Bitcoin & sats glossary

37 terms

Address

Wallets

A string like bc1q… where bitcoin can be sent on-chain. Wallets generate a fresh address per payment to protect your privacy.

Bitcoin

Basics

A decentralized digital money network launched in 2009. Capital B usually means the network and protocol; lowercase bitcoin means the currency unit (BTC).

Block

Basics

A batch of transactions added to the blockchain roughly every 10 minutes. Each block references the previous one, which is what makes history hard to rewrite.

Blockchain

Basics

The public ledger of every Bitcoin transaction, stored as a chain of blocks that anyone can verify and no single party controls.

BTC

Basics

The ticker symbol for one bitcoin. Some wallets also show mBTC (0.001 BTC) or µBTC (0.000001 BTC, also called a 'bit').Bitcoin unit converter →

Cold storage

Wallets

Keys kept offline, usually on a hardware wallet. Recommended once your savings exceed what you would carry in your pocket.

Confirmation

Basics

Each block mined on top of your transaction. One confirmation is usually enough for small amounts; larger amounts often wait for three to six.

Custodial wallet

Wallets

A wallet where a company holds the keys for you. Easy to start, but you depend on that company staying solvent, online, and honest.Custody trade-offs →

DCA (dollar-cost averaging)

Market & use

Buying a fixed amount on a schedule instead of all at once, which smooths out the price you pay across market swings.

Fee (network fee)

Basics

What you pay miners to include your transaction, priced in sats per virtual byte — not as a percentage of the amount sent.

Halving

Basics

An automatic event every 210,000 blocks (~4 years) that cuts the new bitcoin issued per block in half, tightening supply until the 21 million cap is reached.

Hash rate

Basics

Total computing power securing the network, measured in hashes per second. Higher hash rate means a more expensive network to attack.

Invoice (BOLT11)

Lightning

A one-time Lightning payment request starting with lnbc… It encodes the amount, a description, and an expiry time.

KYC

Market & use

Know Your Customer — the ID checks exchanges run before letting you buy or withdraw. It links your identity to your transaction history.

Lightning Address

Lightning

An email-style identifier such as name@wallet.com that anyone can pay repeatedly, without asking you for a fresh invoice each time.

Lightning Network

Lightning

A payment layer on top of Bitcoin that settles transfers instantly for a fraction of a cent, ideal for coffee-sized payments.Pay over Lightning →

Liquidity

Lightning

How much a channel can send or receive in each direction. A business needs inbound liquidity to be able to get paid.Bitcoin for business →

LNURL

Lightning

A set of standards that let wallets fetch an invoice automatically — behind withdraw links, pay links, and Lightning Addresses.

Mempool

Basics

The waiting room of unconfirmed transactions. When the mempool is busy, fees rise because miners pick the highest-paying transactions first.

Mining

Basics

The process where computers compete to add the next block by spending energy on proof-of-work, earning the block subsidy plus transaction fees.

On-chain vs off-chain

Basics

On-chain payments settle in a block and cost a network fee. Off-chain payments (like Lightning) move value between participants and settle on-chain later.

P2P trading

Market & use

Buying or selling directly with another person through an escrow marketplace, instead of through a centralized exchange order book.Buying Bitcoin in Mexico →

Payment channel

Lightning

A two-party balance opened on-chain. Both sides can update it thousands of times off-chain and only settle the final balance on-chain.

Point of sale (POS)

Market & use

The checkout tool that turns a fiat price into a Lightning invoice and confirms the payment on the spot for a merchant.Accept sats in store →

Private key

Wallets

The secret number that authorizes spending from an address. Whoever knows it controls the funds — that is why it never leaves your wallet.

Public key

Wallets

Derived from the private key and safe to share. Addresses are generated from public keys so people can pay you without exposing anything secret.

QR code

Wallets

A scannable image encoding an address or invoice. Scanning avoids typos — Bitcoin payments cannot be reversed if you send to the wrong place.How to pay with sats →

Routing

Lightning

Lightning finds a path of connected channels from payer to payee. Intermediate nodes forward the payment and earn tiny routing fees.

Satoshi (sat)

Basics

The smallest unit of bitcoin: 0.00000001 BTC. One bitcoin equals 100,000,000 sats, which makes sats the practical unit for everyday prices.Sats to fiat converter →

Sats per dollar

Market & use

How many sats one unit of fiat buys right now. At $100,000 per BTC, one dollar is 1,000 sats — the number falls as the price rises.Live sats converter →

Seed phrase

Wallets

12 or 24 words that regenerate every key in your wallet. Write them on paper or metal, never in a photo, cloud note, or chat.

Self-custody (non-custodial)

Wallets

You hold the private keys yourself. No one can freeze or seize your funds, and no one can restore them if you lose the backup.

Stablecoin

Market & use

A token pegged to a fiat currency like the dollar. Useful for holding a stable balance, but it depends on the issuer, unlike bitcoin.

UTXO

Basics

Unspent Transaction Output — a discrete chunk of bitcoin your wallet controls. Wallets combine UTXOs like coins and bills to build a payment.

Volatility

Market & use

How sharply the bitcoin price moves. Merchants who price in fiat and settle instantly over Lightning barely feel it.

Wallet

Wallets

Software or hardware that stores your keys and builds transactions. The wallet holds keys, not coins — the coins live on the blockchain.Wallet comparison →

Zap

Lightning

A small Lightning tip, popularized on Nostr. Usually a few hundred or thousand sats sent as a reaction to content.