Cocoa is the dry chocolate powder derived from chocolate liquor. It comes in two types: natural and Dutch process. Dutch processed cocoa is processed with an alkaline. It is slightly darker, smoother, and more easily dissolved than natural cocoa. In many recipes, natural cocoa and Dutch cocoa are not interchangeable. Natural cocoa is slightly acidic and will therefore chemically react with baking soda to create carbon dioxide bubbles and some leavening power. Dutch cocoa is slightly alkaline, will not react with baking soda, and must rely on baking powder for leavening.
Bitter (unsweetened) baking chocolate is made from pure chocolate liquor. By specification, it must contain 50 to 58 percent cocoa butter though with inferior products, vegetable oil may he added. Depending on the producer, milk solids, vanilla, or salt may be added. I have a package in front of me that contains only chocolate and milk solids. Unsweetened chocolate has a bitter taste and relies on sweeteners in the recipe to make it palatable.
Sweet baking chocolate–bittersweet, semisweet chocolate–has sugar added. These products must contain 35 to 50% cocoa butter but may have as little as 15% chocolate liquor. Because unsweetened chocolate has twice the chocolate liquor, we prefer to use unsweetened chocolate in most of our baking.
Bittersweet and semisweet chocolate can be used interchangeably in recipes though there is a difference in flavor. Often, bittersweet is a more expensive chocolate and to many, a better, richer-flavored chocolate.
Milk chocolate is made with ten percent chocolate liquor. It contains a minimum of twelve percent milk solids. Because it has such a low percentage of chocolate liquor, rarely is it melted and added to batter or dough.
White chocolate contains no chocolate liquor but is made with cocoa butter. Historically, the FDA has not regulated the manufacture of white chocolate so you need to read labels carefully. If the product was made with vegetable oil instead of cocoa butter, it will not perform the same as a product with cocoa butter.
Buy Chocolate chips are made with chocolate liquor with only minimal amounts of cocoa butter. Instead, they are made with vegetable oil and stabilizers to help them hold their shape. Without the cocoa butter, chocolate chips have a different taste and mouth feel. Chocolate chips will have a firmer set in puddings, pie fillings, and sauces than baking chocolate. Chocolate chips can be purchased in milk chocolate and semi-sweet chocolate.