Bitcoin & Crypto Glossary: Australian Beginner's Jargon Buster

Welcome to the world of Bitcoin! As you start your journey, you’ll quickly encounter a lot of new words, acronyms, and technical terms. This jargon can feel overwhelming at first, but understanding it is key to navigating the space confidently.

This glossary is designed specifically for beginners in Australia. We’ve explained common Bitcoin and cryptocurrency terms in simple language, helping you understand guides, news articles, and discussions more easily.

Use this page as your reference whenever you come across a word you don’t recognise. The terms are listed alphabetically.

Address (Bitcoin Address): A unique string of letters and numbers (starting with 1, 3, or bc1) that acts like a destination for sending or receiving Bitcoin. Think of it like your bank account number or email address, but specifically for Bitcoin transactions. You can share your public address freely to receive funds.
Altcoin: Short for “alternative coin,” meaning any cryptocurrency other than Bitcoin. Examples include Ethereum (ETH), Ripple (XRP), Cardano (ADA), Solana (SOL), etc. There are thousands of altcoins, varying widely in purpose and technology.
ATH (All-Time High): The highest price a cryptocurrency (like Bitcoin) has ever reached.
AUD (Australian Dollar): The official fiat currency of Australia, which you use to buy Bitcoin on local exchanges.
AUSTRAC (Australian Transaction Reports and Analysis Centre): The Australian government’s financial intelligence agency responsible for regulating cryptocurrency exchanges operating in Australia to prevent money laundering and terrorism financing. Reputable Australian exchanges are registered with AUSTRAC.

Bear Market: A period when the prices of assets (like Bitcoin) are generally falling, and market sentiment is pessimistic.
Bitcoin (BTC): The first decentralized digital currency, created in 2009 by the pseudonymous Satoshi Nakamoto. It operates on a peer-to-peer network using blockchain technology, allowing users to send and receive value without needing a traditional bank. BTC is the ticker symbol for Bitcoin.
Bitcoin (BTC) ETF: A Bitcoin ETF is a specific type of ETF designed to provide investors with exposure to the price movements of Bitcoin. Instead of holding shares or bonds, the fund’s primary asset is Bitcoin itself (in the case of a ‘spot’ ETF) or Bitcoin futures contracts (in the case of a ‘futures’ ETF).
Block: A batch of confirmed Bitcoin transactions that are grouped together and added to the blockchain. Each new block contains a reference (hash) to the previous block, forming a chain.
Blockchain: A distributed, immutable (unchangeable), and transparent digital ledger that records all Bitcoin transactions. It’s made up of a continuously growing list of blocks linked together using cryptography. Because it’s copied across many computers worldwide (distributed), it’s very secure and doesn’t rely on a single central authority.
Block Reward: The amount of new Bitcoin awarded to miners for successfully validating transactions and adding a new block to the blockchain. This reward (plus transaction fees) incentivizes miners to secure the network. The block reward halves approximately every four years (see Halving).
Bull Market: A period when the prices of assets (like Bitcoin) are generally rising, and market sentiment is optimistic.
Buy the Dip: A slang term referring to the strategy of buying an asset after its price has dropped, anticipating it will rise again.

CGT (Capital Gains Tax): In Australia, Bitcoin is generally treated as property by the Australian Taxation Office (ATO). When you sell, trade, spend, or gift Bitcoin for a profit, that profit may be subject to Capital Gains Tax. Keeping accurate records is essential.
Cold Storage / Cold Wallet: Storing Bitcoin offline, completely disconnected from the internet. This is considered the most secure way to hold significant amounts of cryptocurrency long-term. Examples include Hardware Wallets and Paper Wallets.
Confirmation: When a Bitcoin transaction is included in a block and added to the blockchain, it receives one confirmation. Subsequent blocks added after that block provide additional confirmations. More confirmations generally mean the transaction is more secure and irreversible. Exchanges often require a certain number of confirmations before crediting a deposit.
Cryptography: The science of secure communication using codes. Bitcoin uses advanced cryptography to secure transactions, control the creation of new coins, and verify ownership through public and private keys.
Cryptocurrency: A digital or virtual currency secured by cryptography, making it nearly impossible to counterfeit or double-spend. Most cryptocurrencies are decentralized systems based on blockchain technology. Bitcoin is the original and most well-known cryptocurrency.

DCA (Dollar-Cost Averaging): An investment strategy where you buy a fixed dollar amount of an asset (like Bitcoin) at regular intervals (e.g., weekly, monthly), regardless of the price. This averages out your purchase cost over time and reduces the risk of buying at a peak.
Decentralization: The concept that control and decision-making in a system (like Bitcoin) are distributed across a network rather than being held by a single central entity (like a bank or government).
Distributed Ledger Technology (DLT): The technological foundation of blockchains. It refers to a database (ledger) that is replicated, shared, and synchronized across multiple computers in a network.
DYOR (Do Your Own Research): A common mantra in the crypto space encouraging individuals to thoroughly investigate a project or investment themselves before committing funds, rather than blindly following advice.

Exchange: An online platform where you can buy, sell, and trade cryptocurrencies like Bitcoin for fiat currencies (like AUD) or other cryptocurrencies.

Fiat Currency: Government-issued currency that is not backed by a physical commodity like gold or silver. Examples include the Australian Dollar (AUD), US Dollar (USD), Euro (EUR), etc.
FOMO (Fear Of Missing Out): The anxiety that arises from feeling you might be missing out on a potentially profitable opportunity, often leading to impulsive investment decisions, especially when prices are rising rapidly.
Fork: A change or upgrade to the software protocol of a blockchain. A soft fork is a backward-compatible change, while a hard fork creates a permanent divergence from the previous version, potentially resulting in two separate blockchains and currencies.
FUD (Fear, Uncertainty, Doubt): Spreading negative, misleading, or false information to deliberately create pessimism and drive down the price of an asset.

Gas Fee: Primarily associated with the Ethereum network, this is the fee required to conduct a transaction or execute a smart contract. While Bitcoin uses Transaction Fees or Miner Fees, the concept is similar – paying for network resources.
Genesis Block: The very first block ever created on a blockchain. For Bitcoin, it was mined by Satoshi Nakamoto in January 2009.

Halving (Bitcoin Halving): An event programmed into Bitcoin’s code that occurs approximately every four years (every 210,000 blocks). It cuts the reward for mining new blocks in half. This reduces the rate at which new Bitcoins are created, making it a deflationary mechanism. Historically, halvings have often been associated with subsequent price increases, though past performance is not indicative of future results.
Hardware Wallet: A physical device (often resembling a USB stick) designed to securely store your private keys offline (cold storage). Considered one of the safest ways to hold crypto. Examples include Ledger and Trezor.
Hash / Hashing: A cryptographic process that takes an input (like transaction data) and produces a unique, fixed-size string of characters (the hash). It’s used to verify data integrity and link blocks together securely in the blockchain.
HODL: A popular slang term in the crypto community originating from a misspelling of “hold.” It means holding onto your cryptocurrency for the long term, resisting the urge to sell during market volatility.

KYC (Know Your Customer): The process exchanges and financial services use to verify the identity of their customers, typically involving submitting ID documents and proof of address. This is required by regulations like those enforced by AUSTRAC.

Ledger: A record book of transactions. In crypto, the blockchain acts as a distributed, digital ledger. (Note: “Ledger” is also a popular brand of hardware wallet).
Limit Order: An order placed on an exchange to buy or sell an asset at a specific price or better. The order will only execute if the market reaches that price. Contrast with Market Order.
Liquidity: The ease with which an asset can be bought or sold quickly on the market without significantly affecting its price. High liquidity is generally desirable.

Market Cap (Market Capitalization): The total market value of a cryptocurrency. Calculated by multiplying the current market price per coin by the total number of coins in circulation.
Market Order: An order placed on an exchange to buy or sell an asset immediately at the best available current market price. Contrast with Limit Order.
Miner Fee / Transaction Fee: A small fee paid by users when sending a Bitcoin transaction. This fee incentivizes miners to include the transaction in a block and helps secure the network. Fees can vary depending on network congestion.
Mining: The process of verifying Bitcoin transactions and adding them to the public blockchain ledger. Miners use powerful computers to solve complex mathematical problems (Proof-of-Work). As a reward for their effort and electricity cost, they receive new Bitcoin (Block Reward) and transaction fees.

Node: A computer connected to the Bitcoin network that helps maintain the blockchain by storing a copy of it, validating transactions, and relaying information to other nodes.

Order Book: A list of current buy (bid) and sell (ask) orders for a specific asset on an exchange, organized by price level.

Paper Wallet: A form of cold storage where your Bitcoin public and private keys are printed onto a piece of paper, often as QR codes. Requires careful handling and secure storage.
Peer-to-Peer (P2P): Interactions or transactions that occur directly between two parties without the need for a central intermediary (like a bank). Bitcoin operates on a P2P network.
Private Key: A secret, complex alphanumeric code that proves ownership of your Bitcoin stored at a specific address. It’s used to authorize outgoing transactions. Never share your private key with anyone. Losing it means losing access to your Bitcoin. It’s like the password and key to your safe combined.
Proof-of-Work (PoW): The consensus mechanism used by Bitcoin. It requires miners to expend computational power (work) to solve a puzzle, thereby validating transactions and creating new blocks. This makes it difficult and costly to cheat the system, thus securing the network.
Public Key: Derived from your private key, the public key is used to generate your Bitcoin address. You can share your public address (derived from the public key) safely without compromising your funds. Think of it like your bank account number – people can send money to it, but can’t take money out with just that number.

Recovery Phrase / Seed Phrase: A list of 12 to 24 randomly generated words given to you when you set up most crypto wallets. This phrase is the master backup for all your private keys within that wallet. If you lose access to your device or wallet, you can restore access using this phrase. Keep it extremely secure and offline. Never share it. Losing it means losing your crypto.

Satoshi (Sat): The smallest divisible unit of a Bitcoin. One Bitcoin (BTC) is equal to 100 million satoshis (0.00000001 BTC). Often used when referring to very small amounts or transaction fees.
Satoshi Nakamoto: The pseudonymous creator(s) of Bitcoin. Their true identity remains unknown.
Seed Phrase: See Recovery Phrase.
Shill: Slang term for someone promoting a particular cryptocurrency excessively, often for personal gain, without disclosing their vested interest.
Smart Contract: Self-executing contracts with the terms of the agreement directly written into code. While more prominent on platforms like Ethereum, Bitcoin has limited smart contract capabilities.
Software Wallet / Hot Wallet: A crypto wallet that runs as software on your computer (desktop wallet) or smartphone (mobile wallet). They are connected to the internet (hot), making them more convenient for frequent transactions but less secure than cold storage.
Stablecoin: A type of cryptocurrency designed to maintain a stable value by being pegged to another asset, typically a fiat currency like the US Dollar (e.g., USDT, USDC) or sometimes commodities.

Token: Often used interchangeably with “cryptocurrency,” but can also refer specifically to digital assets that run on another cryptocurrency’s blockchain (e.g., ERC-20 tokens on Ethereum). Bitcoin itself is typically referred to as a coin.
Transaction Fee: See Miner Fee.

Volatility: The degree to which the price of an asset fluctuates over time. Bitcoin is known for its high volatility compared to traditional assets like stocks or bonds.

Wallet (Cryptocurrency Wallet): A digital tool used to store, send, and receive cryptocurrencies like Bitcoin. Wallets store your private keys (which grant access to your funds), not the coins themselves (which live on the blockchain). Types include Hardware Wallets, Software Wallets, and Paper Wallets.
Whale: An individual or entity holding a very large amount of a particular cryptocurrency, potentially enough to influence market prices if they buy or sell large quantities.
Whitepaper: A detailed informational document issued by the creators of a cryptocurrency project. The original Bitcoin whitepaper by Satoshi Nakamoto outlined the concept and technology.

2FA (Two-Factor Authentication): An extra layer of security for your online accounts (like exchanges). In addition to your password, it requires a second form of verification, usually a code from an authenticator app on your phone (preferred) or via SMS (less secure). Strongly recommended for securing exchange accounts.

Disclaimer: This glossary provides general information about common Bitcoin and cryptocurrency terms. It is not financial advice. The crypto market is volatile and complex. Always conduct your own thorough research (DYOR) and consider consulting with a qualified financial advisor in Australia before making investment decisions.

Bitcoin & Crypto Glossary: Australian Beginner’s Jargon Buster