Definition
A wallet where a third party (like an exchange) holds your private keys on your behalf. Convenient but means you don't have full control of your Bitcoin.
Related Terms
Confirmation
When a Bitcoin transaction is included in a block, it receives one confirmation. Each subsequent block adds another confirmation, increasing certainty that the transaction is final.
DCA (Dollar-Cost Averaging)
An investment strategy where you buy a fixed amount of Bitcoin on a regular schedule, regardless of price. Reduces the impact of volatility over time.
Cold Storage
A method of storing Bitcoin offline, away from internet-connected devices. Hardware wallets and paper wallets are common forms of cold storage.
Difficulty Adjustment
An automatic recalibration of Bitcoin's mining difficulty that occurs every 2,016 blocks (roughly two weeks). Ensures blocks are mined approximately every 10 minutes.
Block Reward
The amount of new Bitcoin awarded to miners for successfully adding a new block to the blockchain. Currently 3.125 BTC per block after the 2024 halving.