Glossary
Every key term from the course, in plain language. Hover the highlighted words inside lessons for the same definitions in context.
- 51% attack
- An attempt to rewrite recent history by controlling the majority of mining power — prohibitively expensive brute force, not a clever hack.
- address
- What you share to receive bitcoin — derived one-way from a public key, so it’s safe to publish.
- altcoin
- Any cryptocurrency other than Bitcoin. Most have a company, foundation, premine, or changeable rules that Bitcoin deliberately lacks.
- Austrian economics
- A school of thought favouring sound, non-inflatable money and minimal central control of it.
- Bancor
- Keynes’s proposed neutral global money, rejected at Bretton Woods in favour of the US dollar.
- Base58Check
- The encoding (with a built-in checksum) that turns a hashed public key into a legacy “1…” or “3…” address.
- bech32
- The encoding for modern SegWit (“bc1q…”) and Taproot (“bc1p…”) addresses, with strong typo detection.
- block
- A batch of transactions plus a header, chained to the previous block’s hash; one is added about every ten minutes.
- block reward
- A miner’s total pay for a block: the block subsidy plus the fees of every transaction it contains.
- block subsidy
- The newly-minted bitcoin a miner earns for finding a block; it halves roughly every four years toward zero.
- blockchain
- A chain of blocks where each block’s hash is baked into the next, making the whole history tamper-evident.
- Cantillon effect
- Those closest to newly-created money benefit first, before prices rise — a hidden engine of inequality.
- CBDC
- A central bank digital currency: cash replaced by a database the central bank controls — and can monitor or freeze — directly.
- coinbase transaction
- The special first transaction in every block, which pays the miner the block subsidy plus all the block’s fees. It’s how new coins are born (no relation to the company).
- cold wallet
- Keys kept offline, never touching an internet-connected device — the vault.
- confirmation
- A transaction gains one confirmation for each block mined on top of the block that included it. Greater depth means greater finality.
- consensus
- The shared agreement, enforced by every node, on which chain is valid. No single copy is trusted — the rules are.
- cypherpunks
- The 1990s movement that used cryptography to defend privacy and tried for two decades to build digital cash.
- debasement
- Secretly reducing the real value of money, historically by mixing base metal into coins.
- deflation
- A fall in prices, often from a money whose supply cannot be expanded.
- difficulty adjustment
- Bitcoin’s automatic retuning (every ~2 weeks) of how hard mining is, keeping blocks about ten minutes apart no matter how much computing power joins.
- digital signature
- Proof, made with a private key, that authorises a specific message — verifiable by anyone with the public key, without revealing the key.
- double-spend
- Spending the same digital money twice — the core problem Bitcoin solved with no middleman.
- elliptic curve
- The trapdoor maths (secp256k1) that links a private key to its public key: instant forwards, infeasible to reverse.
- entropy
- The amount of genuine unpredictability behind a key — the ultimate source of its security.
- fiat
- Government-issued money backed by law and trust rather than any commodity like gold.
- fractional reserve
- Banking that holds only a fraction of deposits and lends out the rest — creating money in the process.
- full node
- Software that downloads and independently verifies every block and transaction against the consensus rules — “don’t trust, verify.”
- fungibility
- The property that every unit is interchangeable with every other, like one ounce of gold for another.
- genesis block
- The very first Bitcoin block, mined by Satoshi in January 2009 with a newspaper headline embedded in it.
- gold standard
- A monetary system in which paper money is redeemable for a fixed amount of gold.
- halving
- The roughly four-yearly event that cuts Bitcoin’s new-coin issuance rate in half, on the way to the 21-million cap.
- hardware wallet
- A small device that stores keys and signs transactions internally; the keys never leave it.
- hash function
- A one-way function that turns any data into a fixed-length fingerprint: easy forwards, effectively impossible to reverse.
- HASH160
- RIPEMD-160(SHA-256(x)) — the 20-byte hash a legacy or SegWit address is built from.
- HMAC
- A hash combined with a secret key, proving a message is both unchanged and authentic.
- hot wallet
- Keys on an internet-connected device — convenient but more exposed; the pocket.
- inflation
- A sustained rise in prices, usually driven by expanding the money supply — a hidden tax on savers.
- KYC
- “Know Your Customer” — rules requiring services to collect your identity documents before you can transact.
- Lightning Network
- A layer built on top of Bitcoin for instant, tiny, near-free payments, settling to the blockchain only when a channel is closed.
- mempool
- The “memory pool” — the waiting room where each node keeps valid but unconfirmed transactions until they’re mined.
- Merkle tree
- A tree of hashes that reduces all of a block’s transactions to a single fingerprint — the Merkle root — stored in the block header.
- mining
- The global competition to find a valid block hash by proof of work, which orders transactions and mints new coins.
- MMT
- Modern Monetary Theory — the view that a government issuing its own currency faces few hard limits on spending.
- multisig
- A wallet that needs several keys (e.g. 2 of 3) to spend, removing any single point of failure.
- nonce
- A “number used once” — in mining, the one field a miner keeps changing to search for a valid block hash.
- petrodollar
- The system of pricing oil in US dollars, which re-anchored global demand for the dollar after it left gold in 1971.
- private key
- A giant secret number that controls your coins — whoever holds it can spend them.
- programmable money
- Coins that carry their own spending rules in a small script — enabling multisig, escrow, timelocks, and Lightning.
- proof of work
- Securing the ledger by forcing anyone who adds to it to burn real energy on a hard puzzle. Costly to produce, trivial to check.
- pseudonymous
- Identified by an address rather than a name — not anonymous, but not directly you either.
- public key
- A value derived one-way from your private key that you can share freely; your address comes from it.
- reserve currency
- The currency other nations hold and settle trade in globally — today, mainly the US dollar.
- RIPEMD-160
- A 160-bit hash used, on top of SHA-256, to shorten a public key into an address (the pair is called HASH160).
- satoshi
- The smallest unit of bitcoin: one hundred-millionth of a BTC (0.00000001). Often shortened to “sat”.
- Satoshi Nakamoto
- The pseudonymous creator of Bitcoin, who published the whitepaper in 2008, released the software, and later vanished.
- seed phrase
- The 12 or 24 words that back up your whole wallet — every key is derived from them. Guard them with your life.
- SegWit
- “Segregated Witness”, a 2017 upgrade that moved signatures out of the transaction body, fixing malleability and adding capacity.
- self-custody
- Holding your own keys, so no bank or company can freeze, lose, or seize your money.
- SHA-256
- The specific 256-bit hash function Bitcoin uses throughout — for mining, block hashes, and transaction IDs.
- stock-to-flow
- The ratio of existing supply to yearly new supply — a measure of how “hard” a money is to inflate.
- Taproot
- A 2021 upgrade improving privacy and enabling more flexible spending conditions; its addresses start with “bc1p”.
- timelock
- A spending condition that prevents coins from moving until a chosen time or block height.
- transaction fee
- A small amount paid to miners to include your transaction, bid as a rate in satoshis per virtual byte (sat/vB). It’s simply inputs minus outputs.
- Triffin
- Robert Triffin, who named the impossible bind facing any national currency that is also the world’s reserve.
- UTXO
- Unspent Transaction Output — a discrete chunk of bitcoin locked to your key. Your balance is just the sum of your UTXOs; there are no account balances.