Understand the terms. Protect your Bitcoin.
In the world of Bitcoin, security isn’t just a feature — it’s your personal responsibility. At 1Bitcoin.ca, we help you buy Bitcoin non-custodially, which means you must secure it yourself.
Here’s a no-nonsense breakdown of essential Bitcoin security terms: what they mean, why they matter, and how they apply in real life.
Looking for more beginner-friendly terms? Visit our Bitcoin Glossary for Canadians
🔑 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.
🧊 Cold Storage
Definition: Keeping your Bitcoin wallet offline.
Why it matters: Cold storage prevents remote hacks. Best for long-term savings.
Example: Hardware wallets or air-gapped devices.
🔥 Hot Wallet
Definition: Wallets connected to the internet.
Why it matters: Great for daily use but riskier. Don’t store large balances.
Example: Mobile apps like BlueWallet, Trust Wallet.
🔐 Private Key / Seed Phrase
Definition: Your wallet’s master key, usually shown as 12 or 24 words.
Why it matters: Whoever holds your seed, holds your Bitcoin. If you lose it, there’s no recovery.
Never share your seed. Never enter it on a website.
🔄 2FA (Two-Factor Authentication)
Definition: A second layer of login security.
Why it matters: Prevents unauthorized logins even if your password is compromised.
Use apps like Google Authenticator or Authy — not SMS.
👀 Address Reuse
Definition: Using the same BTC address for multiple transactions.
Why it matters: It harms your privacy. Use a new address for each transaction.
Good wallets do this automatically.
🕵️ Watch-Only Wallet
Definition: A wallet that can monitor balances but can’t spend funds.
Why it matters: Lets you track your cold storage without exposing keys.
Example: Load your hardware wallet into BlueWallet as watch-only.
🖥 Hardware Wallet
Definition: A physical device that stores your private keys offline.
Why it matters: Protects against malware and phishing. Ideal for HODLers.
Popular brands: Trezor, Ledger, Coldcard.
✍️ Multisig (Multi-Signature Wallet)
Definition: A wallet that requires 2+ signatures to move funds.
Why it matters: Adds an extra layer of protection. Used by advanced users and businesses.
Example: 2-of-3 multisig setup with two keys held by you and one held by a backup service.
🧬 Derivation Path
Definition: The math structure your wallet uses to generate addresses.
Why it matters: Using the wrong derivation path during wallet recovery can make it look like your BTC is gone.
Most wallets follow standard paths. Check settings when restoring.
🛡️ Air-Gapped Device
Definition: A device that’s never connected to any network.
Why it matters: Maximum isolation = maximum security.
Example: Coldcard used with QR codes and microSD transfers.
⚠️ RBF (Replace-by-Fee)
Definition: Lets you resend a stuck transaction with a higher fee.
Why it matters: Useful if your Bitcoin transaction is stuck in the mempool.
Only works if your wallet supports RBF. Enable it before sending.
⛓ Mempool
Definition: Bitcoin’s waiting room for unconfirmed transactions.
Why it matters: Helps you decide on an appropriate fee. Avoid overpaying or getting stuck.
Check it: https://mempool.space
🔎 Phishing
Definition: Scams that trick you into revealing your seed phrase or login info.
Why it matters: Fake websites and messages can look real. Stay alert.
Tip: Access 1Bitcoin.ca directly by typing the URL or using a bookmark.
🧬 XPUB (Extended Public Key)
Definition: A public key that generates all your wallet’s addresses.
Why it matters: XPUBs are useful for monitoring but can expose your transaction history if leaked.
Share cautiously. Never share your private key.
🔒 Passphrase
Definition: An optional extra word added to your seed for advanced security.
Why it matters: Creates hidden wallets. If you forget it, your funds are inaccessible.
Use only if you fully understand how it works.
🧱 Blockchain Confirmation
Definition: How many blocks have confirmed your transaction.
Why it matters: More confirmations = more security. Aim for 6+ for large transactions.
1Bitcoin.ca purchases are visible on-chain typically within minutes.
✨ Dust Attack
Definition: When someone sends a tiny amount of BTC to your wallet to trace your activity.
Why it matters: It’s a privacy attack. Don’t spend the dust — ignore it.
🚪 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.
Disclaimer: This guide is for educational purposes only. Always do your own research and use trusted tools. We do not endorse third-party wallets, apps, or services mentioned here.