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Bitcoin Terminology
Your plain-English guide to the words, concepts, and ideas behind Bitcoin.
Bitcoin comes with its own vocabulary — and it can feel overwhelming at first.
Whether you've just heard the word "Bitcoin" for the first time, or you've been accumulating sats for years, this glossary is designed to help. We've grouped the most important terms into three levels — Introductory, Medium, and Expert — so you can start where it makes sense for you and build your knowledge from there.
You don't need to understand every term to start benefiting from Bitcoin wages. But the more familiar you become with the language, the more confident you'll feel making decisions about your financial future. Think of this page as a resource to return to — bookmark it, share it, and come back as your understanding grows.
Start here. These are the terms you'll encounter in everyday conversations about Bitcoin — whether you're opening your first wallet or explaining Bitcoin to a friend.
21 Million
The hard cap on the total supply of Bitcoin that will ever exist, enforced by the protocol. This fixed supply is one of Bitcoin's most important properties as a store of value.
Address
A string of letters and numbers that represents a destination for a Bitcoin payment — similar to a bank account number. You can share your address publicly without risk.
Bitcoin
The world's first decentralised digital currency, created in 2009 by the pseudonymous Satoshi Nakamoto. It operates without a central bank or single administrator, allowing peer-to-peer transactions over the internet.
Block
A batch of confirmed transactions grouped together and added to the blockchain approximately every 10 minutes. Each block references the one before it, forming the chain.
Blockchain
The public ledger that records every Bitcoin transaction ever made, organised into a chain of blocks. It is maintained by thousands of computers worldwide and cannot be altered or deleted.
Confirmation
Each time a new block is added to the blockchain after your transaction, it gains one confirmation. More confirmations mean greater certainty that the transaction cannot be reversed.
DCA (Dollar Cost Averaging)
An investment strategy of buying a fixed dollar amount of Bitcoin at regular intervals, regardless of price. It removes the pressure of timing the market and smooths out volatility over time.
Exchange
A platform where you can buy, sell, or trade Bitcoin using fiat currency or other cryptocurrencies. Examples include Coinbase, Kraken, and local Australian exchanges like BTC Markets.
Fiat Currency
Government-issued money not backed by a physical commodity — such as the Australian dollar or US dollar. Unlike Bitcoin, fiat supply can be expanded by central banks at any time.
HODL
A term originating from a misspelling of 'hold', meaning to keep your Bitcoin rather than sell it. It has become a philosophy among long-term Bitcoin believers.
Peer-to-Peer (P2P)
A system where two parties transact directly with each other, without a middleman such as a bank. Bitcoin is peer-to-peer by design — anyone can send Bitcoin to anyone, anywhere.
Private Key
A secret code that proves you own the Bitcoin associated with an address and authorises spending. Never share your private key — whoever holds it controls the funds.
Public Key
A cryptographic code derived from your private key that is used to generate your Bitcoin address. It can be shared openly and is used to verify signatures on transactions.
QR Code
A scannable barcode that encodes a Bitcoin address, making it easy to receive payments on a mobile device. Most wallets can generate and scan QR codes natively.
Satoshi (sat)
The smallest unit of Bitcoin, named after its creator. One Bitcoin equals 100,000,000 satoshis — useful for expressing small amounts without needing decimals.
Seed Phrase
A list of 12 or 24 words generated by your wallet that can recover all your Bitcoin if your device is lost. Store it securely offline — anyone with your seed phrase can access your funds.
Transaction
The transfer of Bitcoin from one address to another, broadcast to the network and recorded permanently on the blockchain. Every transaction includes a small fee paid to miners.
Transaction Fee
A small amount of Bitcoin paid to miners for including your transaction in a block. Fees fluctuate based on network demand — higher fees generally result in faster confirmation.
Volatility
The degree to which Bitcoin's price moves up or down over a given period. Bitcoin is more volatile than most traditional assets, which creates both risk and opportunity.
Wallet
Software or hardware that stores your Bitcoin private keys and lets you send and receive Bitcoin. It doesn't hold coins directly — it holds the keys that prove ownership on the blockchain.
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