Reference

Glossary

Air-gapped: A signing device that never connects to a computer or network by cable, Bluetooth or Wi-Fi. Data moves by QR code or microSD card instead, which shrinks the attack surface.Learn more →
BIP-39: The standard that turns a wallet's random secret into a list of 12 or 24 words from a fixed 2,048-word list, and defines the optional passphrase.BIP-39
Cold storage: Keeping private keys on a device or medium that is not exposed to the internet, typically a hardware wallet plus an offline seed backup.Learn more →
Derivation path: The route, written like m/84'/0'/0', that a wallet follows from the master key to a particular set of addresses.BIP-84
Difficulty adjustment: The recalculation every 2,016 blocks that keeps blocks about 10 minutes apart, limited to a factor of 4 per change.pow.cpp Learn more →
Entropy: The randomness used to create a seed. Weak entropy produces seeds an attacker can guess; that was the root cause of the 2026 COLDCARD thefts.Learn more →
Firmware: The software that runs on a hardware wallet. Update only through the maker's official app or signed files, and confirm the version on the device screen. Updating firmware does not repair a seed made by flawed firmware.Learn more →
Hardware wallet: A dedicated device that generates and stores private keys and signs transactions internally, so keys never touch your computer or phone.Learn more →
Master fingerprint: An 8-character identifier for a wallet's master key. Recording it lets you confirm a restore or a passphrase produced the right wallet.BIP-32
Mempool: The set of valid, unconfirmed transactions a node is holding while they wait to be mined. Each node keeps its own.bitcoin.org Learn more →
Multisig: A wallet that needs several keys to spend, for example any 2 of 3. It removes single points of failure but adds setup and backup complexity.BIP-11 Learn more →
Output descriptor: A short text string that describes exactly how a wallet derives its addresses: script type, keys and derivation paths. For multisig it is essential: without it, seeds alone may not be enough to find the coins.BIP-380 Learn more →
Passphrase (25th word): An optional extra secret combined with the seed to create a separate wallet. It protects against someone who finds only the seed; lose it and the funds are gone.BIP-39 Learn more →
Private key: The secret number that authorizes spending. Whoever holds it controls the coins.Learn more →
PSBT: Partially Signed Bitcoin Transaction: a standard file format that lets a watch-only wallet build a transaction and pass it to one or more signing devices.BIP-174 Learn more →
Replace-by-fee (RBF): Rebroadcasting an unconfirmed transaction with a higher fee so it confirms faster.BIP-125
Seed phrase: The 12 or 24 recovery words that can rebuild every key in a wallet. Write it by hand, move it to metal, and never photograph, type or cloud-store it.BIP-39 Learn more →
SegWit: An upgrade that moved signature data out of the main transaction body, lowering fees; native SegWit addresses start with bc1q.BIP-141
Self-custody: Holding the keys to your own bitcoin instead of leaving it with an exchange or other custodian.Learn more →
Single-sig: A wallet controlled by one key (one seed). Simpler than multisig, but the seed is a single point of failure.Learn more →
Taproot: An upgrade adding Schnorr signatures and a new address type (starting bc1p) with better privacy and flexibility.BIP-86
UTXO: Unspent transaction output: a discrete chunk of bitcoin your wallet can spend. Your balance is the sum of your UTXOs.Bitcoin developer guide: transactions
Watch-only wallet: A wallet on your computer that knows your public keys, so it can show balances and build transactions, but cannot spend without the hardware wallet.Learn more →
xpub (extended public key): A public key that can derive all of a wallet's receiving addresses. It cannot spend, but it reveals your full balance and history, so keep it private.BIP-32