Standardizing Bitcoin Terminology

[Carlton Banks]

But you bring up a point that I like:  the "Observer Wallet" doesn't have to be a "wallet".  It could be more like a "collection box" or a "drop slot", etc.  The only problem with that is that it still behaves much like a "wallet", and it's definitely more convenient to bundle it on the list of "wallets" like Armory does.  And, I don't think it's incorrect at all to call it a "wallet" with an appropriate modifier, but you're right it doesn't have to be...

It strikes me that there's two approaches then:

1. The more abstract technical terms that can entirely describe the whole concept it's ascribed to in a single word

2. The more anthropo-centric terms that can be understood more quickly an widely, but provide an incomplete picture, and require a secondary explanation to let users really understand

These two approaches recur again and again, although I would understand if everyone would prefer there to be a single term that can satisfy both consumate explanation and universal comprehension. Thta would be the ideal that I think you're after. 

[etotheipi]

I just realized that "multi-sig transactions" are clunky not only because of the unfriendly wording, but also because I don't believe that "transaction" is the way users will understand them.  Every coin in the network has a script attached to it describing how it can be spend.  Most of them require one signature.  Some require multiple signatures.  This is a property of the coins more than it is a "transaction".  Yes, it requires a "multi-signature transaction" to spend them, but users typically think about how they "hold" the coins, not how they spend them.  I've found it much easier to describe to Bitcoin newbies this way.

I think it makes sense to ditch "multi-signature transactions" and, if anything, use "multi-wallet coins", or "split-wallet funds".  Actually, it's probably worth separating out two different terms even though they are both the same concept under-the-hood:

(1) Multi-signature coins that require the signatures of 2 or 3 devices you own:  "double-protected coins", "two-factor coins", "split-wallet coins", "multi-wallet", etc
(2) Multi-signature coins that are serving as escrow between 2+ parties that don't trust each other:  "encumbered coins", "two-party funds", etc.

[casascius]

I actually think multi signature transactions would be well understood because they are the equivalent of multi party checks in the fiat banking world... there is already an existing concept to invoke as a mental prototype.

I might submit that the potentially confusing term is "transaction".  This term makes sense if a "transaction" has been completed, but when it applies to a data structure that's missing signatures or hasn't been sent to the p2p network, it might be better called a "transfer order".

Example usage:

If I want to make a transaction, my bitcoin client creates a transfer order, signs it, and broadcasts it to the network.

I might have paid an address that requires signatures from multiple parties to authorize spending.  For my funds to be respent, one authorized party creates a multi-party transfer order, the other authorized party also signs it, and then the transaction is executed when the completed order is broadcasted to the network.

[Carlton Banks]

I actually think multi signature transactions would be well understood because they are the equivalent of multi party checks in the fiat banking world... there is already an existing concept to invoke as a mental prototype.

I might submit that the potentially confusing term is "transaction".  This term makes sense if a "transaction" has been completed, but when it applies to a data structure that's missing signatures or hasn't been sent to the p2p network, it might be better called a "transfer order".

Example usage:

If I want to make a transaction, my bitcoin client creates a transfer order, signs it, and broadcasts it to the network.

I might have paid an address that requires signatures from multiple parties to authorize spending.  For my funds to be respent, one authorized party creates a multi-party transfer order, the other authorized party also signs it, and then the transaction is executed when the completed order is broadcasted to the network.

I like it, a transaction is only deemed to be instantiated once a transfer order has had it's signatory conditions satisfied. It just so happens that we've been working with 1-1 signatory requirements up until now.

[Gavin Andresen]

RE: "multisig transactions" :

I did some high-level multisig design work a couple of months ago:
  https://gist.github.com/4039433
and
  https://moqups.com/gavinandresen/no8mzUDB/

... and had these thoughts about terminology:

Is "Shared Wallet" the right metaphor?

I use the term "shared wallet" to mean: one or more multisignature bitcoin addresses that can receive funds and whose private keys are distributed to more than one person or device.

Perhaps "joint account" or some other banking term would be better.

[casascius]

I would be a fan of "joint account" and "shared wallet" to the extent these refer to single accounts that can be spent with approval from either party, since that's how joint accounts work in the fiat world.  Most people will think of this as husband and wife sharing the same purse.

I would consider them confusing if these terms were applied to an arrangement where both signatures are required.  Rather than being an account that belongs to two entities (people), a typical multisig fiat banking account is a business account that belongs to one entity (a corporation for example) and requires two signatures.  This would never be called a joint bank account.

[Gavin Andresen]

So is there a banking term for an account that requires multiple authorizations for spending?

I ain't never been a CFO or an accountant, so I don't know nuthin about that stuff...

[Carlton Banks]

I would consider them confusing if these terms were applied to an arrangement where both signatures are required.  Rather than being an account that belongs to two entities (people), a typical multisig fiat banking account is a business account that belongs to one entity (a corporation for example) and requires two signatures.  This would never be called a joint bank account.

Indeed, if it could cause any potential confusion as to how it overlaps with existing functional meaning of joint account, then it's a potential turn off. I think it could be a successful metaphor though, perhaps a well laid out GUI driven tool for establishing multi-sig wallets in all their possible variations would be all you need to avoid such a pitfall. Using the maths-ey terminology would obviously harbour potential confusion. I'm thinking little pictorial diagrams to represent the possibilities.

[casascius]

So is there a banking term for an account that requires multiple authorizations for spending?

I ain't never been a CFO or an accountant, so I don't know nuthin about that stuff...

The account itself doesn't have a separate term, but the checks themselves can have two signature lines and the phrase "Two Signatures Required".  This statement is known as a "restrictive legend".  Other examples of restrictive legends include "void if not cashed after 90 days" or "not valid over $500".

Restrictive legends don't have legal force in and of themselves, except where a bank has contractually agreed to honor them.  Although many banks don't offer to enforce restrictions like this, others probably have a "two signatures required" flag as a standard field in accounts.  That said, banks will typically honor them anyway, or at least will typically apply some sort of discretion (e.g. they'd probably let a $50 check slide, and may not even notice the legend due to automated processes involved, but would be far more manual and careful with a $50,000 check).

Even when enforced in this slipshod manner, they effectively deter situations where one person runs off with all a business's or a charity's money.  If a restrictive legend said "two signatures required for over $500", it wouldn't stop someone from cleaning out the account with a series of $499 checks, but it would definitely slow the theft, draw attention, and raise questions, which is consistent with the intent.

[fornit]

So is there a banking term for an account that requires multiple authorizations for spending?

I ain't never been a CFO or an accountant, so I don't know nuthin about that stuff...

i would strongly advice against usage of any terms that only a banker or accountant would know of. "multi-signature transactions" can still be understood by anyone with some basic knowledge of bitcoin and reasonable knowledge of the english language. any banking-specific terms might be understood by a very few extra people with no knowledge of bitcoin, but are a pain in the the ass to look up or translate for any non-native speaker. "restrictive legend" for example is something i never heard of. even with the context of financial transactions i have zero idea what to make of it. its not on wikipedia and the only simple definition i can find is "restrictions on sale".

example: when i finally understand it and get the accurate translation of the banking term in german and someone tries to translate it back without realizing its a financial technical term, he might end up with stuff like "broadcast constraint" or "transmission limit". multi-signature transaction on the other hand consists of words that are probably common in all roman languages.

[tkembo]

I have started working on an ambitious but important project called Bitcoin Dictionary - http://bitcoindictionary.org.

The problem I am try to solve is that we still don't have a credible source of definitions for Bitcoin-related words. Also, with the Bitcoin-related startups/projects/technologies that are coming up, we have new words being coined every day but we don't have a single place we can go to to find standard definitions of these words.

I notice that you have also noticed this problem too. Would you be willing to contribute to this project?