Bitcoin mining comes with its own vocabulary, and it can feel like a wall of jargon at first. This glossary defines the 40 terms you are most likely to meet, in plain English, with links to the guides that go deeper. Bookmark it, and come back whenever a word trips you up.
Key takeaways
- 40 essential terms, sorted alphabetically.
- Each definition fits in a few lines. Follow the links for the full story.
- Start with hashrate, difficulty, block subsidy and mining pool: they explain most of what moves mining rewards.
A to B
51% attack
A situation where one party controls more than half of the network's hashrate and could rewrite recent blocks or block certain transactions. It would be extraordinarily expensive at Bitcoin's scale, and it cannot create coins out of thin air or steal funds from wallets.
ASIC
Application-specific integrated circuit: a chip designed for one task. Bitcoin ASIC miners compute SHA-256 hashes and nothing else. See Inside an ASIC Miner.
Block
A batch of transactions plus a header that links it to the previous block. A new block is added about every 10 minutes.
Block reward
Everything the miner of a block earns: the block subsidy plus the transaction fees it contains.
Block subsidy
The newly created bitcoin paid to the miner of each block: 3.125 BTC since April 2024. It halves every 210,000 blocks.
Blockchain
The chain of all blocks since 2009, each one referencing the one before it. It is Bitcoin's shared, public ledger.
C to D
Coinbase transaction
The first transaction in every block, which pays the block reward to the miner. Unrelated to the exchange of the same name. Its coins can only be spent after 100 more blocks; see After the Block.
Cold wallet
A wallet that keeps its private keys offline, usually a hardware device. The standard choice for larger amounts.
Confirmation
A measure of how deep a transaction is in the blockchain. One confirmation means it is in a block; each new block on top adds one.
Difficulty
How hard it currently is to find a valid block, expressed relative to the easiest difficulty in Bitcoin's history.
Difficulty adjustment
The automatic recalibration of difficulty every 2,016 blocks that keeps the average block time near 10 minutes. See The Difficulty Adjustment.
Double spend
Spending the same bitcoin twice. Preventing it is the core problem that mining and proof of work solve.
E to G
EH/s
Exahashes per second: one quintillion (10^18) hashes per second. Used for large pools and the network as a whole.
Efficiency (J/TH)
Joules per terahash: the energy a miner needs to compute one trillion hashes. Lower is better. The best air-cooled machines are around 11 J/TH.
Fee rate
The price paid for block space, in satoshis per virtual byte (sat/vB). Miners prioritize transactions with higher fee rates. See Transaction Fees and the Mempool.
FPPS
Full pay per share: a pool payout model that pays a fixed amount per share, including expected transaction fees, whether or not the pool finds blocks.
Full node
Software that independently downloads and checks every block and transaction against Bitcoin's rules. Nodes, not miners, decide which blocks are valid.
Genesis block
The first Bitcoin block, mined by Satoshi Nakamoto on January 3, 2009. See A Short History of Bitcoin Mining.
H
Halving
The event, every 210,000 blocks, when the block subsidy is cut in half. The next one is expected around spring 2028. See The Bitcoin Halving.
Hash
The fixed-length output of a hash function. In mining, each attempt to find a block produces one hash.
Hash board
The circuit board inside a miner that carries the hashing chips. Most ASICs have three.
Hashprice
The revenue one unit of hashrate earns per day, often quoted in dollars per PH/s per day. It combines the block reward, fees, difficulty and the price of Bitcoin.
Hashrate
The number of hashes a miner, or the whole network, computes per second. See Hashrate Explained.
Hot wallet
A wallet whose keys live on an internet-connected device, like a phone app. Convenient for everyday amounts.
M to O
Mempool
The waiting room of valid transactions that have not been included in a block yet. Each node keeps its own.
Merkle root
A single hash that summarizes every transaction in a block. It sits in the block header, so changing any transaction changes the header.
Mining pool
A group of miners who combine their hashrate and share the rewards in proportion to their work. See Mining Pools Explained.
Nonce
A number in the block header that miners change on every attempt, producing a different hash each time.
Orphan block
The common name for a stale block: a valid block that ended up outside the main chain because a competing block won the race.
P to S
PPLNS
Pay per last N shares: a pool payout model where a found block's reward is split among the miners who submitted the most recent shares. Payouts vary with the pool's luck.
PPS
Pay per share: a pool payout model that pays a fixed amount for every valid share. Classic PPS covers the subsidy but not fees.
Proof of work
The mechanism that makes miners spend real computing work to add a block, which makes rewriting history prohibitively expensive.
Satoshi
The smallest unit of bitcoin: one hundred-millionth of a bitcoin (0.00000001 BTC). Often shortened to "sat".
Seed phrase
A list of 12 or 24 words that can restore a wallet's keys. Anyone who has it controls the funds. See Getting Paid Safely.
SHA-256
The hash function Bitcoin mining uses. Bitcoin applies it twice to each block header.
Share
A hash that meets a pool's easier target. Shares prove a miner is working and determine its cut of the pool's rewards.
S to T
Solo mining
Mining without a pool, hoping to find a whole block alone. Possible, but a lottery for anyone without a very large share of the network.
Stratum
The communication protocol between miners and pools. Its newer version, Stratum V2, lets miners choose the transactions in the blocks they work on.
Target
The number a block hash must fall below to be valid. A lower target means a higher difficulty.
TH/s
Terahashes per second: one trillion hashes per second. The standard unit for a single ASIC and for rented cloud hashrate.
Frequently asked questions
What is the difference between block reward and block subsidy?
The subsidy is only the newly created bitcoin in a block. The reward is the subsidy plus the transaction fees the block contains.
Is a satoshi the same as Satoshi Nakamoto?
The unit is named after Bitcoin's pseudonymous creator, Satoshi Nakamoto. One satoshi is 0.00000001 BTC.
What does a mining pool's "share" have to do with my rewards?
The more valid shares your hashrate submits, the larger your portion of the pool's rewards.
This article is for general information only and is not financial, investment, legal or tax advice. Mining rewards depend on network difficulty, block rewards and the price of Bitcoin, and are not guaranteed.
