Chapter 9

Quick Words

You do not need much jargon to use Bitcoin, but a few words are worth keeping straight. Some of these appeared in the book. Others you will encounter on explorers, in wallet settings, and in conversations as you keep learning.

Wallet

The app or device that manages the keys you use to receive and send Bitcoin.

Seed phrase

The backup words (usually 12 or 24) that can restore the wallet if the phone or device is lost. Sometimes called a recovery phrase or mnemonic.

Private key

The secret that lets you sign transactions. The seed phrase generates this. Never share it.

Signature

The mathematical proof that a transaction was authorized by the holder of the private key. Like a wax seal: anyone can verify it, but only the key holder can create it.

Address

A receive destination. Safe to share for getting paid. Generated from the public key.

Transaction

A signed message that instructs the network to move value from one address to another.

Fee

The small amount attached to a transaction to pay for processing. Paid by the sender, like postage.

Confirmation

The stage where a transaction has been included in a block and is much harder to unwind. One confirmation means it is in the most recent block. More confirmations mean more blocks have been added on top.

Block

A batch of transactions that has been verified and added to the ledger. New blocks are added regularly.

Mempool

The waiting room. Transactions sit here after being broadcast and before being included in a block. When your wallet says “pending,” this is usually where the transaction is.

Memo (OP_RETURN)

A short message attached to a transaction. It is stored on the public ledger alongside the payment. Sometimes called an OP_RETURN output. Useful for receipts, labels, or lightweight records.

Smart contract

A set of rules embedded in a transaction that the network enforces automatically—for example, requiring multiple signatures or releasing funds after a certain date. No intermediary needed.

Satoshi (sat)

The smallest unit of Bitcoin. One bitcoin equals 100,000,000 satoshis. Most beginner transactions are measured in satoshis, not whole coins.

UTXO

Unspent transaction output. You may see this in wallet settings. It is the technical name for a chunk of value you can spend—think of it as an unbroken bill in your wallet.

Change address

When you spend part of a UTXO, the leftover goes back to you at a new address. This is automatic. It is like paying with a $20 bill and getting change.

Ticker

The short label for a network or asset, such as BTC, BCH, or BSV.

Explorer

A read-only website or tool for checking what the network sees. Paste a transaction ID or address to look up details.

Custodial

Someone else holds the keys for you.

Non-custodial

You hold the keys and the backup responsibility yourself.

Ledger

The shared record of all transactions. Public and distributed across many computers.

If you can explain these words in plain language, you are already past the beginner fog.