Mastering the Lightning Network

Glossary

This quick glossary contains many of the terms used in relation to Bitcoin and the Lightning Network. These terms are used throughout the book, so bookmark this for a quick reference.

address

Bitcoin addresses compactly encode the information necessary to pay a receiver. A modern address consists of a string of letters and numbers that starts with bc1 and looks like bc1qw508d6qejxtdg4y5r3zarvary0c5xw7kv8f3t4. An address is shorthand for a receiver’s locking script, which can be used by a sender to sign over funds to the receiver. Most addresses either represent the receiver’s public key or some form of script that defines more complex spending conditions. The preceding example is a bech32 address encoding a witness program locking funds to the hash of a public key (See Pay-to-Witness-Public-Key-Hash). There are also older address formats that start with 1 or 3 that use the Base58Check address encoding to represent public key hashes or script hashes.

asymmetric cryptographic system

Asymmetric cryptography, or public-key cryptography, is a cryptographic system that uses pairs of keys: public keys which may be disseminated widely, and private keys which are known only to the owner. The generation of such keys depends on cryptographic algorithms based on mathematical problems to produce functions that are easy to solve one way, but very difficult to solve in reverse. Effective security only requires keeping the private key private; the public key can be openly distributed ...