Texas Bitcoin Glossary

Bitcoin in Texas comes with its own vocabulary — ERCOT, demand response, SB 21, Lightning, self-custody. Here's every word that matters, in one or two plain sentences each, with no jargon used to explain the jargon. Written for your first day.

Updated October 2026. For the sourced detail behind any term, follow its link to the full page. Not financial, investment, legal, or tax advice.

The basics

What Bitcoin is, and the words you'll hear in the first five minutes.

Bitcoin: A form of money you can hold and send yourself, over the internet, without a bank or company in the middle. There will only ever be 21 million of it, and no one can change that rule.
Blockchain: The shared public record of every Bitcoin transaction, copied across thousands of computers so no single one can quietly rewrite it. Think of it as a ledger everyone keeps a copy of at once.
Satoshi (sat): The smallest piece of a bitcoin — one hundred-millionth of one. Small amounts are counted in sats, the way dollars are counted in cents. Named for Bitcoin's pseudonymous inventor, Satoshi Nakamoto.
Self-custody: Holding your own Bitcoin directly, so no bank or exchange can freeze it or lose it for you. It's the difference between cash in your pocket and money in someone else's account — freedom and full responsibility at once.
Private key: The secret code that proves a batch of Bitcoin is yours and lets you spend it. Whoever has the key controls the coins — which is why protecting it is the whole game.
Cold storage: Keeping your private key on a device that never touches the internet, so it can't be hacked remotely. The offline equivalent of a safe rather than a wallet in your back pocket.
Node: A computer running Bitcoin's software that keeps its own full copy of the ledger and checks that every transaction follows the rules. The more independent nodes there are, the harder the network is to cheat or capture.
Proof-of-work: The method Bitcoin uses to agree on its record without a referee: computers compete to solve a hard math puzzle, and the winner adds the next page to the ledger. The work costs real electricity, which is what makes cheating expensive — and ties Bitcoin to the power grid.
Mining: Running specialized computers that do the proof-of-work puzzle, confirm transactions, and earn newly issued bitcoin in return. It's how new coins enter circulation and how the network stays secure.
Hashrate: A measure of how much computing power is pointed at mining Bitcoin worldwide. Higher hashrate means a more secure network — and Texas is home to a large share of it.

Mining & the grid

How Texas power turned into the mining capital of the world.

ERCOT: The Electric Reliability Council of Texas — the nonprofit that runs the state's standalone power grid, which covers most of Texas. Bitcoin miners plug into this grid, and ERCOT's rules shape where and when they run.
Demand response: Programs that pay large power users to switch off quickly when the grid is strained. Bitcoin miners can power down in seconds, so they get paid to act as a shock absorber during heat waves and cold snaps.
Curtailment: When a miner (or other big load) is told to cut its power use — either voluntarily for payment, or by order during an emergency. It's the lever that lets Texas add huge electricity users without destabilizing the grid.
Flared / stranded gas: Natural gas that oil wells produce with no pipeline to sell it, so it's burned off and wasted. Some Texas miners set up on-site to turn that otherwise-wasted gas into electricity and hashrate.
Large load: Grid shorthand for a single customer that draws an enormous amount of power — a big mine or data center. Texas law now has special registration and curtailment rules for loads above 75 megawatts.

The money law

The Texas statutes and the federal line that decide what's allowed.

Supervisory Memorandum 1037: A 2014 Texas banking ruling that said Bitcoin isn't legal “money,” which — perhaps surprisingly — meant you don't need a state money-transmitter license just to buy or sell your own. It set the permissive tone for everything after.
Senate Bill 21 (SB 21): The 2025 law that created the Texas Strategic Bitcoin Reserve — a state-held stash of Bitcoin, funded by the legislature and managed by the comptroller. It made Texas one of the first states to put Bitcoin on its own books.
Strategic Bitcoin Reserve: Texas's own holding of Bitcoin, created by SB 21 and kept outside the regular treasury. It's funded with public money by the legislature — there's no citizen share, token, or bond tied to it.
Reserve asset vs. legal tender: Two very different things. A reserve asset is something the state owns as savings (like gold, or now Bitcoin). Legal tender is money you must be able to pay taxes and debts with. Texas holds Bitcoin as a reserve asset — it has not made it legal tender.
HB 1056 (gold-backed currency): A 2025 Texas law setting up a state-issued digital currency backed by gold held in the Texas Bullion Depository. It sits alongside the Bitcoin reserve as a separate hard-money experiment.
Section 1960 (money transmitting): A federal law that makes running an unlicensed money-transmitting business a crime. It's the main charge behind most Texas Bitcoin prosecutions — usually aimed at unlicensed sellers and scams, not ordinary users.

The frontier

The newer tools being built on top of the base layer.

Lightning Network: A faster layer built on top of Bitcoin that settles tiny payments instantly and for almost no fee — think buying a coffee rather than wiring money. It clears back down to the main Bitcoin ledger underneath.
Taproot: A 2021 upgrade to Bitcoin that made transactions more private and made it easier to build more complex features without bloating the network. It's the groundwork much of the frontier is built on.
Stablecoin: A digital token designed to hold steady at a fixed value, usually one U.S. dollar. We cover stablecoins only where they settle onto Bitcoin's base layer — not as a doorway to the wider “crypto” world.
Custody: Who actually holds the keys to a batch of Bitcoin. “Self-custody” means you do; “custodial” means a company does it for you. The Texas reserve's move from an ETF to directly held coin is a custody question.

Now that the words make sense, the rest of the site opens up. New here? The Start Here page points you to the best first read, the events directory finds the meetup nearest you, and the resources shelf collects the free tools. All plain, all free.

By TexasBitcoin · Updated October 14, 2026