With the Bitcoin craze in full flow, it became obvious that if you’re in Canada looking to purchase some of this new asset class, you’ll need a reliable location & dealer through which to obtain it.
This tutorial will explain exactly what you need to know in order to buy and sell one of the most traded currencies in the world today. It must be noted that this is NOT financial or legal advice – the entire premise of the article is to give people the opportunity to see where they can purchase Bitcoins in countries other than the US… in this case, above the border in the North…
What Is Bitcoin…
Bitcoin is the most traded version of a new type of currency called “cryptocurrency”.
Cryptocurrency took its rise from the new “blockchain” technology that was developed in 2008/2009 by a group of software developers. The technology is what’s known as “open source”, which means that anybody can view (and edit) the source code.
Due to the open nature of blockchain, several people started developing what became known as “crypto currencies” for the system. These currencies eventually took hold in the asset markets, and people began trading them. This trading gave rise to the extremely high prices we’ve been witnessing with the asset class (mainly driven by speculation).
The point about Bitcoin (which has lead to most contention) is whether it’s actually an asset at all. Since it’s an entirely “digital” product (IE a computer file), the idea that it’s actually worth anything has lead to many regulators becoming confused about its provenance, as well as becoming very jittery about the various crypto “exchanges” which have sprung up around the world. Canadian news has been all over the Bitcoin buzz. Find out about Crypto Wallets here.
The way to “buy” Bitcoins is through these exchanges… but you need to be VERY careful if you decide to do this, as this is the equivalent of the Wild West right now. Ths following tutorial is going to explain *exactly* what you need to know about Bitcoin and how you can buy/sell it. Firstly, we need to start with “Blockchain”…
What Is Blockchain?
Blockchain is a type of technology which has been developed to provide a decentralized data infrastructure. In short, it’s used to give people the ability to store, update and manage data across a spectrum of providers, rather than just a single server. This not only increases the security, but also the accessibility and integrity of the data. Find out about investing in cryptocurrencies here.
In layman’s terms, a “blockchain” is a decentralized database. The way it works is to store data known as “blocks” on 100’s of servers around the world. These blocks are then added to “chains” which allow you to update, manage and edit the data they contain within.
The main benefit of having a system like this that rather than relying on a single data provider (such as Facebook for example), users have the ability to pull data from a myriad of different sources. Whilst this might not seem like a big deal, it’s best use case is for anonymous data (which people would not want traced to a particular user / identifier).
The simple way to explain Blockchain is with an example. Some speculation comes to mind with people on the opposing viewpoint.
On your computer, you currently have 1,000’s of “files”. A file is simply a “block” of data stored in binary format. When used together, these files can do many things. However, on their own they have a number of weaknesses. The main one is a lack of VERSIONING.
In computing, “versioning” is the term used to describe the way in which you’re able to upgrade a particular set of data. Due to the static nature of files, not much versioning functionality has been developed for them – meaning that you never really know if you have the “latest” version or not.
The reason why file versioning is important is because it’s often the case that software providers will update files without users knowing. They’ll then release updates for their software, which will update the files as required. Well… because computers currently don’t “track” the versions of files directly, you’ll never know whether they’re up to date or not. Learn more by checking out this article by Reuters.
This is where a “blockchain” type system would work VERY well.
By treating each file as a “block” and the way the files work as a “chain”, you’re able to keep each file completely up to date. Blockchain is a protocol which basically stores a series of files/folders inside a “chain” and then
Whilst this might seem complicated, the simple thing to say is that the idea of “blockchain” means that data is not only going to become “3 dimensional” , but it’s also going to be much more transparent & easier to access.
Because of this, several developers grouped together to create certain encryption algorithms for a particular type of data they called “crypto currency”. This isn’t a currency at all, but is a public ledger of financial transactions (basically what a bank would do except stored on 100’s of servers around the world).
The main deal with the nature of this public network is the cryptographic nature of the algorithms. Bitcoin, for example, ONLY has 21 million potential values, meaning that once they have all been discovered, there is absolutely no way the “currency” can be devalued by issuing more etc.
Because Bitcoin is a particular “chain” on the Blockchain, what happens when you buy a Bitcoin is the transaction is added to the chain as a block. This block then allows you to redeem the Bitcoin by “selling” it to someone else. So not only does this give the currency the ability to be “traded”, but actually means the “history” of each coin will be available forever due to the public & decentralized nature of the blockchain system.
Obviously, the history itself will not be accessible unless you have the decryption hash… but nonetheless, the
Where To “Buy” Bitcoin…
The places where you “buy” Bitcoin are what are known as “cryptocurrency exchanges“. Like currency exchanges in the “real” world, these are places where you are able to purchase bitcoins for local currency, selling said bitcoin when you get to another destination/exchange.
The main value of “bitcoin” lies in cross-border transactions, especially in countries where the local currency is either not so strong, there are problems with corruption, war or other issues. Think of it like a 21st century version of a travellers’ cheque, except it’s not backed by any bank but the overall transparency of the market.
Thus, “buying” Bitcoin is exactly like buying foreign currency – you use your own currency (USD/GBP/EUR/etc) to “purchase” someone’s “Bitcoin” (secure file), and then sell that Bitcoin when you get to another country. All government restrictions have been avoided (because the currency is not issued by central banks) and you’re able to retain anonymity when using different services.
There have been a number of large Cryptocurrency “exchanges” set up. It MUST be noted that these are NOT regulated by governments, and the risk is ENTIRELY on you as to whether you want to use them or not. The information contained herein explains which exchanges to use, and which to avoid…
The largest – and most trusted – broker of Bitcoin…Established in 2012, Coinbase received millions in venture funding in order to help it provide the best & broadest possible service in the sale/trading of digital assets, including Cryptocurrency.This is by far the most trusted cryptocurrency exchange service, which actively vets the identities of its buyers (to determine that it’s services are being used LEGALLY), and also provides such killer functionality as “instant” digital transfers etc.If you are new to the digital currency space, Coinbase is by far the best recommendation in terms of “buying” and “selling” cryptocurrencies is concerned.
Not as popular as Coinbase, but equally loved by its users, Cex.io is based in Europe and is best known for it’s integration with many of the world’s most used payment methods, including ACH transfer and Paypal…Used mainly by traders of bitcoin (rather than consumers), it’s highly reliable and often the exchange of choice for many institutional investors.
Founded by the now-infamous “Winkelvoss” twins (who also bought a LARGE amount of Bitcoin when it was a very low price), this is typically seen as the third place digital asset trading exchange…
Operated by “Coinbase”, GDAX stands for Global Digital Asset Exchange and is designed to give retail & institutional investors the opportunity to buyThis is mainly used as a “trading platform” for investors to buy and sell digital currency, including the likes of Bitcoin, Ethereum and others.
Buying Bitcoin In Canada
Lastly, to buy Bitcoin in Canada, you need to look for Canada-specific cryptocurrency exchange services. There are a number of these which I’ll cover below…
The most important thing to mention is that
The most popular in the world is also the most popular in Canada.Due to the global nature of digital assets, this service provides global transactions backed by investors in the USA. Coinbase fully supports Canada as well as a large number of other countries.If you are interested in purchasing Bitcoin, you’d be best looking at Coinbase before anything else. This is the most trusted service.
Obviously, legal caveats apply when engaging in ANY sort of financial transaction (either online or offline).
The purchase & sale of “bitcoin” is an extremely risky endeavour and it should go without saying that you should validate any potential trading partner thoroughly before signing up to a service. We do not endorse any of the services listed in this article.