Bitcoin & Crypto Glossary — Key Terms Explained

Bitcoin (BTC)

Bitcoin is the first decentralized digital currency, created in 2009. It runs on a public blockchain with no central bank, and its supply is capped at 21 million coins.

Blockchain

A blockchain is a public, append-only ledger maintained by thousands of computers worldwide. Each block of transactions is cryptographically linked to the previous one, making the history practically impossible to alter.

Satoshi

A satoshi is the smallest unit of Bitcoin: 0.00000001 BTC. There are 100 million satoshis in one bitcoin, named after Bitcoin’s pseudonymous creator, Satoshi Nakamoto.

Halving

The Bitcoin halving is a built-in event roughly every four years that cuts the reward miners earn for new blocks in half, slowing the creation of new bitcoin. It has historically preceded major bull markets.

Private key

A private key is the secret number that controls your bitcoin. Anyone who holds it can spend the coins, so it must never be shared — the principle behind "not your keys, not your coins".

Seed phrase

A seed phrase (recovery phrase) is a list of 12 to 24 words that backs up your wallet. Written down and kept offline, it can restore all your bitcoin if your device is lost or broken.

Cold wallet

A cold wallet stores your private keys offline, such as a hardware wallet like Ledger or Trezor. It is far safer from hackers than keeping coins on an exchange or phone app.

Hot wallet

A hot wallet is connected to the internet — an app or exchange wallet. It is convenient for spending but more exposed to hacking than cold storage.

KYC

KYC (Know Your Customer) is the identity verification that regulated exchanges require — usually a government ID and a selfie — before you can trade or withdraw funds.

Dollar-cost averaging (DCA)

Dollar-cost averaging means buying a fixed amount of bitcoin on a regular schedule regardless of price. It smooths out volatility instead of trying to time the market.

Network fee

A network fee is the small amount paid to miners to process your Bitcoin transaction. Fees rise when the network is congested and fall when it is quiet.

Mining

Mining is the process where specialized computers compete to add new blocks to the blockchain, securing the network and earning newly issued bitcoin plus transaction fees.

Hash rate

Hash rate measures the total computing power securing the Bitcoin network. A higher hash rate means a more secure network that is harder and more expensive to attack.

Peer-to-peer (P2P)

Peer-to-peer trading lets people buy and sell bitcoin directly with each other, often used in markets where bank transfers to exchanges are restricted.

Stablecoin

A stablecoin is a crypto token pegged to a stable asset such as the US dollar (for example USDT or USDC), used to hold value or trade without leaving the crypto market.

Limit order

A limit order executes only at a price you set, giving you control but no guarantee it fills. A market order, by contrast, buys or sells instantly at the current price.

Leverage

Leverage lets you trade with borrowed funds to amplify gains — and losses. High leverage can liquidate (wipe out) your position on a small price move, so it is risky for beginners.

All-time high (ATH)

ATH means all-time high — the highest price an asset has ever reached.

FOMO & FUD

FOMO is "fear of missing out", which drives buying near market tops; FUD is "fear, uncertainty and doubt", which drives panic selling. Both lead to emotional, costly decisions.

Self-custody

Self-custody means holding your own bitcoin in a wallet only you control, rather than leaving it on an exchange. It removes counterparty risk but makes you fully responsible for security.