bitcoin_vocab.md

Term	Definition	ELI5
Node	A computer in the Bitcoin network that keeps a record of transactions and helps validate new ones.	A helper computer that checks everyone is playing fair and keeps a copy of the money rules.
Blockchain	A chain of blocks where each block contains a list of transactions, secured with cryptography.	A big digital notebook where every page is locked to the one before it.
Proof-of-Work	A mechanism where computers solve a cryptographic puzzle: they guess a number (nonce) that, when combined with block data and hashed, produces a result starting with a specific number of zeros. This process secures the network, validates transactions, and makes tampering costly and impractical, ensuring trust without a central authority.	Computers play a hard puzzle game to add new pages to the notebook and get rewarded.
Hash	A unique digital fingerprint for data, created by running it through a special algorithm.	Like a secret code that represents your data. If anything changes, the code changes too.
Ledger	A record of all transactions; in Bitcoin, it's public and shared by all nodes.	A public list of every trade or payment made, so everyone can check it.
Double-Spending	A problem where the same digital money is spent more than once, prevented by Bitcoin's system.	Trying to pay two people with the same dollar. Bitcoin makes sure this can’t happen.
Public Key	Like a digital address you share so people can send you Bitcoin.	Your Bitcoin email address—share it so people can send you money.
Private Key	A secret code that lets you access and spend your Bitcoin.	The password for your Bitcoin wallet. Keep it secret, like your house key.
Transaction	The process of sending Bitcoin from one person to another.	Paying someone with Bitcoin.
Mining	Using computers to solve puzzles, validate transactions, and earn new Bitcoin as a reward.	Computers dig for new Bitcoin by solving hard puzzles.
Nonce	A random number miners change to solve the proof-of-work puzzle.	A guessing game number miners try until they find the right one.
Consensus	Agreement among nodes about the true version of the blockchain.	Everyone agreeing on which page of the notebook is the real one.
Decentralized	A system without a central authority; everyone shares responsibility.	No boss. Everyone works together to run the system.
Timestamp	A record of when a transaction happened, linked into the blockchain.	A time stamp, like a clock saying, “This happened at 3:00 PM.”
Merkle Tree	A data structure that organizes transactions for quick verification, using hashes.	A clever family tree of transactions that makes checking things super fast.
Block	A package of transactions that is added to the blockchain.	A page in the digital notebook where new payments are written.
CPU Power	The computing strength used by nodes to solve proof-of-work problems and validate blocks.	The brainpower of computers working to build the blockchain.
Difficulty	A measure of how hard it is to solve the proof-of-work puzzle, adjusted over time.	The game gets harder if people are solving puzzles too fast.
Broadcast	Sharing a message or transaction to all nodes in the network.	Sending a group text to everyone on the system.
Longest Chain Rule	The rule that the blockchain with the most work (longest chain) is considered the valid one.	The tallest tower wins because it took the most effort to build.
UTXO (Unspent Transaction Output)	The leftover Bitcoin from a transaction that can be spent later.	Like getting change back from a payment, which you can use next time.
Escrow	A process to temporarily hold funds until conditions are met, mentioned as a feature Bitcoin could enable.	Like a referee holding onto the ball until both teams are ready to play.
51% Attack	A situation where a group controls more than 50% of the network’s CPU power, letting them alter transactions.	If one team controls most of the game, they could rewrite the rules.
Reward	New Bitcoin earned by miners for adding a valid block to the blockchain.	The prize for solving the puzzle and adding a new page to the notebook.
Transaction Fee	A small amount of Bitcoin paid to miners to include a transaction in a block.	A tip you give to get your payment processed faster.
Fork	A split in the blockchain when nodes disagree about the next block.	Like two groups building separate towers because they argue about which brick to add next.