Bitcoin glossary
The technical terms used on onlytwenty.one, each explained in a few sentences. Terms in the texts link here.
A
- Address
- A bitcoin address is the destination of a payment, comparable to an account number. It is calculated from your key without revealing it and, depending on its type, starts with 1, 3 or bc1. A built-in checksum makes almost every typo stand out before money is sent. More: Address check
- All-time highATH
- The all-time high is the highest price bitcoin has ever reached. We determine it from our own price history, separately for dollars and euros. Because the exchange rate moves, the two all-time highs do not always fall on the same day. More: All-time high
B
- Base rate
- The base rate states how often something happened in the past after a certain situation. If, for example, the price was higher twelve months after an RSI signal in 5 of 7 cases, the base rate is 5 of 7. With so few cases it is a rough guide, not a reliable probability. More: Bitcoin cycle
- BitcoinBTC
- Bitcoin is digital money that works without a bank or government. Thousands of computers worldwide keep a shared public ledger, the blockchain, and check every payment themselves. There will never be more than 21 million bitcoin.
- Block
- A block is a bundle of transactions added to the blockchain. On average a new block is found every ten minutes. The miner who finds it receives the block reward plus the fees of the transactions inside. More: Mempool
- Block height
- The block height is the sequence number of a block, counted from the first block of 2009, which is number 0. It serves as the blockchain's clock: the halving, for example, happens at fixed block heights, every 210,000 blocks. More: Halving
- Block rewardblock subsidy
- The block reward is the amount of new bitcoin paid to the miner of a block. It is the only way new bitcoin enters circulation. It halves roughly every four years at the halving and has been 3.125 bitcoin per block since April 2024. More: Halving
- Blockchain
- The blockchain is Bitcoin's public ledger. It consists of blocks linked in a fixed order; each block holds the payments of one stretch of time. The more blocks follow an entry, the harder it would be to change it; after a few blocks this is considered impossible.
C
- Circulating supply
- The circulating supply is the number of bitcoin created so far. It grows with every block by the block reward and slowly approaches the cap of 21 million, which will be reached around the year 2140. More: Halving
- Confirmation
- Confirmations count the blocks securing a transaction: the block that contains it and every block added after it. One confirmation therefore means the payment is in the blockchain. For larger amounts many people wait for six confirmations, which takes about an hour.
- Cycle
- The bitcoin cycle is a roughly four-year pattern that has so far appeared around every halving: a rise to a new all-time high, then a deep decline, then recovery. With so few repetitions it is open whether it continues. More: Bitcoin cycle
D
- Daily close
- The daily close is the last price of a calendar day. We use the last stored price before midnight UTC. Bitcoin trades around the clock and has no closing bell, so the daily close is a convention. More: About the data
- Difficulty
- The difficulty sets how hard the mining puzzle is. Every 2,016 blocks, roughly every two weeks, the network adjusts it so that a block is still found every ten minutes on average. If computing power has been added since the last adjustment, it rises; if computing power has left, it falls. More: Mining stats
- Dollar-cost averagingDCA
- With dollar-cost averaging you buy the same amount at fixed intervals, for example 100 dollars every month. At low prices that buys more bitcoin, at high prices less; your average cost is therefore never above the average of the purchase prices. It is also called a savings plan. More: DCA calculator
- Drawdowndistance from the all-time high
- The drawdown is how far the price sits below its previous peak, in percent. A drawdown of -50% means the price has halved since the high. Bitcoin has had several drawdowns of more than -70% in its history. More: All-time high
E
- ECB reference rate
- The ECB reference rate is the exchange rate the European Central Bank publishes on every trading day, among others for the euro against the dollar. We use it to convert stored dollar prices to euros, day by day. On weekends and holidays the rate of the last trading day applies. More: About the data
- ETFMSCI World
- An ETF is a fund traded on the stock exchange that tracks an index, so it holds many shares at once. The MSCI World is such an index of around 1,400 large companies from developed countries. In the purchasing power explorer an ETF on this index stands for investing in stocks. More: Purchasing power explorer
- Exchange
- An exchange is a marketplace where buyers and sellers trade bitcoin for dollars, euros or other currencies. Well-known bitcoin exchanges include Coinbase, Kraken and Bitstamp. Each exchange has its own price, but the differences are usually small.
F
- Fear & Greed Index
- The Fear & Greed Index sums up the mood in the bitcoin market as a number from 0 (extreme fear) to 100 (extreme greed). It is computed by alternative.me from data such as price swings, trading volume and search interest. It describes sentiment, not the future price. More: Technical analysis
G
- Genesis block
- The genesis block is the very first block of the blockchain, created on 3 January 2009. Bitcoin began with it; our power-law model counts bitcoin's age from that day. More: Power law
H
- Halving
- The halving cuts the block reward in half every 210,000 blocks, roughly every four years. From then on only half as many new bitcoin enter circulation. The last halving was in April 2024, the next is expected in 2028. More: Halving
- Hashrate
- The hashrate is how many attempts all miners together make per second. It is quoted in exahashes per second (EH/s); one exahash is a quintillion attempts, a 1 with 18 zeros. The higher it is, the more computing power an attacker would need to rewrite the blockchain. More: Mining stats
I
- Inflationconsumer price index
- Inflation is the general rise in prices. It is measured with a consumer price index, which tracks the prices of a fixed basket of food, rent, energy and more. We use the Harmonised Index of Consumer Prices for the euro area (HICP) and the US Consumer Price Index (CPI). More: Purchasing power explorer
L
- Logarithmic scale
- A logarithmic scale is a chart axis on which the distance from 10 to 100 is the same as from 100 to 1,000. Equal distances therefore mean equal percentage changes. This makes the early, tiny bitcoin prices and today's prices readable in the same chart.
M
- MACD
- The MACD measures whether a price move is gaining or losing momentum. It is the difference between two exponential moving averages (EMA) over 12 and 26 days. The signal line is the 9-day average of the MACD itself; above it, upward momentum is building, below it, it is fading. More: Technical analysis
- Market capitalisationmarket cap
- Market capitalisation is the price times the circulating supply. It shows what all bitcoin together would be worth at the current price. But not all bitcoin could be sold at that price at once, because large sales push the price down. More: Dashboard
- Median
- The median is the middle value when all values are sorted by size. Unlike the average, single outliers barely move it. For the values 1, 2 and 100 the median is 2, the average about 34.
- Mempool
- The mempool is the waiting room for transactions that are not yet in a block. Miners usually pick the transactions paying the highest fee per vByte. When many transactions are waiting, fees rise; when few are, low fees are enough. More: Mempool
- Miner
- A miner runs computers for mining, usually in large facilities with cheap electricity. Most miners join mining pools: they compute together and share the reward according to their share of the computing power. More: Mining stats
- Mining
- Mining is creating new blocks, which is how payments enter the blockchain and new bitcoin come into existence. Specialised computers try trillions of numbers per second until one solves a given puzzle. The miner who finds a solution first may add the next block and receives the block reward. More: Mining stats
- Moving averageMA, EMA
- A moving average is the mean of the most recent prices, moving forward with every new price. MA 30, for example, is the average of the daily closes of the last 30 days. A variant, the exponential moving average (EMA), gives recent prices more weight. More: Technical analysis
N
- Nodefull node
- A node is a computer running the Bitcoin software. A full node stores the whole blockchain and checks every transaction and block against the rules itself. Our node map counts only nodes reachable from outside; many more run without being visible. More: Node map
- Nominal and realinflation-adjusted
- Nominal is an amount as it stands on paper. Real or inflation-adjusted means the amount has been converted to the prices of a given date so that amounts from different years can be compared. 100 dollars in 2015 are worth more in real terms than 100 dollars today. More: Purchasing power explorer
O
- Overbought and oversold
- Overbought means the price has risen unusually fast in a short time; oversold, that it has fallen unusually fast. It is usually read from the RSI: above 70 counts as overbought, below 30 as oversold. It does not mean the price is about to turn, only that the move was large for its duration. More: Technical analysis
P
- Power law
- The power-law model describes the long-term bitcoin price with a formula that depends only on bitcoin's age, counted from the genesis block on 3 January 2009. Plotting price and age on logarithmic axes, the prices lie roughly around a straight line, most of them within a band. It describes the past; it is not a law of nature. More: Power law
- Price
- The price is what one bitcoin is currently trading for, in dollars or euros. It forms on exchanges from supply and demand and changes around the clock, weekends included. More: Dashboard
- Private key
- The private key is a secret number you use to authorise payments from your addresses. With it, anyone can spend the associated bitcoin. Never show it to anyone or enter it on a website.
- Purchasing power
- Purchasing power is how much you can buy with an amount of money. When prices rise, purchasing power falls: 100 dollars buys less later than it does today. More: Purchasing power explorer
R
- Recovery phraseseed phrase
- The recovery phrase is a list of usually 12 or 24 words from which a wallet can regenerate all its keys. It is the backup of your bitcoin: anyone who knows it has full access. Write it down on paper and never enter it on a website.
- ReturnCAGR
- The return is the change in value of an investment, in percent. A yearly return of +100% means the price doubled during the year; -50% means it halved. The average return per year (CAGR) is the fixed yearly rate that, compounded, gives the same total return: +300% over two years becomes +100% per year, not +150%. More: Yearly returns
- RSIRelative Strength Index
- The RSI compares the average price gains of the last 14 days or weeks with the losses and sums this up in a number from 0 to 100. 50 means gains and losses balance out. Values above 70 show a fast rise, values below 30 a fast fall. More: RSI bottom
S
- Satoshisats
- A satoshi is the smallest unit of bitcoin: 1 bitcoin equals 100,000,000 satoshis. Because a whole bitcoin is expensive, many people count in sats day to day. The unit is named after Satoshi Nakamoto, the pseudonym of Bitcoin's still unknown inventor. More: Sats converter
- Savings account
- A savings account is an interest-bearing account you can withdraw from at any time. In the purchasing power explorer we credit it with the US federal funds rate or the ECB deposit rate; actual bank rates were often somewhat lower. More: Purchasing power explorer
- Seasonality
- Seasonality means that certain months have done better or worse than others on average. We start in 2013, so each month has only a dozen or so years to compare. A single strong year therefore shifts the average considerably. More: Seasonality
- Signature
- A signature proves that a message or payment comes from the owner of a certain private key, without revealing the key. Anyone can check it against the address. This lets you prove, for example, that an address belongs to you. More: Verify a message
- Support and resistance
- Support is a price zone where falls recently came to a halt, resistance one where rises ended. We take the nearest swing low below and the nearest swing high above the current price from the last 30 daily closes. Nothing is guaranteed: the price can break through either at any time. More: Technical analysis
T
- Trading volume
- Trading volume is the value of all bitcoin bought and sold on exchanges within a period, usually quoted for 24 hours. High volume means many people are trading; a price move on high volume is considered more meaningful. More: Dashboard
- Transaction
- A transaction is a bitcoin payment from one or more addresses to one or more others. It counts as confirmed once it is included in a block. Every block added after that makes it harder to reverse.
- Transaction feesat/vB
- The transaction fee is paid by the sender to the miner who includes the payment in a block. It depends not on the amount but on the data size of the transaction. It is quoted in satoshis per vByte (sat/vB); the more you offer per vByte, the sooner a miner will include the payment. More: Fee calculator
U
- UTC
- UTC is the world time that all time zones are defined against. It has no daylight saving time. London is on UTC in winter and one hour ahead in summer; Central Europe is one hour ahead in winter and two in summer. More: Volatility clock
V
- vBytevirtual byte
- The vByte is the unit used to measure a transaction's data size for the fee. Since the 2017 SegWit upgrade, signatures count only one quarter, so a transaction is smaller in vBytes than in real bytes. A simple payment from an address starting with bc1q is around 140 vBytes. More: Fee calculator
- Volatility
- Volatility describes how strongly a price fluctuates. High volatility means large swings up and down in a short time. Our volatility clock measures it as the average gap between the highest and lowest price within an hour, in percent. More: Volatility clock
W
- Wallet
- A wallet is an app or device that manages your private keys. The bitcoin themselves are recorded in the blockchain; the wallet only holds the key that lets you spend them. If the key and the recovery phrase are lost, the bitcoin can no longer be reached.