Understand the terms. Protect your Bitcoin.
In the world of Bitcoin, security isn’t just a feature — it’s your responsibility. At 1Bitcoin.ca, we help you buy Bitcoin non-custodially, which means you secure it yourself.
Here’s a no-nonsense breakdown of essential Bitcoin security terms: what they mean, why they matter, and how to apply them in real life.
Looking for more beginner-friendly terms? Visit the Bitcoin Glossary.
🔑 Self-Custody
Definition: You — and only you — control your Bitcoin.
Why it matters: If you don’t hold the private keys, you don’t own the Bitcoin. Self-custody is the foundation of Bitcoin sovereignty.
Example: Buying BTC on 1Bitcoin.ca and sending it to your Trezor or BlueWallet = self-custody.
Learn how in our Self-Custody & Hardware Wallet Guide.
🧊 Cold Storage
Definition: Keeping your Bitcoin wallet offline.
Why it matters: Cold storage prevents remote attacks. It’s ideal for long-term savings.
Example: Hardware wallets or air-gapped devices.
🔥 Hot Wallet
Definition: A wallet connected to the internet.
Why it matters: Convenient for daily spending, but higher risk — don’t store large balances.
To avoid common mistakes and social-engineering traps, review our Avoid Bitcoin Scams in Canada guide.
🔐 Private Key / Seed Phrase
Definition: Your wallet’s master key, typically shown as 12 or 24 words.
Why it matters: Whoever holds your seed controls your Bitcoin. If lost, it cannot be recovered. Never share it. Never type it into a website.
🔄 2FA (Two-Factor Authentication)
Definition: A second layer of login security.
Why it matters: Prevents unauthorized access even if your password is compromised.
Use apps like Authy or Google Authenticator — not SMS.
Explore more security best practices in the Resources Hub.
👀 Address Reuse
Definition: Using the same BTC address for multiple transactions.
Why it matters: Damages your privacy. Good wallets generate a fresh address each time.
🖥 Watch-Only Wallet
Definition: A wallet that can view balances but cannot spend funds.
Why it matters: Lets you check cold storage without exposing private keys.
🖥 Hardware Wallet
Definition: A physical device storing private keys offline.
Why it matters: Protects against malware and phishing. Best for long-term holders.
Learn how to set one up in our Hardware Wallet Guide.
✍️ Multisig (Multi-Signature Wallet)
Definition: Requires two or more signatures to move funds.
Why it matters: Adds strong redundancy and protection.
Example: A 2-of-3 multisig setup with two keys held by you and one by a backup partner.
🧬 Derivation Path
Definition: The structure your wallet uses to generate addresses.
Why it matters: Using the wrong derivation path during recovery can make it appear your Bitcoin is missing.
Learn proper recovery procedures in the Self-Custody Guide.
📴 Air-Gapped Device
Definition: A device that has never been connected to the internet.
Why it matters: Maximum isolation = maximum security.
Example: Coldcard used with QR or microSD transfer.
⚠️ RBF (Replace-by-Fee)
Definition: Allows replacing a stuck transaction with a higher fee.
Why it matters: Vital when network congestion slows confirmations.
Understand how fees work in our Bitcoin Fees Guide.
⛓ Mempool
Definition: Bitcoin’s “waiting room” for unconfirmed transactions.
Why it matters: Helps you choose an appropriate fee and avoid delays.
Check your expected costs via the Fees page.
🔎 Phishing
Definition: Scams designed to trick you into revealing your seed phrase or login info.
Why it matters: Fake websites and messages often look real.
Read the full Avoid Bitcoin Scams guide to stay protected.
🧬 XPUB (Extended Public Key)
Definition: A key that generates all wallet addresses.
Why it matters: Useful for monitoring — but if leaked, it exposes your history.
Never share your private key.
🔒 Passphrase
Definition: An optional extra word added to your seed.
Why it matters: Creates hidden wallets. But if forgotten, funds become inaccessible.
🧱 Blockchain Confirmation
Definition: The number of blocks confirming your transaction.
Why it matters: More confirmations = more security.
1Bitcoin.ca purchases are normally visible on-chain within minutes.
✨ Dust Attack
Definition: Someone sends you a tiny amount of BTC to analyze or trace your activity.
Why it matters: It’s a privacy attack. Don’t spend the dust — ignore it.
Learn more privacy fundamentals in the Resources Hub.
🚪 Final Word from 1Bitcoin.ca
You are your own bank.
If you use 1Bitcoin.ca, you are in control of your Bitcoin — and your security.
Learn the terms. Practice them. Protect your coins.
Don’t trust. Verify.
