Glossary: Bitcoin Terms & Abbreviations
The most important Bitcoin terms and abbreviations, each with a translation and a short explanation. For answers to general questions, see our FAQ.
51% attack
Translation: German: "51%-Attacke"
Explanation: An attack scenario in which a single party controls more than half of the network's total computing power (hashrate) and could theoretically reverse its own transactions (double-spend). For Bitcoin, this is practically infeasible given the enormous, globally distributed computing power securing the network.
ASIC
Translation: Application-Specific Integrated Circuit
Explanation: Specialized computer chips built exclusively for Bitcoin mining, many times more efficient than off-the-shelf processors or graphics cards. Virtually all professional miners today run on ASIC hardware.
ATH (All-Time High)
Translation: German: "Allzeithoch"
Explanation: The highest price Bitcoin has ever reached in a given currency, usually US dollars or euros. A new ATH marks a price above every previous peak.
Blockchain
Translation: German: "Blockkette"
Explanation: A continuous, publicly viewable chain of data blocks in which every Bitcoin transaction ever made is cryptographically linked and stored immutably. Each new block references the previous one, which makes retroactive tampering practically impossible.
Cold storage / cold wallet
Translation: German: "kalte Aufbewahrung" / "Offline-Wallet"
Explanation: Storing the private key completely disconnected from the internet, for example on a hardware wallet or a paper printout. Considered the safest way to protect Bitcoin from online attacks such as hacks or malware.
Custodial / non-custodial
Translation: German: "fremdverwahrt" / "eigenverwahrt"
Explanation: With a custodial solution (e.g. on an exchange), a third party holds the private key for you; with non-custodial wallets, you control the private key yourself. Only self-custodied Bitcoin gives you full control in the sense of "not your keys, not your coins."
DCA (Dollar-Cost Averaging)
Translation: German: "Durchschnittskosteneffekt" / Sparplan-Strategie
Explanation: An investment strategy where a fixed amount is invested at regular intervals, regardless of the current price. This smooths out the average entry price and reduces the risk of investing a lump sum at the worst possible time.
Exchange
Translation: German: "(Kryptowährungs-)Börse"
Explanation: A platform where Bitcoin can be bought and sold for euros, dollars, or other cryptocurrencies. Exchanges regulated in the EU generally require identity verification (KYC).
Fiat currency
Translation: German: "Fiat-Währung", gesetzliches Zahlungsmittel
Explanation: Money issued by a state or central bank and legally recognized as a means of payment, e.g. the euro or US dollar, whose supply can be expanded without limit. We deliberately reserve the word "currency" for fiat money, since Bitcoin itself is (so far) not a state-recognized currency but a form of money.
FOMO
Translation: Fear Of Missing Out
Explanation: The emotional fear of missing out on a sharply rising price, which often drives investors into rushed purchases near a market top. A classic psychological pitfall in volatile markets.
FUD
Translation: Fear, Uncertainty, Doubt
Explanation: Negative, often unsubstantiated news or rumors, spread deliberately or unintentionally, intended or able to unsettle investors and push them into rushed selling.
Genesis block
Translation: German: "Ursprungsblock"
Explanation: The very first block of the blockchain, mined on 3 January 2009 by Bitcoin's creator, Satoshi Nakamoto. It embeds a Times newspaper headline about an imminent second bank bailout, a reference to the financial crisis that motivated Bitcoin's creation.
Halving
Translation: German: "Halbierung"
Explanation: An event hard-coded into the protocol that cuts the reward miners receive per new block in half roughly every four years (more precisely, every 210,000 blocks). This lowers the rate at which new Bitcoin is created, down to the total cap of 21 million.
HODL
Translation: No direct translation; colloquially "to hold"
Explanation: Originally a 2013 forum typo for "hold," now an established term for the strategy of holding Bitcoin for the long term regardless of short-term price swings, rather than selling.
Hot wallet
Translation: German: "heiße Wallet", Online-Wallet
Explanation: A wallet whose private key is stored on a device connected to the internet, such as a smartphone or desktop app. Convenient for everyday use, but more exposed to online attacks than cold storage.
KYC
Translation: Know Your Customer
Explanation: The legally required identity check that regulated exchanges and brokers must perform when opening an account, to prevent money laundering and fraud. Mandatory in the EU for all licensed crypto service providers.
Lightning Network
Translation: German: "Blitznetzwerk"
Explanation: A layer-2 network built on top of Bitcoin that opens payment channels between users, enabling near-instant, very low-cost transactions off the main blockchain. Designed primarily for small, everyday payments.
Mempool
Translation: German: "Speicherbereich für unbestätigte Transaktionen" (from "memory pool")
Explanation: The waiting area on every node where transactions that have been broadcast but not yet included in a block are held temporarily. Miners typically pick transactions with higher fees from the mempool first for the next block.
Mining
Translation: German: "Schürfen"
Explanation: The process by which specialized computers (see ASIC) create new blocks, confirm transactions, and earn newly created Bitcoin plus transaction fees as a reward. This simultaneously secures the entire network through proof-of-work.
Multisig
Translation: Multi-signature; German: "Mehrfachsignatur"
Explanation: A wallet setup in which a transaction is only valid once a set number of several possible private keys have signed it (e.g. 2 of 3). Increases security, since a single stolen or lost key is not enough on its own.
Node
Translation: German: "Knoten"
Explanation: A computer that runs the full Bitcoin software, independently verifies every rule, and keeps a copy of the blockchain. Thousands of independent nodes worldwide jointly ensure that no single party can unilaterally override the rules.
P2P (Peer-to-Peer)
Translation: German: "Rechner-zu-Rechner", gleichrangig vernetzt
Explanation: A network structure with no central server, where all participants communicate directly and as equals. The core principle on which the entire Bitcoin network is built.
Private key
Translation: German: "privater Schlüssel"
Explanation: A secret, randomly generated string used to sign transactions and thereby spend Bitcoin. Whoever knows the private key has full control over the associated Bitcoin. It must never be shared with anyone.
Public key / Bitcoin address
Translation: German: "öffentlicher Schlüssel" / Empfangsadresse
Explanation: Mathematically derived from the private key, publicly visible, and safe to share, for example to receive Bitcoin. Comparable to an account number, which, unlike the private key, grants no access to the funds.
RBF (Replace-By-Fee)
Translation: German: "Ersetzen durch (höhere) Gebühr"
Explanation: A feature that lets an unconfirmed transaction still sitting in the mempool be replaced by a new version with a higher fee, for example to speed up a stuck payment. Must be explicitly signaled by the original transaction.
Satoshi (sat)
Translation: Smallest unit of Bitcoin, named after its creator Satoshi Nakamoto
Explanation: One satoshi equals one hundred-millionth of a Bitcoin (0.00000001 BTC). Dividing Bitcoin into satoshis keeps very small, everyday-sized amounts practical even at a high Bitcoin price.
Seed phrase
Translation: German: "Wiederherstellungsphrase" (also: mnemonic)
Explanation: A sequence of usually 12 or 24 English words from which all of a wallet's private keys can be restored. Whoever holds the seed phrase can gain full access to the associated Bitcoin at any time, so it must be stored especially securely.
SegWit (Segregated Witness)
Translation: German: "abgetrennter Zeuge"
Explanation: A protocol upgrade activated in 2017 that moves signature data out of a transaction's core structure. This effectively creates more space per block, lowers fees, and fixed underlying technical issues that later innovations, such as the Lightning Network, depended on.
Sidechain
Translation: German: "Nebenkette"
Explanation: An independent blockchain connected to the Bitcoin main chain via a two-way link that can move Bitcoin back and forth. Allows experimentation with new features without changing the security rules of the Bitcoin main chain itself.
Taproot
Translation: No German equivalent; proper name of the upgrade
Explanation: A protocol upgrade activated in 2021 that makes more complex transactions (e.g. multisig) nearly indistinguishable from ordinary ones on the blockchain. This simultaneously improves privacy, efficiency, and the possibilities for smart contracts on Bitcoin.
UTXO
Translation: Unspent Transaction Output
Explanation: Bitcoin's fundamental accounting unit: instead of a balance like at a bank, every wallet holds a collection of individual, not-yet-spent "bills" of different amounts, which are consumed when creating a new transaction. Your Bitcoin balance is simply the sum of all your own UTXOs.
Wallet
Translation: German: "Brieftasche" (digital)
Explanation: Software or hardware that manages private keys and thereby grants access to the associated Bitcoin. It doesn't actually contain "coins" in a physical sense. It stores only the key that grants access to the balances recorded on the blockchain.
Whitepaper
Translation: German: "Grundlagenpapier", Konzeptpapier
Explanation: The nine-page document "Bitcoin: A Peer-to-Peer Electronic Cash System," published by Satoshi Nakamoto on 31 October 2008, which first described how Bitcoin works and still forms the network's technical foundation today.