BitPay Glossary of Terms

Payment Protocol

Payment Protocol is a Bitcoin Improvement Proposal (BIP). This BIP describes a protocol for communication between a merchant and their customer, enabling both a better customer experience and better security against man-in-the-middle attacks on the payment process.

The Payment Protocol brings usability and security improvements to the cryptocurrency ecosystem by greatly reducing user errors. Payment Protocol wallets instantly lock in the correct sending amount and bitcoin address for a payment. This avoids manual mistakes which cause costly payment errors.

BitPay’s invoices require Payment Protocol payments. With Payment Protocol, a wallet can coordinate a payment directly with BitPay’s servers before it is broadcast on the Bitcoin network. If there is anything wrong with the transaction, BitPay can reject it. The transaction is not broadcast, and the user does not lose money to a mistaken payment.

Encrypt Password

The encrypt password is used as a security barrier. This password is required anytime funds are going to be sent out of the wallet, as a regular transaction, a payment or the available in-app purchases like Coinbase. It is also required to modify certain configurations, like the password itself or to access the wallet backup.

The only way to recover the wallet is by the recovery phrase. We strongly recommend you to store the encrypt password and recovery phrase in a safe place.
 

Recovery Phrase

A private key in the context of Bitcoin is a secret number that allows bitcoin to be spent.

The recovery phrase is a human-friendly way to represent the wallet’s private key, for the simple reason it is easier to write down “member village renew glide nominee purchase merge work month hunt lens forward” than E9873D79C6D87DC0FB6A5778633389_F4453213303DA61F20BD67FC233AA33262.

The recovery phrase is the only way to recover a wallet, so we strongly recommend you to write it down on a piece of paper and keep it in a safe place.

QR Code

A QR code consists of black squares arranged in a square grid on a white background, which can be read by an imaging device and it is now widely used around the world.

The BitPay applications use QR codes to represent addresses, wallets, and invoices. Because the computer interprets the QR code perfectly, QR codes make it easier for the user to get an address or invoice, send funds, and import or export a wallet. The use of QR codes also dramatically decrease the human errors possible when manually copying information.

These codes can be read by most smartphones and computers. Scanning a QR code uses the device’s camera.

Bitcoin Miner

Bitcoin mining is the process by which transactions are verified and added to the public ledger, known as the blockchain, and also the means through which new bitcoin are released. Anyone with access to the internet and suitable hardware can participate in mining. The mining process involves compiling recent transactions into blocks and trying to solve a computationally difficult puzzle.

Bitcoin miners can refer to the people, companies, or entities who mine bitcoin blocks or the powerful computers which mine bitcoin blocks.

The participant who first solves the puzzle gets to place the next block on the blockchain and claim the rewards. The rewards, which incentivize mining, are both the transaction fees associated with the transactions compiled in the block as well as newly released bitcoin.

Push notification

A push notification is a message that pops up on a mobile device. App publishers can send them at any time, so users don't have to be in the app or using their devices to receive them.

Push notifications look like SMS text messages and mobile alerts, but they only reach users who have installed the app.

The BitPay app, for example, uses push notifications to let the user know they have received funds, that a transaction has been confirmed, and events related to multisig wallets. 

Multisig wallet

Multisig is a contraction for “Multisignature”. As its name indicates, this is a shared wallet that requires a specified number of devices to approve a transaction. A multisig wallet has two or more copayers (members who share the wallet) and requires one or more signatures. The copayers share the funds and every transaction has to be approved by one or more of them.

For example: a “2 of 3” wallet is a wallet shared by 3 copayers which needs 2 signatures to approve a transaction.

Copayer

A member of a shared wallet. See Multisig wallet.

Wallet ID

It is a alphanumeric string that uniquely identifies a wallet within the BitPay network.
BitPay support staff may ask for your wallet ID to research certain issues.

Testnet

Testnet is an exact copy of the Bitcoin (or Bitcoin Cash) network intended for testing purposes. The Bitcoin blockchain where transactions are sent is called livenet and is completely separate from the testnet.  

Testnet coins are separate and distinct from actual Bitcoin or Bitcoin Cash, and testnet coins do not have any value in the real world. This allows application developers or bitcoin testers to experiment without having to use real Bitcoin or Bitcoin Cash.

Learn more about testnet and setting up your wallet for testnet.