- What is Bitcoin?
- How to Buy Bitcoin in Canada?
- How to Trade Bitcoin in Canada?
- Where can I Use Bitcoin in Canada?
- Bitcoin ATMs in Canada
What is Bitcoin?
Bitcoin is a currency, more commonly referred to as a cryptocurrency that is created and exists in electronic form, with no physical version for Bitcoin holders to possess.
Bitcoin was created by Satoshi Nakamoto and was released in 2009. Nakamoto’s vision was to create a digital currency that falls out of the reach of governments and central banks.
Bitcoin continues to grab the headlines, but it’s not just the currency itself that is worthy of praise, with the blockchain technology behind the currency considered to be a first of its kind.
The ethos of Bitcoin and other cryptocurrencies is the decentralized element. Bitcoin transactions all over the world are recorded and stored on the blockchain. The blockchain is a public ledger that is found on all of the computers within the Bitcoin network. All of the ledgers are synchronized with no master ledger.
The verification and update process for Bitcoin transactions is referred to as Bitcoin mining. The process is independent, with miners selected at random to verify transactions over a given period of time. Once the verification is complete, the transaction information is incorporated into a block, which then links to the blockchain. Miners receive Bitcoins as a reward for the verification process.
With the decentralized ethos of Bitcoin, the other attribute is the anonymity given to those buying, selling or holding Bitcoins.
Since the evolution of Bitcoin, other cryptocurrencies have hit the market as having offshoots of Bitcoin itself, with Bitcoin Cash and Bitcoin Gold having been created in the 2nd half of this year.
How to Buy Bitcoin in Canada?
Buying Bitcoin in Canada could be done in various ways: Via Bitcoin exchanges, through CFD’s or through ATM’s. While buying Bitcoin via exchange and ATM’s provides you the legal possession of the cryptocurrency in a digital wallet, purchasing Bitcoin via CFD’s brokers allows you to trade bitcoin’s price fluctuations without holding the coin. Currently, many who would like to invest in Bitcoin are in search of Bitcoin exchanges offering Bitcoin to Canadian investors.
One of the top leading and reliable Bitcoin exchanges is CEX.IO, the exchange has a low trading fee of just 0.2% and allows customers to buy Bitcoins with credit cards, bank transfers, SEPA transfers, cash or AstroPay. Credit card purchases are immediate. Below is a complete guide to buying Bitcoin via CEX.IO in 4 easy steps.
Step 1 – Open a Digital Wallet
A digital wallet is where you hold your cryptocurrencies and interacts others via the blockchain technology. There are many providers of digital wallets, however, it is important to make a deep research before you decide which one is the best for you. Currently, the most popular digital wallets provider is Blockchain.info.
Step 2 – Register & Open an Account
Once you enter CEX.IO website, register and open an account that can provide you with their service.
Step 3 – Receive the 2FA Code
This is the authentication code as well as your password when you access CEX.IO. The code will be generated by an application and will be delivered to you by SMS.
Step 4 – Purchase Bitcoin
Now you can easily purchase Bitcoin and other cryptocurrencies. Note that you can always buy fractions of Bitcoin and CEX.IO allows you to choose fixed amounts with your own currency.
Choose the payment option that is most convenient for you.
In order to complete the purchase, the broker will ask you to verify your identity with documents and various details.
Apart from CEX.IO, there are other Bitcoin exchanges that provide their services in Canada:
Coinbase – Supports 32 countries with more than 10m customers served. Canadian customers can buy using credit and debit cards, with fees of 3.99% for purchases. When buying Bitcoins with bank transfers, it can take up to 5-days however.
Coinmama: For purchases of under $150, there is no requirement to verify identity, though there is a transaction fee of around 6% for customers buying Bitcoins with credit or debit cards, which is very high.
GDAX: Considered to be one of the larger U.S Bitcoin exchanges and customers can transfer funds via bank transfer, SEPA or bank wire. The exchange is also considered competitive from a fee perspective.
Canadian Bitcoins: Customers are able to select from a wide range of funding options including Interac Online, online banking, direct debit from bank account, cash via mail, cash in person,
Satoshi Counter: Customers are able to buy face-to-face in Montreal and online in the rest of the country. The exchange also permits Bitcoin transactions up to $1m, though the company requires additional identity verification for larger transactions.
QuickBT: A Canadian broker that sells small amounts of Bitcoin ($200 cap) via Interac Online, Flexepin vouchers or debit card, with the Bitcoins released within minutes of payment.
How to Trade Bitcoin in Canada?
If the sound of a Bitcoin exchange is off-putting, the alternative is to buy and sell Bitcoins via CFD’s brokers. Trading Bitcoin through CFD’s provides the ability to buy and sell the price of Bitcoin without actually holding the currency.
As the market has evolved, trading platforms have also evolved, with traders being offered leverage and the ability to go long and short on Bitcoin by investing in CFDs.
One of the most well-known brokers, providing cryptocurrencies trading, is AvaTrade. Below is a complete guide to buying Bitcoin via AvaTrdae in 3 steps:
Step 1 – Open an Account
Firstly, you need to open an account via AvaTrade. The process is simple and easy and all required is to provide identifying documentation.
Step 2 – Download AvaTrade Trading Platform
Following your account registration, download AvaTrade’s trading platform (we recommend Meta Trader 4) and explore the platform. MT4 is a user-friendly platform that enables all the basic and advanced trading tools.
Step 3 – Fund Your Account
The final step towards trading Bitcoin through AvaTrade is to fund your account. Note that AvaTrade accepts credit card, wire transfer, and Paypal as payments methods.
Where can I Use Bitcoin in Canada?
There are a number of retail and service providers in Canada who accept Bitcoins for payment of goods and services. Dell, Expedia, and TigerDirect.ca are a few. Perhaps of greater interest is Coincards.ca. The company sells prepaid gift cards that can then be used at Air Canada, Amazon, Apple, Cineplex, Costco, Canadian Tire, Toys “R” Us, and many more.
Bitcoin holders are even able to pay their bills using Bitcoin. Bylls provides a platform to pay select from a list of over 6,500 biller companies, send funds directly to your bank account or send funds into a personal payee account for friends and family.
While the number of retailers accepting Bitcoin directly may be on the smaller side, the combined reach of Coincards and Bylls alone is significant and propels Canada into the forefront, when it comes to transitioning away from the use of fiat currency.
For Bitcoin holders looking to keep up to date with which retailers accept Bitcoin, Coinmap is the place to go.
Bitcoin ATMs in Canada
Bitcoin ATMs are not to be confused with the more traditional bank ATMs that are linked to banking networks to allow bank customers to withdraw and deposit fiat money and make other banking requests.
Bitcoin ATMs are linked to the internet and have no connection to the bank networks. The purpose of the ATMs is to provide a platform for the buying and selling of Bitcoin. With a particularly limited verification process, ATMs provide buyers and sellers with a high degree of anonymity, which is one of the desired characteristics of Bitcoin. For this, however, the transaction fees are on the higher side with the limits on the size of transactions being lower than on Bitcoin exchanges.
The world’s first Bitcoin ATM was reportedly opened in a coffee shop in Vancouver back in 2013. The ATM used palm and ID scan technology to allow Bitcoin transactions. Bitcoin was c$200 at the time that the ATM was installed…
There are a total of 304 Bitcoin ATMs in Canada, with the largest concentration of ATMs being in Calgary (30), Montreal (47), Toronto (118) and Vancouver (47).
In Canada, the buying fees of between 7-8% are more in line with the global average of around 8%, while the fees for the sale of Bitcoins are more competitive and in the range of between 4-6%, more aligned with the global average.
Looking at ATM fee averages on a global basis, Bitcoin purchase fees are 8.45% on average, with redemption fees averaging at 7.03%.
To find the nearest Bitcoin ATM, Coin ATM Radar is a good website to search for the nearest Bitcoin ATM. For many, the distances will certainly too great to travel in order to buy or sell Bitcoin, which would leave buying and selling via an exchange or on sites such as LocalBitcoin.
Canada has certainly embraced Bitcoin and is reflected in, not only the easy purchase of Bitcoin from Bitcoin exchanges but with the ability to purchase goods and services across the goods and services sector.
Fees seem to be on the more competitive side, particularly when looking for anonymity and based on the above findings, Canada could be considered as one of the more advanced markets in moving away from the use of Fiat Currency for day to day living.
The downside for those looking to use Bitcoin in the more remote areas of the country is that most of the ATMs and retailers accepting Bitcoin are located in the most populated areas. So, while the major cities may be able to limit the use of the Canadian Dollar, other areas are unlikely to be out with the palm pilot or laptop just yet.
This article was originally posted on FX Empire
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