What is Bitcoin?
Bitcoin is a decentralized cryptocurrency originally described in a 2008 whitepaper by a person, or group of people, using the alias Satoshi Nakamoto. It was launched soon after, in January 2009.
Bitcoin is a peer-to-peer online currency, meaning that all transactions happen directly between equal, independent network participants, without the need for any intermediary to permit or facilitate them. Bitcoin was created, according to Nakamoto’s own words, to allow “online payments to be sent directly from one party to another without going through a financial institution.”
Some concepts for a similar type of a decentralized electronic currency precede BTC, but Bitcoin holds the distinction of being the first-ever cryptocurrency to come into actual use.
1. Create account
Great news, Bitcoin, is one of the easiest cryptocurrencies to buy in Canada. All local exchanges should be able to sell you this currencies. There is no need to create multiple accounts like most crypto currencies. You simply need to create a account at one of the Canadian exchanges.
In order to fund your account you will need to verify your identity. This often involves sending in copies of your drivers license, a utility bill, and in many cases a selfie of you holding your ID. This is normal ask for verification.
As for verification on global exchanges, the verification is usually faster and less intense, as long as you are strictly using cryptocurrencies and not doing fiat transactions. For example on Binance you do not need to verify if you are withdrawing 2 BTC or less.
2. Buy Bitcoin
Now that you have a verified and funded account, you can go ahead and buy Bitcoin. At a basic level it is that easy. If you are buying and selling Bitcoin want to save a bit of money, consider opening a Binance account. It will give you the closest to market price, has the lowest fees, and the most advanced trading platform.
3. Storing your Bitcoin
Now that you bought some Bitcoin, you are currently storing it on the exchange you bought it on. Leaving it here is is OK if the value is small. However, if you own a significant amount it is best practice to transfer it to a private wallet that is ideally not connected to the internet.
If you are just getting started you will probably want to use a software wallet. They are typically free and are considered more secure than leaving Bitcoin on a exchange.
Feel free to do a google search to research what wallets are available and know what the options are. Consider looking for "decentralized" wallets.
The safest way to store Bitcoin, or any cryptocurrency, is with a hardware wallet that is not connected to the internet. This is to prevent it being stolen or hacked from a exchange or a wallet connected to the internet.
Consider looking at the Ledger line of hardware wallets. They have been in the industry a number of years and offer one of the widest selections of devices.
Make sure you take the time and save your recovery information! Many people have lost small fortunes not doing this.
This is generally not recommended. However, you might want to do this if you are actively trading Bitcoin. Be aware you are taking an extra risk. Exchanges have been known to get hacked or disappear, search QuadrigaCX scandal.
The main advantage of doing this is instant access to your Bitcoin, and saving the fees associated with transactions and withdrawing.
Always consider the reputation and size of the exchange if you are storing a cryptocurrency asset on it.
Generally speaking, I do not keep a balance on any of the local exchanges. If I am going to hold a balance of a cryptocurrency coin/asset on an exchange it will be Binance as they have the most robust platform. However, use this information at your own risk. The safest place for your crypto assets is a hardware wallet like Ledger.
Regardless of the exchange, if you are holding assets on the exchange, make sure you enable two factor authentication and use a separete secure password on the account.
- Create an account on Newton or similar
- Buy Bitcoin
- Consider storing Bitcoin in a private wallet