The Lexicon

A string of characters that identifies a destination on the Bitcoin network — the equivalent of an account number, except anyone can have as many as they like. People send bitcoin to your address; no one can spend from it without the matching private key. Sharing an address is safe. Sharing the private key is not.

A peer-to-peer monetary network and the asset it issues. Bitcoin (uppercase B) usually refers to the network and protocol; bitcoin (lowercase b) refers to the unit. There will only ever be 21 million bitcoin, a hard limit enforced by mining and the halving schedule.

The new bitcoin paid to a miner for adding a valid block to the blockchain. The reward is fixed for ~210,000 blocks (about four years), then cut in half. Each cut is a halving. The current reward is 3.125 BTC per block, down from 50 BTC at launch in 2009.

The shared ledger of all Bitcoin transactions, organized into time-stamped blocks linked in a chain. Every full node keeps its own copy and rejects anything that doesn't match. There is no central server; the blockchain is just thousands of independent computers agreeing on the same history.

Keeping a private key on a device that is not connected to the internet — usually a hardware wallet, occasionally a paper backup. Cold storage is what protects you against a remote attacker. The trade-off is that you have to physically be near the device to spend.

A transaction's status of having been included in a block. Each new block on top adds another confirmation. Most services treat one confirmation as final for small amounts; exchanges typically wait three to six before crediting a deposit.

The total amount you paid for the bitcoin you hold, in your home currency. If you bought 0.5 BTC across thirty buys for a total of $15,000, your cost basis is $15,000 — regardless of what bitcoin is worth today. The calculator shows your average cost basis after each backtest.

A service where someone else holds the private keys to your bitcoin. Exchanges, brokerage apps, and most "buy bitcoin in the app" features are custodial. You have an account balance; the platform has the coin. If the platform fails, your balance may not survive.

Dividing a fixed amount across recurring buys instead of investing all at once. Buy $100 of bitcoin every Friday for a year, and you have averaged into a position across 52 different prices. The point is not to beat the market; the point is to remove the decision of when to buy.

The peak-to-trough drop in portfolio value over a given window, expressed as a percentage. A 50% drawdown means your stack was once worth $20,000 and at the bottom was worth $10,000. Bitcoin's history is full of them. The calculator shows your worst day on paper for any backtest.

A platform that lets you trade fiat currency for bitcoin (and back). Some exchanges only sell bitcoin (River, Swan, Strike); most also list dozens of other crypto assets. Exchanges are custodial by default — you do not control the coin until you withdraw to a wallet you own.

The event, every ~210,000 blocks, where the block reward paid to miners is cut in half. The halvings have happened in 2012, 2016, 2020, and 2024. They are bitcoin's hard supply schedule made flesh — and the chart's most reliable structural marker.

A small dedicated device whose only job is to hold a private key offline and sign transactions when you plug it in. Ledger, Trezor, Coldcard, Foundation. A hardware wallet is the most common form of cold storage — and the cheapest insurance against exchange failure.

How much computation, per second, is being spent securing the Bitcoin network. Higher hash rate means more energy committed to mining honest blocks, which makes rewriting history harder. As of mid-2026 the network hashes at over 800 exahashes per second — 800 followed by eighteen zeroes.

Holding bitcoin through volatility instead of selling. The term originated as a typo on a 2013 forum post ("I AM HODLING") and stuck because it captures the strategy plainly. HODL is the opposite of trading. It is also, historically, what has worked.

Know-Your-Customer. The identity verification (ID upload, address, sometimes selfie) that regulated exchanges run before letting you trade. KYC links your real identity to your buying history. Some bitcoin services route around it; most do not. Whether that matters to you is a personal call.

A payment layer built on top of Bitcoin that settles transactions in milliseconds for fractions of a cent. Lightning is how you tip, pay for coffee, or send a few dollars cross-border without paying a network fee. The base layer is for settlement; Lightning is for spending.

Buying your entire position at once instead of dollar-cost averaging into it. Mathematically, lump-sum wins on average because markets trend up. Emotionally, it loses for many people because a single bad entry feels worse than thirty mediocre ones. The calculator shows both.

The waiting room of unconfirmed transactions. When you broadcast a bitcoin transaction, it sits in the mempool until a miner picks it up — generally within minutes, sometimes longer when fees are low. Mempool fee gauges are how you decide what to pay.

The process by which new blocks are added to the blockchain and new bitcoin is issued. Miners run specialized computers that race to solve a cryptographic puzzle. The winner gets the block reward plus the transaction fees in that block. Mining is what makes bitcoin's supply schedule real.

A service or wallet where you, and only you, hold the private keys. Hardware wallets, mobile wallets like Blue, Phoenix, and Zeus — these are non-custodial. You are responsible for backup and security; nobody can freeze, seize, or lose the coins on your behalf.

The secret number that lets you spend bitcoin from a given address. In practice you do not handle keys directly — your wallet derives them from a seed phrase. But the rule is absolute: whoever holds the private key controls the coin. Lose it and the coin is gone.

A standing order to buy a fixed amount of bitcoin on a fixed schedule — usually daily, weekly, or monthly. River, Swan, Strike, and Kraken all support recurring buys. It is the operational mechanism that turns dollar-cost averaging from a discipline into a setting.

Return on investment, expressed as a percentage. If you invested $10,000 and your stack is now worth $15,000, your ROI is +50%. The calculator reports ROI for every backtest. Past ROI does not predict future ROI — bitcoin's history is unusually generous, and a future generation may not get the same window.

The smallest unit of bitcoin: one hundred-millionth of a bitcoin (0.00000001 BTC). Named for Satoshi Nakamoto, bitcoin's anonymous creator. At $50,000 per bitcoin, one dollar buys 2,000 sats. The calculator reports sats-per-dollar in the live ticker for exactly this reason.

The twelve or twenty-four English words your wallet hands you on first setup. Those words are the human-readable form of your private key — anyone with them can restore the wallet on a different device. Write them on paper. Store them somewhere not on a screen. Never type them into a website.

The posture of holding your own private keys rather than trusting a custodial service to hold them for you. Self-custody is more work — you are now your own bank — but it is the only way to be certain the coin is yours. Not your keys, not your coins.

The gap between the price at which a platform will sell you bitcoin and the price at which it will buy bitcoin back. A 1% spread on a $100 buy is $1 — not nothing, especially compounded across years of recurring buys. River and Kraken Pro are usually tighter; Cash App and PayPal are usually wider.

Your accumulated bitcoin position, often denominated in sats. Stacking sats is the act of buying a little, regularly — the same discipline as dollar-cost averaging, in vernacular. The phrase signals time horizon: a stacker thinks in years, not weeks.

How much the price moves around. Bitcoin is structurally more volatile than stocks or bonds, which is the same fact that drives both its returns and its worst drawdowns. Volatility is not a bug or a feature — it is the price of admission for an asset still being priced by the market in real time.

Software (or hardware) that stores private keys and lets you send and receive bitcoin. Wallets do not literally hold the coin — the coin lives on the blockchain. They hold the keys that prove you can spend it. A hardware wallet is the same idea, in a small dedicated device.