What’s Bitcoin?
Bitcoin is a digital currency that lets people quickly send and receive money without a central authority or bank. Bitcoin was first thought of in a whitepaper written by Satoshi Nakamoto in 2008. Satoshi Nakamoto is a pseudonym for a person or group of people whose real identity has still not been revealed.
There will never be more than 21 million Bitcoins in circulation because the number of coins is fixed at 21 million. This means that Bitcoin is a limited resource, like gold, which makes it the opposite of inflation (deflationary).
ew Bitcoin miners use very powerful computers to solve difficult problems in order to make Bitcoins. This way of making cryptocurrency is called “proof of work” because miners get paid for the work they do to solve problems.
A Satoshi is the smallest unit of a Bitcoin. It is worth one hundred millionth of a Bitcoin. Since Bitcoin can be broken down into such small pieces, Bitcoin transactions can be even more precise than fiat (cash) transactions. This makes Bitcoin a great solution for the growing number of micro-transactions that support the web.
The Good and Bad of Trading Bitcoin
Investing in Bitcoin in Canada or anywhere else has both good and bad points. Here are a few of the most well-known:
Pros of Investing in Bitcoin
Bitcoin has a high chance of giving investors huge returns. From 2012 to 2022, Bitcoin grew by an average of 144% per year, as shown in the table below. This is much faster than any other common asset class.
Bitcoin can be sent across international borders without any problems. This makes global trade and the flow of money easier and cheaper.
Bitcoin isn’t run by a government or central bank, so it’s hard for the government to freeze your holdings. But institutions are getting more control over how cryptocurrencies move in other ways, so this benefit may become less obvious in the years to come.
Why You Shouldn’t Trade Bitcoin
Bitcoin’s price can change a lot, which makes it hard to predict as an investment.
Bitcoin is still mostly unregulated, which means that the whole industry is still a bit of a wild west. There isn’t much government or regulatory oversight to help you if you make a mistake or get ripped off.
Even if someone does something wrong or fraudulently, they can’t take back a Bitcoin transaction. There are times when not being able to change a transaction is a good thing, but there are also many times when being able to change some transactions, like you can in the traditional banking system, is also a good thing.
There are some other advantages of Bitcoin crypto trading that have become less important over time. For example, Bitcoin transactions were meant to be mostly anonymous and hard to track in the beginning, and for the most part, they were. Today, though, most cryptocurrency platforms require their customers to show government-issued ID when they sign up. This is part of a process called “know-your-customer,” or “KYC,” and it means that if a government agency needed to find out who was behind a Bitcoin address, it wouldn’t be hard to do so.
How Bitcoin’s value has changed over time
The way Bitcoin has done financially can’t be ignored. Since 2012, Bitcoin has grown at a rate of 144% per year on average, which is much higher than almost any other asset class. If we count Bitcoin’s first few years, when its price was very low (2008–2012), the CAGR goes up even more, to about 200% per year.
To give you an idea of how impressive Bitcoin’s financial performance has been, here’s how it compares to the performance of other assets over the same time period:
- Asset CAGR (2012-2022)
- Gold 2.3%
- S&P 500 12.6%
- NASDAQ Composite 19.6%
- AAPL (Apple Stock) 29.8%
- Bitcoin 144%
The 3 Best Places To Trade Bitcoin In Canada
Here are my top three choices for the best places in Canada to buy Bitcoin with cryptocurrency:
CoinSmart is a very safe exchange because the Ontario Securities Commission (OSC) has named it a Registered Marketplace, FINTRAC has registered it as a Money Services Business, and TRUST, a group that works to stop money laundering, is a member. As a publicly traded company, their finances are checked by a third-party firm at least once a year. They have a 95% cold storage policy.
When you fund your CoinSmart account for the first time, you’ll get a $50 bonus that you can use to buy Bitcoin, Ethereum, or any of the other 16 assets CoinSmart supports. CoinSmart is a great choice if you want a crypto platform that is trusted and has a high level of security.
5,500+ crypto assets can be stored on the Fe Ledger Nano X.
You can also use a Bitcoin ATM to pay for your purchase. Canada card in Canada, but you can expect to pay between 3% and 5% in fees when you use it to buy something. If you can, I suggest sending money to your exchange via INTERAC e-transfer, which is usually free and can be used for up to $3,000 worth of transactions per day.
Can I use PayPal to buy Bitcoin in Canada?
You can’t buy or sell Bitcoin with PayPal in Canada right now. You can only do this in the US, and all transactions must be done in US dollars, not Canadian dollars. Read our in-depth post on the subject here to find out more.
Would you like to make $50 in the next six minutes?
CoinSmart is a highly rated and fully regulated cryptocurrency exchange in Canada that gives new users $50 when they deposit $200 or more. You can trade with low fees and get your money out whenever you want.
