Every term on this site in a sentence or two, in alphabetical order.
- Air-gapped: A device that never connects to a computer by cable and talks through QR codes or a memory card instead. Read more
- BIP39: The open standard for recovery words (12 or 24 words) and for the optional passphrase. Almost every hardware wallet uses it. Read more
- Bitcoin-only firmware: A firmware version with every other coin removed, so there’s less code that could go wrong. Read more
- CC EAL6+: A Common Criteria certification level for chips such as secure elements. It says how thoroughly a lab tested the chip, not that a wallet is safe. Read more
- Collaborative custody: A multisig where a company holds one of the keys and helps you recover, for a fee. Read more
- Cosigner: One of the keys in a multisig. A 2-of-3 has three cosigners, and any two can sign.
- CPFP (Child Pays for Parent): Speeding up a stuck incoming transaction by spending from it with a high fee. Read more
- Derivation path: The route from a seed to one particular key, written like
m/48'/0'/0'/2'. Multisig wallets use the paths from the BIP48 standard. Read more - Descriptor: The recipe of a multisig wallet: the three public keys, the 2-of-3 rule, the address type and the derivation paths. Not secret, but you need it to recover. Read more
- Electrum server: A server that wallet software asks for balances and transactions. It can see your addresses but can’t spend anything.
- Fingerprint: An 8-character code that identifies a seed (plus passphrase, if you use one). Handy for checking you connected the right device. Read more
- Firmware: The software running on a hardware wallet. Update it through the maker’s own app. Read more
- Hardware wallet: A small device that creates and stores keys and signs transactions without letting the keys leave the device.
- Multisig: A wallet that needs signatures from several keys to spend, for example 2 out of 3. The rule is enforced by the Bitcoin network itself. Read more
- Node: A computer running Bitcoin software that checks every block and transaction itself. Using your own node means you don’t have to ask anyone else’s server. Read more
- P2WSH / Native SegWit: The address type used for multisig in this guide. The addresses start with
bc1q. - Passphrase: An optional extra word or sentence on top of a seed. Seed plus passphrase opens a different wallet from the seed alone. Read more
- PSBT: Partially Signed Bitcoin Transaction. The standard format that passes a transaction from the wallet software to each device until it has enough signatures. Read more
- Quorum: The number of signatures needed to spend. In a 2-of-3, the quorum is two. Read more
- RBF (Replace-by-Fee): Replacing a transaction that’s stuck with the same transaction at a higher fee. Read more
- Reproducible build: Firmware that anyone can compile from the published source and get exactly the same file the maker ships. Read more
- Secure element: A tamper-resistant chip in a hardware wallet that guards the key and wipes itself after too many wrong PINs. Read more
- Seed / recovery phrase: The 12 or 24 words every key in a wallet is calculated from. Whoever has them controls the coins. Read more
- Signing computer: The computer you use only for your wallet software, kept clean and used for nothing else. Read more
- Single-sig: A wallet controlled by one key: one seed, one single point of failure. Read more
- SLIP39: Trezor’s alternative backup format, including its 20-word default. Other brands can’t restore it. Read more
- Supply chain attack: Tampering with a device or its software before it reaches you. Read more
- Tor: A network that hides your IP address from the servers you connect to. Read more
- UTXO: One separate “coin” on the blockchain. A wallet’s balance is the sum of its UTXOs.
- Wallet policy: A multisig setup registered on a hardware wallet, so the device can check by itself that an address belongs to your wallet.
- Watch-only wallet: A wallet that can see addresses and balances but can’t sign anything.
- xpub: Extended public key. It lets wallet software generate your addresses but can’t spend. Its private counterpart, the xprv, never leaves the device. Read more