Bitcoin Terms Beginning with S


Script is the language Bitcoin uses to determine who can spend a given piece of bitcoin (a UTXO). Script is intentionally limited in order to maintain Bitcoin's simplicity and ensure that any individual can run a node and validate the blockchain.

A satoshi, or sat, is the atomic unit of Bitcoin. One bitcoin is divisible into 100,000,000 sats.

Satoshi Nakamoto is the anonymous creator(s) of Bitcoin. After developing Bitcoin and mining for two years, Satoshi disappeared in order to ensure the project would remain decentralized.

Scarcity of money refers to the inability of money to be easily found or created. While it is important for money to be widely available, if money can be easily created, it can have negative consequences for the economy.

Schnorr is a type of digital signature scheme similar to the ECDSA scheme. The Schnorr scheme presents several security, privacy, and efficiency advantages over ECDSA.

The Script Type Heuristic is utilized in chain analysis in order to track ownership of bitcoin across transactions.

The Script Witness contains the signatures and appropriate script, which together unlock bitcoin sent in a SegWit transaction.

The ScriptPubKey is a script which controls how bitcoin can be spent. Bitcoin is locked by the ScriptPubKey and unlocked when the owner submits a valid ScriptSig.

The ScriptSig is the part of a transaction which contains the required signatures and the script which unlocks a UTXO for spending.

The Standards for Efficient Cryptography (SEC) is the standard method for encoding a Bitcoin public key. Most public keys use compressed SEC format and are 33 bytes long.

Secp256k1 is the name of the elliptic curve used by Bitcoin to implement its public key cryptography. All points on this curve are valid Bitcoin public keys.

A seed is a piece of data which can be used to generate all of the public and private keys in a wallet. It is often represented as a Mnemonic Phrase.

Segregated Witness (SegWit) is a soft-fork upgrade to Bitcoin which was activated in 2017. SegWit fixed the problem of transaction malleability, and paved the way for the implementation of the Lightning Network and many other upgrades.

Settlement is a business transaction in which securities, or interest on securities, is exchanged for a payment of money or as fulfillment of contractual obligations.

SHA-256 is a hash function which has several unique properties. SHA-256 takes an input and produces a random, deterministic, unpredictable output. This makes it useful for a variety of functions within Bitcoin.

Short selling is the selling of an asset that the seller does not own. This results in a negative position for the seller.

A sidechain is a protocol that relies on the Bitcoin blockchain for data or security, but conducts its own operations on a separate blockchain.

A sighash is a small part of each transaction that determines which parts of the transaction become immutable once a signature has been added to the transaction.

A digital signature is produced by a private key and proves that the owner of the private key and corresponding public key has validated the signed data.

Signet is a proposed new test network parallel to the Bitcoin network. Signet would use signatures to validate blocks, not a Proof-of-Work system, and coins would not be monetized.

Simplified Payment Verification is a term used to describe software which queries other nodes for new blocks and transactions but does not store the blockchain itself, like a node.

Slippage is financial loss during trading as a result of market inefficiencies.

A smart contract is a digitally created and enforced contract. Smart contracts can be used to design loans, time locked transactions, and even derivative products.

A soft commodity is a subset of commodities, generally defined as anything that can be grown or harvested.

A soft fork is a fork, or a change to a project's source code, which is backwards compatible, meaning that it is not imperative that all nodes adopt the upgrade.

The spot price of an asset is the current price it is trading at. This number is specific to a given market. Spot prices are set by market participants.

A stop-loss order will automatically exit a position if it loses too much value. This can be used to manage a trader’s risk.

Support is a price level that is expected to serve as a minimum in the short term. This level is an estimate, not a guarantee.

A sybil attack targets a network of peer-to-peer nodes by flooding the network with nodes which are all controlled by the same entity. These nodes attempt to disrupt the established consensus of a network.