Glossary

An encoding of a locking script (or a witness program) that tells the payer which spending conditions to attach to the output. Modern addresses use bech32/bech32m encoding with a built-in checksum.

An 80-byte header plus a transaction list. The header commits to the previous header hash and a Merkle root, and must hash below the current target.

Height determines the block subsidy era and the timing of consensus changes activated by height rather than by time.

Started at 50 BTC and halves every 210,000 blocks via integer division, reaching zero after 33 halvings. Distinct from transaction fees, which are also paid in the coinbase transaction.

An append-only chain of block headers, each committing to its predecessor. Nodes follow the valid chain with the greatest cumulative proof of work.

Inputs must be consumed in full, so wallets add an output to a freshly derived internal address. Poor change handling is a common privacy leak.

Confirmations are a probabilistic measure of settlement finality: reversal requires re-mining every block above yours faster than the network extends the chain.

A value relative to the genesis target, encoded compactly as nBits in the header. Higher difficulty means a lower target hash threshold.

Each node computes the new target from the timespan of the previous 2,016 blocks, clamped to a factor of four in either direction.

Miners maximise revenue per weight unit, so sat/vB, not the absolute fee, determines priority. vsize equals weight divided by four.

Bitcoin uses SHA-256 (twice for block headers) and RIPEMD-160 in some address types. Hashes are one-way: you cannot derive input from output.

Derived statistically from difficulty and observed block intervals. Short observation windows produce noisy estimates.

Payment channels secured by pre-signed Bitcoin transactions and time locks. Public channel data understates the network because private channels are not announced.

There is no single global mempool. Every node keeps its own set subject to its own relay policy and memory limits.

Miners order transactions and extend the chain. They cannot create invalid blocks, spend coins they do not control, or alter consensus rules unilaterally.

Enforced by the output's spending conditions. It removes single points of failure but requires a documented, tested recovery plan.

A full node validates scripts, supply, weight limits and timestamps. Running one is how a user enforces the rules they accept.

A 32-bit field, exhausted almost instantly by modern hardware; miners then vary the timestamp or the coinbase to refresh the search space.

A 256-bit scalar used to produce ECDSA or Schnorr signatures over the transaction. Usually derived from a seed rather than stored individually.

A header hash below the current target. Cheap to verify, expensive to produce, which is what makes reordering history costly.

A point on the secp256k1 curve derived from the private key. Addresses commit to it or to a script containing it.

The protocol accounts in satoshis using 64-bit integers; 'BTC' is only a display convention.

A BIP-39 mnemonic encoding of entropy, optionally combined with a passphrase, from which a BIP-32 key tree is derived.

A signed structure of inputs (references to previous outputs plus witnesses) and outputs (amounts plus locking conditions).

Unspent transaction output. Nodes maintain the UTXO set as the authoritative state of who can spend what.

Derives keys from a seed, tracks the UTXOs it can spend, selects coins, estimates fees and signs. Watch-only wallets track addresses without any spending capability.