This glossary explains Bitcoin terminology: how the network works, how new coins are created, and what keys, addresses, and confirmations mean. For a complete introduction, read our guide to what Bitcoin is. For terms covering casino payments, bonus rules, and gambling risks, see our crypto gambling glossary.
0-B: From 51% attack to blockchain
51% attack
A 51% attack occurs when a single entity controls more than half of the total mining computing power. That entity could reverse its own transactions and spend the same coins twice, or keep other people's payments out of blocks. It could not steal other people's coins or create new bitcoin outside the rules. Bitcoin's enormous hashrate would make such an attack extremely expensive.
Altcoins
Altcoins are all cryptocurrencies other than Bitcoin - the term means “alternative coins.” The best-known examples include Ethereum, Litecoin, Solana, and Dogecoin. Many altcoins borrow ideas from Bitcoin but change the block time, consensus mechanism, or features.
ASIC
ASIC stands for “application-specific integrated circuit”: a chip built for a single task. Bitcoin ASICs calculate only SHA-256 hashes, but do so many times faster and more efficiently than processors or graphics cards. Since around 2013, they have effectively replaced ordinary computers in mining.
Confirmation
A confirmation indicates how deeply a transaction is recorded in the blockchain. Once it is included in a block, it has one confirmation; each subsequent block adds another. The more confirmations it has, the less likely a reversal becomes. For large amounts, six confirmations - about an hour - are considered standard. Casinos and exchanges set their own confirmation requirements before crediting a deposit.
Bitcoin address
A Bitcoin address is the destination for a payment, comparable to an account number. It is derived from a public key. The beginning tells you its format: addresses starting with “1” are older legacy addresses, “3” indicates P2SH addresses, “bc1q” indicates native SegWit addresses, and “bc1p” indicates Taproot. Wallets usually generate a new address for each payment to protect your privacy.
Bitcoin Core
Bitcoin Core is the Bitcoin network's reference software and the direct successor to Satoshi Nakamoto's original program. Until 2014, it was called Bitcoin-Qt. Bitcoin Core is a full node with an integrated wallet: the software downloads the entire blockchain and checks every rule itself. Volunteers around the world develop it openly.
Bitcoin Price Index (BPI)
The Bitcoin Price Index was an early benchmark from CoinDesk that averaged prices across several exchanges. Today, CoinDesk Indices maintains a comparable index under the ticker XBX. It weights exchanges by liquidity and serves as a basis for financial products. Read more about pricing in how Bitcoin's price is determined.
Block
A block is a package of verified transactions. Its header includes the previous block's hash, a timestamp, and a number called the nonce, which miners keep changing until the block's hash falls below the target value. A new block is created every ten minutes on average. Since the SegWit update, its size has been capped by a weight limit of four million units.
Block reward
The miner who finds a new block receives the block reward. It consists of newly created bitcoin, called the block subsidy, plus the fees from every transaction in the block. The subsidy started at 50 BTC in 2009 and halves every 210,000 blocks: to 25 in 2012, 12.5 in 2016, 6.25 in 2020, and 3.125 BTC in April 2024.
Blockchain
The blockchain is the chain of all blocks since the genesis block on January 3, 2009. Each block references its predecessor through a hash, so an old entry cannot be changed unnoticed. The blockchain acts as a public ledger: each node stores a complete copy, and anyone can look up any transaction in a block explorer.
C-H: From client to hashrate
Client
A client is software you use to communicate with the Bitcoin network. Full clients such as Bitcoin Core download the entire blockchain and verify everything themselves. Lightweight clients, including most smartphone wallets, request data from other nodes to save storage space, but must place some trust in those nodes.
Difficulty
Difficulty determines how hard it is to find a valid block. The network adjusts it every 2,016 blocks, or roughly every two weeks: if blocks arrive faster than every ten minutes, difficulty rises; if they arrive more slowly, it falls. This keeps the issuance of new coins predictable, regardless of how many miners participate.
Double spending
Double spending is an attempt to spend the same coins twice. This was long the central problem with digital money without a central authority - after all, a file can be copied endlessly. Bitcoin solves it through the blockchain: the network agrees on a single valid order of transactions. Unconfirmed payments remain risky, so recipients wait for several blocks when larger amounts are involved.
Units: BTC, mBTC, and satoshis
One bitcoin can be divided into 100 million parts. The smallest unit is called a satoshi, or sat for short. Other common units include:
| Unit | Value in BTC | Value in satoshis |
|---|---|---|
| 1 BTC | 1 | 100,000,000 |
| 1 mBTC (millibitcoin) | 0.001 | 100,000 |
| 1 bit (µBTC) | 0.000001 | 100 |
| 1 satoshi | 0.00000001 | 1 |
Many casinos display balances in mBTC, while network fees are quoted in satoshis per virtual byte (sat/vB).
Faucet
A faucet gives away small amounts of bitcoin, usually in exchange for completing a task such as solving a CAPTCHA or watching an ad. In Bitcoin's early years, developer Gavin Andresen even distributed 5 BTC per person through his faucet to raise awareness of Bitcoin. Today, the amounts are tiny. Our guide to faucet casinos explains how casinos use them.
Fork
A fork is a change to, or split in, Bitcoin's rules. With a soft fork, older nodes remain compatible - this is how SegWit and Taproot were introduced. With a hard fork, a new, incompatible chain emerges if not everyone adopts the change. The best-known example is Bitcoin Cash, which split off on August 1, 2017.
Genesis block
The genesis block is the very first block in the Bitcoin blockchain, created by Satoshi Nakamoto on January 3, 2009. Its data contains a headline from the British newspaper The Times, published that day, about a second bank bailout. The 50 BTC reward from this block cannot technically be spent.
Halving
A halving cuts the reward for new blocks in half. It takes place every 210,000 blocks, roughly every four years - so far in 2012, 2016, 2020, and April 2024. Halvings reduce the supply of new coins and ensure that the total supply never exceeds 21 million BTC. The next halving is expected in 2028.
Hardware wallet
A hardware wallet is a small device that stores your private keys offline. Transactions are signed inside the device, and the keys never leave it - even an infected computer cannot read them. For larger amounts, a hardware wallet is considered the safest storage option. Buy one only directly from the manufacturer or an authorized retailer.
Hashrate
Hashrate measures how many hashes are calculated per second, either by a single device or across the entire network. Network hashrate is now measured in exahashes per second (EH/s), meaning quintillions of calculations per second. The higher it is, the more expensive an attack on the network becomes.
K-M: From nodes to mining
Node
A node is a computer running Bitcoin software and connected to other nodes. Full nodes store the entire blockchain, which takes up several hundred gigabytes, and check every transaction and block against the rules. Because thousands of independent nodes enforce the rules themselves, no single party can change them. You can run your own node on a small home computer.
Cryptography
Cryptography is the science of encryption and signatures. Bitcoin uses it in several ways: the SHA-256 hash function secures blocks and mining, RIPEMD-160 shortens public keys into addresses, and signatures on the secp256k1 elliptic curve - ECDSA and, since Taproot, Schnorr - prove that you are authorized to spend your coins. The transactions themselves are not encrypted; they are public.
Lightning Network
The Lightning Network is a second layer built on top of the Bitcoin blockchain. Users open payment channels and send bitcoin back and forth in seconds for tiny fees; only opening and closing the channels is recorded on the blockchain. Lightning is particularly suited to small amounts. Read how casinos use it in Lightning explained.
Mempool
The mempool is the waiting area for transactions that have been sent but are not yet included in a block. Each node maintains its own mempool. Miners favor transactions with a high fee per byte. When the mempool is full, fees rise and low-fee payments wait longer. Our guide to stuck transactions explains what you can do.
Mining
Mining is the process of creating new blocks. Miners use specialized hardware to calculate SHA-256 hashes until one falls below the current target - this process is called proof of work. The successful miner receives the block reward and transaction fees. Mining also secures the network, because any manipulation would have to exceed the computing power of the honest majority. For more detail, read Bitcoin mining explained.
N-S: From network to Silk Road
Network
The Bitcoin network consists of all nodes worldwide connected through the internet. New transactions and blocks are passed from node to node until all know about them. There is no central server: if one node goes down, the others take over. The Bitcoin network is distinct from other networks that can carry Bitcoin tokens - always select the matching network when making a deposit.
Public key
The public key is calculated from the private key. This calculation works in only one direction: the private key cannot be recovered from the public key. The network uses your public key to verify your signatures, and your Bitcoin address is derived from it. You can safely share it.
Peer-to-peer (P2P)
Peer-to-peer means participants exchange data or value directly, without a central intermediary. Bitcoin is a peer-to-peer network: your payment does not go through a bank but is relayed and verified by equal-status nodes. The term appears in the whitepaper's title: “A Peer-to-Peer Electronic Cash System.”
Private key
A private key is a secret, 256-bit number you use to sign transactions. Anyone who knows it controls the associated coins - irreversibly. Modern wallets derive all keys from a seed phrase, so you only need to back up those words. Never share your private key or seed phrase, even with someone claiming to be support staff.
Protocol
The protocol is the set of rules that governs the Bitcoin network: how transactions are structured, when a block is valid, how large the reward is, and that there will never be more than 21 million BTC. Changes take effect only if enough nodes and miners voluntarily adopt the new software. Major upgrades in recent years include SegWit (2017) and Taproot (2021).
Satoshi Nakamoto
Satoshi Nakamoto is the pseudonym of the person or group that invented Bitcoin. Satoshi published the whitepaper on October 31, 2008, launched the network on January 3, 2009, and withdrew from public view in 2011. Their identity remains unproven. Estimates suggest Satoshi owns around one million BTC from Bitcoin's early days that have never been moved.
Seed phrase
A seed phrase, also called a recovery phrase, usually consists of 12 or 24 words from a fixed list. Your wallet uses it to generate all your keys. If you lose your device, these words let you restore access to all your coins on a new device. Record them offline on paper or metal, and never save them as a photo or in cloud storage. Read more about storing your seed phrase safely.
SegWit and Taproot
SegWit (“Segregated Witness”) was activated in August 2017. It separates signature data, increasing block capacity; it also made the Lightning Network practical. Taproot followed in November 2021 and introduced Schnorr signatures, which make complex transactions smaller and less distinctive. Both updates were soft forks, so older software remained compatible.
Signature
A digital signature proves that the private key's owner authorized a transaction without revealing the key itself. Every node can verify the signature using the public key. If someone changes even a single character in the transaction, such as the amount or recipient address, the signature becomes invalid.
Silk Road
Silk Road was an online black market on the dark web that operated from 2011 to 2013 and used bitcoin for payments. In October 2013, the FBI shut down the platform and seized large amounts of bitcoin. The case shaped Bitcoin's image as a “dark web currency” for years - and also showed that payments can be traced through the public blockchain.
T-Z: From transaction fees to wallets
Transaction fee
For each Bitcoin transaction, you pay a fee to the miner who includes it in a block. The fee depends not on the payment amount but on the transaction's data size and current demand, quoted in satoshis per virtual byte (sat/vB). Our guide to comparing crypto withdrawal fees explains how to compare fees when withdrawing.
UTXO
UTXO stands for “unspent transaction output.” Bitcoin does not track account balances, but rather many individual “coins” of different sizes. When you pay, your wallet uses suitable UTXOs as inputs and creates new ones: one for the recipient and usually one returning change to you. Having many small UTXOs makes later transactions larger and therefore more expensive.
Wallet
A wallet manages your keys - the coins themselves are recorded on the blockchain. Options include hot wallets as apps, cold wallets as hardware devices, and custodial wallets where an exchange holds the keys. With your own wallet, you alone are responsible for backups; with a custodial wallet, you trust the provider. Our guide to crypto wallets for casinos explains which wallets suit casino payments.
Bitcoin glossary FAQ
What is a satoshi?
A satoshi is the smallest unit of bitcoin: 1 BTC equals 100,000,000 satoshis. It is named after Bitcoin's creator, Satoshi Nakamoto. Network fees are usually quoted in satoshis per virtual byte (sat/vB).
What is the difference between a private key and a public key?
You use your private key to sign transactions; anyone who knows it controls the coins. The public key is calculated from it and is used to verify signatures and derive addresses. You can share your public key, but never your private key.
What happens during a Bitcoin halving?
A halving cuts the reward for new blocks in half. This happens every 210,000 blocks, roughly every four years. Since the halving in April 2024, miners have received 3.125 BTC per block; the next halving is expected in 2028.
Frequently asked questions
What is a satoshi?
A satoshi is the smallest unit of bitcoin: 1 BTC equals 100,000,000 satoshis. It is named after Bitcoin's creator, Satoshi Nakamoto. Network fees are usually quoted in satoshis per virtual byte (sat/vB).
What is the difference between a private key and a public key?
You use your private key to sign transactions; anyone who knows it controls the coins. The public key is calculated from it and is used to verify signatures and derive addresses. You can share your public key, but never your private key.
What happens during a Bitcoin halving?
A halving cuts the reward for new blocks in half. This happens every 210,000 blocks, roughly every four years. Since the halving in April 2024, miners have received 3.125 BTC per block; the next halving is expected in 2028.
