Bitcoin Security Glossary

Understanding Bitcoin terminology is the first step to securing your wealth. Each term includes security implications that matter for your self-custody setup.

B

Backup Verification

Backup verification is the process of testing that your seed phrase backups, multisig configurations, and recovery procedures actually work before you need them

Security Practices

Bech32

Bech32 is the address encoding format for native SegWit Bitcoin addresses, producing addresses that start with bc1. It offers better error detection, lower tran

Keys & Addresses

BIP (Bitcoin Improvement Proposal)

A Bitcoin Improvement Proposal (BIP) is a formal document proposing changes, standards, or informational guidelines for the Bitcoin protocol. BIPs follow a stru

Bitcoin Fundamentals

BIP-85

BIP-85 is a wallet standard for deriving child seeds, passwords, or entropy from one master seed. It lets a hardware wallet create separate backups for smaller

Keys & Addresses

BIP39

BIP39 is a Bitcoin Improvement Proposal that defines a standard method for generating mnemonic seed phrases from random entropy. It specifies a 2,048-word Engli

Keys & Addresses

Bitcoin

Bitcoin is a decentralized digital currency and payment network that operates without central authority. Created in 2009 by the pseudonymous Satoshi Nakamoto, i

Bitcoin Fundamentals

Bitcoin Standard

The Bitcoin Standard is an economic framework proposing Bitcoin as the foundation of a new global monetary system, analogous to the gold standard but with super

Economics & Culture

Block

A block is a batch of validated Bitcoin transactions bundled together with a header containing metadata, a timestamp, and a reference to the previous block. Blo

Bitcoin Fundamentals

Blockchain

The blockchain is Bitcoin's public, immutable ledger that records every transaction ever made on the network. It consists of an ordered chain of blocks, each cr

Bitcoin Fundamentals

Brain Wallet

A brain wallet is a Bitcoin wallet where the private key is derived from a memorized passphrase or sentence. The passphrase is hashed to produce the private key

Wallets & Storage

C

Chain Analysis

Chain analysis is the practice of tracing Bitcoin transactions on the public blockchain to de-anonymize users, identify fund flows, and link addresses to real-w

Privacy

Change Address

A change address is the address where leftover bitcoin is sent back to you in a transaction. Since UTXOs must be spent in full, the difference between the input

Transactions & Network

Clipboard Malware

Clipboard malware (also called a clipper) is malicious software that monitors your clipboard for cryptocurrency addresses and silently replaces them with addres

Security Practices

Coin Control

Coin control is the practice of manually selecting which specific UTXOs to use as inputs in a Bitcoin transaction. It gives users precise control over privacy,

Transactions & Network

CoinJoin

CoinJoin is a privacy technique where multiple users combine their Bitcoin transactions into a single transaction, making it difficult for blockchain observers

Privacy

Cold Storage

Cold storage means keeping Bitcoin private keys on a device that never connects to the internet. True cold storage requires an air-gapped hardware wallet that c

Wallets & Storage

Confirmation

A confirmation occurs when a Bitcoin transaction is included in a block that is added to the blockchain. Each subsequent block added after that block adds anoth

Transactions & Network

Consensus

Consensus in Bitcoin is the mechanism by which all network participants agree on the current state of the blockchain without a central authority. It is achieved

Bitcoin Fundamentals

CPFP

Child Pays for Parent (CPFP) is a fee-bumping technique where the recipient of an unconfirmed transaction creates a new high-fee transaction spending the unconf

Transactions & Network

Custodial Wallet

A custodial wallet is a Bitcoin wallet where a third party (exchange, company, or service) holds and controls the private keys on your behalf. You access your b

Wallets & Storage

D

dApp (Decentralized Application)

A decentralized application (dApp) is software that runs on a blockchain network rather than centralized servers. While dApps promise censorship resistance and

Crypto Concepts

Data Broker

A data broker is a company that collects, buys, and sells personal information such as names, phone numbers, addresses, relatives, property records, and behavio

Security Practices

Dead Man's Switch

A dead man's switch is an automated mechanism that triggers a pre-defined action — such as transmitting recovery instructions or releasing access to Bitcoin — i

Security Practices

Decentralization

Decentralization is the distribution of power, control, and decision-making across many independent participants rather than concentrating it in a single author

Bitcoin Fundamentals

DeFi (Decentralized Finance)

DeFi refers to financial applications built on blockchain smart contracts that aim to replicate traditional financial services without intermediaries. While the

Crypto Concepts

Derivation Path

A derivation path is the hierarchical route used to generate specific keys from a master seed in an HD wallet. It follows a standardized notation like m/84'/0'/

Keys & Addresses

Difficulty Adjustment

The difficulty adjustment is Bitcoin's automatic recalibration mechanism that occurs every 2,016 blocks (approximately two weeks). It adjusts the mining difficu

Bitcoin Fundamentals

Dollar-Cost Averaging (DCA)

Dollar-Cost Averaging is an investment strategy where you buy a fixed dollar amount of bitcoin at regular intervals regardless of price. DCA removes the stress

Economics & Culture

Duress Wallet

A duress wallet is a decoy wallet containing a small, sacrificial amount of bitcoin that you can surrender under physical threat. It protects your main holdings

Security Practices

Dust

Dust refers to extremely small amounts of bitcoin in UTXOs where the cost of spending them (transaction fees) would exceed or approach their value. These unecon

Transactions & Network

H

Halving

The halving is a programmed event that cuts the Bitcoin block reward in half every 210,000 blocks, approximately every four years. This mechanism enforces Bitco

Bitcoin Fundamentals

Hard Fork

A hard fork is a non-backward-compatible change to the Bitcoin protocol that makes previously invalid blocks valid. All nodes must upgrade to follow the new rul

Bitcoin Fundamentals

Hardware Wallet

A hardware wallet is a dedicated physical device designed to generate, store, and use Bitcoin private keys in an isolated environment. It signs transactions int

Wallets & Storage

Hash Rate

Hash rate is the total computational power being used to mine and secure the Bitcoin network, measured in hashes per second. A higher hash rate means more miner

Bitcoin Fundamentals

HD Wallet

A Hierarchical Deterministic (HD) wallet generates all keys and addresses from a single master seed using a tree-like structure. This means one seed phrase back

Keys & Addresses

HODL

HODL is a Bitcoin community term meaning to hold your bitcoin long-term rather than selling during price volatility. Originating from a famous 2013 misspelling

Economics & Culture

Hot Wallet

A hot wallet is a Bitcoin wallet where the private keys are stored on an internet-connected device. It provides convenience for frequent transactions but expose

Wallets & Storage

Hyperbitcoinization

Hyperbitcoinization is a theoretical tipping point where Bitcoin becomes the dominant global monetary standard, driven by voluntary adoption rather than governm

Economics & Culture

P

Paper Wallet

A paper wallet is a Bitcoin private key and address printed on a piece of paper. Once considered a cold storage method, paper wallets are now widely discouraged

Wallets & Storage

Passkey

A passkey is a phishing-resistant login credential stored on a device, password manager, or security key. It replaces passwords with public-key authentication,

Security Practices

Passphrase

A passphrase (sometimes called the 25th word) is an optional additional word or phrase added to a BIP39 seed phrase during key derivation. It creates an entirel

Keys & Addresses

Password Manager

A password manager stores unique passwords and recovery data in an encrypted vault. For Bitcoin holders, it protects the accounts around self-custody: email, ex

Security Practices

PayJoin

PayJoin (also called P2EP or Pay-to-EndPoint) is a privacy technique where both the sender and receiver contribute inputs to a Bitcoin transaction. This breaks

Privacy

Phishing

Phishing is a social engineering attack where adversaries impersonate trusted entities to trick victims into revealing sensitive information like passwords, see

Security Practices

Plausible Deniability

Plausible deniability in Bitcoin security means structuring your custody setup so you can credibly deny the existence of additional wallets or holdings. Using h

Security Practices

Privacy

Privacy is the practice of limiting who can connect your identity, addresses, balances, transactions, location, and habits. In Bitcoin, privacy protects both fi

Privacy

Private Key

A private key is a secret 256-bit number that grants complete control over the bitcoin associated with its corresponding address. It is the mathematical proof o

Keys & Addresses

Proof of Stake

Proof of Stake (PoS) is a consensus mechanism where validators are selected to create blocks based on the amount of cryptocurrency they have staked as collatera

Crypto Concepts

Proof-of-Work

Proof-of-work (PoW) is Bitcoin's consensus mechanism that requires miners to expend computational energy to find valid blocks. It creates an unforgeable cost to

Bitcoin Fundamentals

PSBT

A Partially Signed Bitcoin Transaction (PSBT) is a standardized format (BIP174) for constructing and passing unsigned or partially signed transactions between w

Wallets & Storage

Public Key

A public key is the cryptographic counterpart to a private key, derived through elliptic curve multiplication. It is used to generate Bitcoin addresses and veri

Keys & Addresses

S

Satoshi

A satoshi (sat) is the smallest unit of bitcoin, equal to 0.00000001 BTC or one hundred-millionth of a bitcoin. Named after Bitcoin's pseudonymous creator Satos

Bitcoin Fundamentals

Sats per vByte

Sats per vByte (sat/vB) is the standard unit for measuring Bitcoin transaction fee rates. It represents the number of satoshis paid per virtual byte of transact

Bitcoin Fundamentals

Script

Script is Bitcoin's stack-based programming language used to define the conditions under which bitcoin can be spent. Every transaction output contains a locking

Transactions & Network

Secure Boot

Secure boot is a firmware verification process that ensures only cryptographically signed and authorized code runs on a device when it starts up. In the context

Security Practices

Secure Element

A secure element is a tamper-resistant microchip designed to store cryptographic keys and perform signing operations in a protected environment. In Bitcoin hard

Wallets & Storage

Security Key

A security key is a physical authentication device, such as a YubiKey, that proves your identity to a website without relying on SMS codes. It is one of the bes

Security Practices

Seed Phrase

A seed phrase (also called a recovery phrase or mnemonic) is a human-readable sequence of 12 or 24 words that encodes the master secret from which all private k

Keys & Addresses

SeedXOR

SeedXOR is a method for splitting a Bitcoin seed phrase into multiple mnemonic parts using XOR. All parts are required to reconstruct the original seed, so it i

Wallets & Storage

SegWit (Segregated Witness)

Segregated Witness (SegWit) is a Bitcoin protocol upgrade activated in August 2017 that separates transaction signature data from the transaction structure. It

Bitcoin Fundamentals

Self-Custody

Self-custody means personally holding and controlling your own Bitcoin private keys without relying on any third party. It is the practice of being your own ban

Wallets & Storage

Shamir's Secret Sharing

Shamir's Secret Sharing (SSS) is a cryptographic scheme that splits a secret into multiple shares, where a defined threshold of shares is required to reconstruc

Keys & Addresses

Side-Channel Attack

A side-channel attack extracts secret information from a device by analyzing its physical emissions — power consumption, electromagnetic radiation, timing varia

Security Practices

SIM Swap Attack

A SIM swap attack occurs when an adversary convinces your mobile carrier to transfer your phone number to a SIM card they control. This allows them to intercept

Security Practices

Smart Contract

A smart contract is self-executing code deployed on a blockchain that automatically enforces the terms of an agreement. While altcoin platforms emphasize Turing

Crypto Concepts

Soft Fork

A soft fork is a backward-compatible upgrade to the Bitcoin protocol where new rules are a subset of the old rules. Non-upgraded nodes continue to function and

Bitcoin Fundamentals

Software Wallet

A software wallet is an application running on a computer or smartphone that manages Bitcoin keys and transactions. It can function as a standalone hot wallet o

Wallets & Storage

Sound Money

Sound money is money that possesses scarcity, durability, divisibility, portability, and fungibility — properties that allow it to reliably store and transfer v

Economics & Culture

Stablecoin

A stablecoin is a cryptocurrency designed to maintain a stable value by pegging to an external asset, typically the US dollar. While useful as a trading tool, s

Crypto Concepts

Stacking Sats

Stacking sats is the practice of regularly accumulating small amounts of bitcoin, measured in satoshis (sats) — the smallest unit of bitcoin (0.00000001 BTC). T

Economics & Culture

Store of Value

A store of value is an asset that maintains or increases its purchasing power over time. Bitcoin's fixed supply of 21 million coins, combined with growing deman

Economics & Culture

Supply Chain Attack

A supply chain attack compromises hardware or software during manufacturing, distribution, or update processes. In Bitcoin, this means tampered hardware wallets

Security Practices

T

Taproot

Taproot is a Bitcoin protocol upgrade activated in November 2021 (BIP340, BIP341, BIP342) that improves privacy, efficiency, and smart contract capabilities. It

Bitcoin Fundamentals

Timelock

A timelock is a Bitcoin script condition that prevents a transaction output from being spent until a specified time or block height has passed. Timelocks enable

Bitcoin Fundamentals

Token

A token is a digital asset created on an existing blockchain rather than having its own independent network. Unlike Bitcoin, which is a native asset secured by

Crypto Concepts

Tor (The Onion Router)

Tor is a decentralized anonymity network that routes internet traffic through multiple encrypted relays, hiding your IP address from the services you connect to

Privacy

Transaction Fee

A transaction fee is the amount of bitcoin paid to miners for including a transaction in a block. Fees are calculated based on the transaction's data size in vi

Bitcoin Fundamentals

Trick PIN

A trick PIN is an alternate hardware-wallet PIN that performs a special action, such as opening a decoy wallet, wiping the seed, looking blank, or adding a dela

Security Practices

Two-Factor Authentication (2FA)

Two-factor authentication adds a second verification layer beyond your password, requiring something you know and something you have. For Bitcoin security, hard

Security Practices

TXID

A TXID (Transaction ID) is a unique 64-character hexadecimal hash that identifies a specific Bitcoin transaction. It is computed by double-SHA256 hashing the se

Transactions & Network