On the fence about investing in cryptocurrency—and more specifically—Bitcoin in Canada?
This article will dive into all the reasons why you should buy Bitcoin in Canada and why investing in the world’s most popular cryptocurrency might be a good idea.
Let’s dive in.
What is Bitcoin
Bitcoin is a decentralized form of currency that has no financial institution or government involved as a regulatory authority.
Unlike traditional money, Bitcoin derives its store of value from a decentralized ledger of all transactions made in the currency called the blockchain. All Bitcoin transactions are recorded here, and the computing concept of cryptography is used to ensure that elements of this decentralized ledger cannot be tampered with.
While the popularity of cryptocurrencies has been steadily rising with more and more coins coming up every day, Bitcoin is one of the oldest and currently the most valuable cryptocurrency out there today. The supply of Bitcoin is capped at 21 million, and its price is only expected to go further up due to the limited supply and the investor belief that it will take the form of ‘digital gold’.
6 reasons why buying Bitcoin in Canada is a good investment
Before we dive in if you’re already convinced about Bitcoin as a crypto investment, learn more about how to buy Bitcoin in Canada.
In the case that you’re still unsure, let’s look at the reasons why you should consider buying Bitcoin in Canada.
#1 Transactions speeds are quick compared to traditional financial institutions
Traditional banking methods have many checks and balances in place to ensure that the movement of all forms of money is completely safe. For most assets in Canada, transactions are done via different kinds of financial intermediaries who have strict procedures in place for when you wish to make a transaction.
For the very same reason, transacting in assets like stocks, or even wire transfers can take a long amount of time—in some cases going up to even a few days.
This is where cryptocurrencies like Bitcoin solve the problem of slow transaction settlement times. With Bitcoin, you can make a transaction in a matter of a few minutes. All you need to wait for is to have your transaction registered as a block on the underlying blockchain (the decentralized ledger of all transactions) of the cryptocurrency.
In the case of transacting internationally, Bitcoin becomes even more valuable as an asset because you don’t need to go through multiple financial intermediaries across borders, and hence have better settlement times.
#2 Transaction costs are relatively low compared to traditional banking
The median transaction cost associated with cryptocurrencies like Bitcoin is far less than what you would have to pay for transacting through traditional banks. For instance, a wire transfer done within Canada can cost up $15-20 in transaction costs.
Transaction costs are lesser for cryptocurrencies—but you should always bear in mind that the associated costs might go up as demand goes up and the underlying blockchain gets more congested.
#3 Cryptocurrencies like Bitcoin have more accessibility than normal banks
Cryptocurrencies are purely ‘digital’ forms of currency, meaning that they are not tethered to any physical form like traditional paper currency. It’s easy to set up your digital wallet for buying cryptocurrencies like Bitcoin as well—all you need is a mobile phone and an internet connection.
Also, the process for buying and then transacting in Bitcoin is easy as well. Unlike banks and traditional financial intermediaries, you do not have to go through extensive documentation for setting up an account. If you find the process of setting up a normal bank account to be cumbersome and needlessly extensive, then choosing Bitcoin would be a good option because there is no centralized authority involved.
#5 Bitcoin is far more secure than other financial assets
When it comes to security, Bitcoin and other decentralized cryptocurrencies are far more secure than present ways of transacting money.
It’s nearly impossible for someone to gain unauthorized access to your Bitcoin wallet without your private key because of the underlying cryptographic nature of the blockchain. However, keep in mind that once you lose your private key, you lose all access to the Bitcoin you’ve invested in.
Apart from the nature of the blockchain and the way that it is set up, there is a distributed network of computers that are linked together that carry out the verification process. As more computers get added to the Bitcoin network, the security of the blockchain that supports the cryptocurrency becomes even stronger.
Also, cyber threats are mitigated due to a great extent by cryptocurrencies and the blockchains that support them. Any attack or attempt to tamper with the blockchain would require a ton of computing power to verify different blocks of the entire blockchain first before making a change to the ledger.
#6 Bitcoin is more transparent
Any transactions that you make in Bitcoin, or any other decentralized cryptocurrency for that matter, will be stored in a publicly distributed record or ledger—aka the blockchain.
While this is a public store of data pertaining to all transactions that have happened in a given cryptocurrency, there will not be any personally identifiable information at all.
On the public ledger, there are different ways that you can look up information about each transaction that is made. Information about how much Bitcoin you have transacted in when the transaction has happened, and the location associated with the same. This can also go a long way in preventing fraudulent transactions as people can turn to the recorded store of data for proving any details about a given transaction.
Buying Bitcoin in Canada—how should you go about it
There are multiple ways that you can invest or buy Bitcoin in Canada.
You can either open a digital wallet on Bitcoin exchanges, via bitcoin ATMs, or something like a Bitcoin contract for difference (CFDs).
The former two showcases legal possession of Bitcoin in Canada whereas the latter allows you to exploit the fluctuating prices of Bitcoin to make a gain. Let’s dive into the details of how you can actually go about purchasing bitcoin with a Bitcoin exchange, which is by far, the most convenient way to do it.
1. Decide on your choice of a crypto digital wallet
There are numerous Bitcoin exchanges that allow you to open a digital wallet on their platform and hold the Bitcoin that you purchase. While there are plenty of options, make your choice based on research and what seems to you the most convincing choice.
2. Register your account with the crypto platform
Provide all the necessary information for registering your account on the crypto platform and opening an account with them.
3. Set up your 2-factor authentication
This is crucial to set up so that the security associated with your crypto account is strong and cannot be compromised in any manner.
4. Purchase bitcoin in CAD or Canadian dollars
Once you’ve got your account up and running, you can move to the final step of the process—which is to actually buy the amount of Bitcoin in your preferred currency—which would be in Canadian dollars.
Choose the payment method that you would like to make the transaction in, and you are good to go.
Note that some crypto wallets require you to provide additional information or document verification for this final step in order to ensure maximum security.
How you can use Bitcoin for regular transactions in Canada
Okay—now that you’ve purchased Bitcoin and have it in your crypto wallet of choice—you might be wondering if you can actually use it like how you use a fiat currency.
The answer is yes. However, the number of service providers who do this is quite few.
While bigger companies are beginning to recognize the rise of cryptocurrencies and even accept them as a form of payment in Canada, there are other service providers who allow you to convert your Bitcoin into gift cards and vouchers. You can use these converted prepaid gift cards at e-commerce stores, physical retailers, and more.
In recent times, different startups are coming up in Canada that allow you to even pay your bills in Bitcoin. All you have to do is send you bitcoin via the provider, and they immediately convert your Bitcoin to fiat money, and the converted amount is immediately reflected in the receiver’s bank account.
Given that cryptocurrencies like Bitcoin are still in their nascent stages in Canada, services in this vein are few. But you can expect more crypto-related offerings to come up in the future with wider acceptance and popularity of Bitcoin.
Diversify your investments by buying assets like Bitcoin in Canada
We’ve covered some of the numerous benefits of investing in an asset like Bitcoin in Canada. To recap, some of Bitcoin’s main advantages are faster transactions, greater efficiency, stronger security, and more transparency.
Given these advantages, it’s ideal to enter a cryptocurrency like Bitcoin in the earlier stages so that you maximize your chances of making bigger gains.