example: Assets move between chains.

Sighash Flag – A parameter that defines which transaction components are signed. It controls signature scope. Example: Signatures cover selected fields.

Signature – A cryptographic proof that authorizes spending. It confirms ownership. Example: Valid signatures unlock funds.

Signet – A Bitcoin testing network that requires signed blocks. It provides controlled experimentation. Example: Developers test features safely.

Silent Payments – A proposed payment method that generates unique addresses without interaction. It improves privacy. Example: Receiving payments without address reuse.

SIM Swap – A fraud where attackers take control of a phone number. It is used to bypass security. Example: Accounts are hijacked via phone takeover.

Simplified Payment Verification (SPV) – A method allowing wallets to verify transactions without full nodes. It trades trust for efficiency. Example: Lightweight wallets verify headers only.

Single-Share Backup – A wallet backup stored as a single recovery share, commonly using SLIP39. It can later be upgraded into a multi-share setup. Example: One share restores access.

Slippage – The difference between expected and executed trade prices. It occurs in fast or illiquid markets. Example: Trades fill at worse prices.

Smart Contract – Self-executing code that enforces agreements automatically. Bitcoin supports limited contract logic. Example: Funds release when conditions are met.

Social Engineering – Manipulative tactics used to exploit human behavior. It is a major security risk. Example: Attackers trick users into sharing keys.

Soft Commodity – Agricultural goods like wheat or coffee. They differ from extractive resources. Example: Crops are soft commodities.

Soft Fork – A backward-compatible protocol upgrade. It tightens rules without splitting the network. Example: Nodes upgrade without chain split.

Software Wallet – A wallet application that runs on a phone or computer and connects to the internet. It offers convenience but less security than cold storage. Example: Mobile wallets trade security for ease.

Solvency – The ability to meet long-term obligations. Solvent entities can cover liabilities. Example: Assets exceed debts.

Sound Money – Money that reliably preserves value over time. Scarcity and durability are key traits. Example: Hard assets resist debasement.

Sovereignty – Control over one’s assets and decisions without reliance on intermediaries. Bitcoin enhances sovereignty. Example: No third party controls funds.

Sparse Merkle Tree – A cryptographic structure enabling efficient verification of large data sets. It supports scalability. Example: Large datasets are verified efficiently.

Splicing – A Lightning feature allowing channel balances to change without closing channels. It improves usability. Example: Channels adjust without closing.

Spot Price – The current market price for immediate settlement. It reflects real-time supply and demand. Example: Buying at today’s price.

Spread – The difference between bid and ask prices. It reflects liquidity and costs. Example: Tighter spreads signal liquidity.

Stablecoin – A digital asset designed to maintain a stable value. It often relies on pegs or reserves. Example: Tokens track fiat value.

Stagflation – A condition of stagnant growth paired with high inflation. It is difficult to manage. Example: High prices and weak growth coexist.

Stagnation – A period of minimal economic growth. It often includes high unemployment. Example: The economy stops expanding.

Statechains – A scaling method that allows off-chain transfer of bitcoin ownership. It preserves on-chain settlement. Example: Ownership moves without on-chain transactions.

Stock-to-Flow (S2F) – A model comparing existing supply to annual production. It is used to measure scarcity. Example: Lower flow increases scarcity.

Stop-Loss Order – An order that triggers a sale at a preset price. It limits downside risk. Example: Automatically selling to cap losses.

Store of Value (SOV) – A function of money that preserves purchasing power over time. It supports long-term saving. Example: Holding value across years.

Stratum V2 – An updated mining protocol improving security and decentralization. It gives miners more control. Example: Miners select transactions.

Stuckless Payments – A Lightning feature that reroutes payments if paths fail. It increases success rates. Example: Payments retry automatically.

Submarine Swaps – A technique enabling swaps between on-chain and Lightning payments. It supports interoperability. Example: Moving funds between layers.

Supply-Chain Attack – An attack that compromises software or hardware before delivery. It targets trust assumptions. Example: Malware inserted before installation.

Support – A price level where buying pressure tends to prevent further declines. Traders watch support zones. Example: Price bounces upward.

Surety Bond – A guarantee that contractual obligations will be met. It protects counterparties. Example: Guarantees back performance.

SWIFT System – A global messaging network used by banks for payment instructions. It does not move money itself. Example: Banks communicate payment details.

Swiss National Bank – Switzerland’s central bank. It manages monetary policy and currency stability. Example: The SNB manages the Swiss franc.

Sybil Attack – An attack where many fake identities are created to influence a network. Decentralized systems resist this. Example: Fake nodes attempt influence.

Taker – A trader who removes liquidity by executing existing orders. Takers pay spreads. Example: Hitting “buy now” and filling the best available ask.

Taproot – A Bitcoin upgrade that improves privacy and efficiency. It enables advanced scripting. Example: Complex transactions can look like simple ones on-chain.

Taproot Assets – A protocol for issuing assets on Bitcoin using Taproot. It anchors assets to Bitcoin security. Example: Issuing a token that ultimately settles on Bitcoin.

Tapscript – A scripting upgrade that expands Bitcoin’s expressiveness. It works alongside Taproot. Example: More flexible spending rules become possible.

Taro Asset Universe – An ecosystem of assets issued on Bitcoin using the Taproot Assets protocol. It enables scalable asset issuance secured by Bitcoin. Example: A growing set of Bitcoin-anchored assets that can move efficiently.

Tax Lot – A specific batch of an asset purchased at a certain time and price. Tax lots are used to calculate gains and losses. Example: Selling the “January buy” vs the “June buy” changes your tax outcome.

tBTC – A tokenized version of bitcoin issued on another blockchain and backed 1:1 by locked BTC. It allows bitcoin exposure in other ecosystems. Example: Using BTC value inside an Ethereum app via a wrapped token.

Technical Analysis – The practice of studying price charts and indicators to anticipate market behavior. It focuses on patterns rather than fundamentals. Example: Using moving averages and trendlines to time entries.

Testnet – A Bitcoin testing network where developers experiment without using real bitcoin. It mirrors mainnet behavior safely. Example: Sending “test coins” to practice without risking money.

Thiers’ Law – An economic principle stating that good money drives out bad when people are free to choose. It contrasts with Gresham’s Law. Example: If people can choose, they save in stronger money and spend weaker money less.

Throughput – The number of transactions a network can process over time. Bitcoin prioritizes security and decentralization, using additional layers to increase throughput. Example: Lightning boosts payments without forcing bigger blocks.

Tick Size – The minimum price movement allowed on a trading venue. It influences liquidity and execution. Example: A stock that can only move in $0.01 increments.

Time Preference – The degree to which people value present consumption over future consumption. Lower time preference favors saving and long-term thinking. Example: Choosing to save and invest instead of spending immediately.

Time-Weighted Average Price (TWAP) – An average price calculated over a defined time window. It is used to execute large trades gradually. Example: Buying slowly over hours to avoid moving the market.

Timechain – A term emphasizing Bitcoin’s blockchain as an immutable, chronological ledger. It highlights time as a core feature of Bitcoin. Example: Bitcoin acts like a public clock that orders history.

Timelock – A restriction that prevents bitcoin from being spent until a certain time or block height. It enables delayed and conditional spending. Example: Funds can be locked until a future date.

Too Big to Fail – The belief that some institutions are so large their collapse would threaten the system. It often justifies bailouts. Example: Governments rescuing major banks during a crisis.

Tor Network – A privacy network that routes internet traffic through multiple nodes. It obscures user identity and location. Example: Broadcasting Bitcoin transactions without exposing your IP address.

Toxicity – A measure of how harmful informed trading flow is to liquidity providers. High toxicity increases trading costs. Example: Market makers widen spreads when they think they’re trading against insiders.

Transaction – A transfer of bitcoin between addresses recorded on the blockchain. Transactions move value under consensus rules. Example: Sending bitcoin from your wallet to a friend’s wallet.

Transaction ID (txid) – A unique hash identifying a Bitcoin transaction. It is used to track and reference activity. Example: Copying a txid to prove a payment was sent.

Treasury Bill (T-Bill) – A short-term U.S. government debt instrument. It is often used as a risk-free benchmark. Example: Parking cash in 4-week T-bills for a baseline yield.

Trust – Reliance on another party to act honestly without enforcement. Bitcoin minimizes the need for trust. Example: Self-custody means you don’t rely on a bank to hold your money.

Trustee – A person or entity legally responsible for managing assets for beneficiaries. Trustees have fiduciary duties. Example: A trustee managing a family trust’s investments.

Trustless – A system design that removes reliance on intermediaries. Cryptography and consensus enforce rules. Example: Bitcoin settles without needing a bank’s permission.

Turing Completeness – The ability of a system to perform any computation given enough resources. Bitcoin intentionally limits this. Example: Bitcoin avoids “anything goes” scripting to reduce risk.

U.S. Treasury – The U.S. government department responsible for finances and debt issuance. It manages federal money operations. Example: The Treasury issues bonds to fund government spending.

Unbanked – People without access to traditional banking services. Bitcoin offers an alternative financial rail. Example: Someone can store and send value with only a smartphone.

Underbanked – Individuals with limited access to financial services despite having a bank account. They face friction and fees. Example: Relying on payday lenders despite having a checking account.

Uniform Commercial Code (UCC) – A standardized set of U.S. laws governing commercial transactions. It provides legal consistency. Example: Rules for secured lending and collateral in business deals.

Unit of Account – A function of money used to price goods and services. It provides a shared measurement system. Example: Pricing a coffee at $4 instead of quoting it in ounces of gold.

Unix Timestamp – A time format counting seconds since January 1, 1970 (UTC). It is used widely in computing. Example: Systems log events using Unix time like 1700000000.

Unspent Transaction Output (UTXO) – A portion of bitcoin that has not yet been spent. UTXOs are the building blocks of transactions. Example: Your wallet balance is really a set of separate “chunks” you can spend.

Uptime – The amount of time a system remains operational. High uptime reflects reliability. Example: A mining site targeting 99% uptime to maximize revenue.

User-Activated Soft Fork (UASF) – A Bitcoin upgrade method enforced by users rather than miners. It emphasizes user sovereignty. Example: Nodes enforcing new rules even if miners resist.

UTC – Coordinated Universal Time used as a global time standard. Bitcoin timestamps rely on UTC. Example: Block times are referenced in UTC worldwide.

Utreexo – A proposed data structure that compresses the UTXO set. It reduces node storage requirements. Example: Running a node with much less disk space.

UTXO Set – The full collection of all unspent outputs in the Bitcoin network. It represents spendable supply. Example: Nodes track the UTXO set to know what coins can be spent.

Vanity Address – A custom Bitcoin address with chosen characters. It is generated through repeated attempts. Example: An address starting with “Jack…” created by brute force.

Variable Cost – A cost that changes with production or usage. Examples include energy and materials. Example: Electricity costs rising as you run more miners.

Vaults – Advanced Bitcoin custody structures using delays and multiple keys. They reduce theft risk. Example: A setup where stolen keys can’t move funds immediately.

vByte – A unit measuring Bitcoin transaction size under SegWit rules. It determines fee calculation. Example: Fees are quoted like “15 sats per vByte.”

Verifiability – The ability for anyone to independently verify system rules and transactions. Bitcoin is fully verifiable. Example: Running a full node to confirm the supply and rules yourself.

Virtual Currency – A digital representation of value used for exchange. It may or may not be decentralized. Example: Game credits or points can be “virtual currency.”

Volume – The total amount of an asset traded during a time period. Volume reflects activity and interest. Example: Higher volume often shows stronger market attention.

Volume-Weighted Average Price (VWAP) – An average price weighted by trade volume. It is used to assess execution quality. Example: Institutions compare fills to VWAP to judge performance.

vSize – A virtual size metric reflecting SegWit transaction weight. It influences fees. Example: A SegWit transaction can have a lower vSize and cheaper fee.

Wage-Price Spiral – A feedback loop where higher wages drive prices up, leading to further wage demands. It fuels inflation. Example: Raises lead to higher costs, which lead to demands for more raises.

Wallet – Software or hardware that stores private keys and manages bitcoin. Wallets enable sending and receiving. Example: A wallet app lets you receive and send bitcoin like a bank app, but you control the keys.

Wallet Import Format (WIF) – A standardized way to encode Bitcoin private keys. It simplifies key handling. Example: Importing a private key string into a wallet.

Watch-Only Wallet – A wallet that can monitor balances without holding private keys. It provides visibility without control. Example: Tracking a cold wallet’s balance on your phone safely.

Watchtower – A Lightning service that monitors channels for cheating. It broadcasts penalties if needed. Example: A service that protects you if someone tries to broadcast an old channel state.

Wealth – The accumulation of valuable assets that provide security and opportunity. Wealth supports long-term resilience. Example: Owning productive assets that support your family over decades.

Weekly Moving Average (WMA) – A price average calculated over a week. It smooths short-term volatility. Example: Traders watch the weekly average to spot trends.

Weight Unit – A SegWit measurement that limits block data to four million units. It governs capacity. Example: Block “weight” limits how many transactions fit.

Whale – An entity holding a large amount of an asset. Whales can influence market behavior. Example: A large holder moving coins can spook markets.

Whitepaper – A document explaining the design and purpose of a system. The Bitcoin Whitepaper launched the network. Example: Reading the Bitcoin whitepaper to understand the original design.

Window Guidance – A central bank strategy signaling policy intentions over a defined period. It shapes expectations. Example: The Fed hinting rates will stay high for “some time.”

Witness – SegWit transaction data containing signatures and unlocking information. It is stored separately. Example: SegWit moves signature data into the witness field.

Witness Script – The script that satisfies spending conditions in a SegWit transaction. It replaces ScriptSig. Example: Spending a SegWit multisig uses witness script data.

Wrapped SegWit – A SegWit format compatible with older wallets. It nests SegWit inside legacy structures. Example: Using a “3…” address for SegWit compatibility.

wtxid – A transaction identifier that includes witness data. It differs from the traditional txid. Example: SegWit transactions can be referenced by wtxid in some contexts.

ield – Income generated from an investment. Yield is often expressed as a percentage. Example: A bond paying 5% annual yield.

Yield Curve – A graph showing interest rates across maturities. Its shape reflects economic expectations. Example: An inverted curve can signal recession risk.

Yield Curve Control – A policy where a central bank targets specific interest rates. It uses asset purchases to enforce levels. Example: A central bank buying bonds to cap long-term rates.

Ypub (Extended Public Key) – An extended public key format for native SegWit wallets. It allows address generation without private keys. Example: Sharing a Ypub to generate receive addresses without spending access.

Zero Confirmation Channels – Lightning channels that allow payments before on-chain confirmation. They trade security for speed. Example: Using a channel immediately after opening it to save time.

Zero Knowledge Proof (ZKP) – A cryptographic method proving knowledge without revealing information. It enhances privacy. Example: Proving something is true without sharing the underlying data.

Zpub (Extended Public Key) – An extended public key format used for native SegWit address derivation. It supports modern wallets. Example: A Zpub can generate modern receive addresses while keeping keys private.