Here, let’s talk about what Bitcoin is, how it works, why it has value, and how you can invest in cryptocurrencies. These are important things to learn before you find a website to buy coins Bitcoin in Canada. After reading this article, you can make better informed decisions about your crypto investing.
What is Bitcoin?
First, Bitcoin is digital money. You can use it to send and receive payment as well as buy and sell goods and services (many businesses now support Bitcoin). What makes Bitcoin and other cryptocurrencies different is that they’re decentralized.
Bitcoin being decentralized means you can use it without being approved by the government or a central financial institution. It works by using a peer-to-peer network where assets are transferred directly. These transactions are recorded on a shared public ledger that’s secured by cryptography.
In other words, it’s a new way to pay and do other financial transactions. It’s just an electronic form of money that we can use for this Internet age. With its utility and underlying technology (blockchain and cryptography), people and businesses have been exploring and adopting Bitcoin and other cryptocurrencies in their daily lives and transactions. In addition, Bitcoin has become a popular investment vehicle that investors and the public continue to monitor.
Most people are just interested in Bitcoin as an investment instrument. In other words, they’re mostly interested about whether its price will go up or down. Whether it has utility or not, still, Bitcoin has been attracting the interests of many because of its potential to bring riches or significantly increase the price of our crypto assets.
How does Bitcoin work?
Bitcoins don’t require a physical form. Instead, they’re created and stored electronically. This happens through blockchain technology which is the heart of how Bitcoin and other cryptocurrencies work.
Blockchain is an electronic way of recording data and transactions. In other words, it’s a database that stores information which maintains a decentralized record of transactions. There’s no need for a trusted third party because cryptography does the work of securing the transactions and information.
In a conventional database, information is usually organized into tables. In contrast, in blockchain the information is organized into blocks that are linked together (hence the name, blockchain). Every time a block is filled, the record becomes permanent and immutable (it’s set in stone). A fresh block is made and then chained into the previous block. The result is a chained series of data arranged in a chronological order (each block has an exact timestamp).
Because blockchain is decentralized, no single individual or group has control. Instead, all users retain control and there’s no central entity that solely decides on what happens to the network. And because decentralized blockchains are immutable (set in stone), the data and transactions become irreversible.
That’s how blockchains work and this technology is at the heart of Bitcoin, Ethereum and other cryptocurrencies and blockchain networks. It’s different from the conventional money we have where there’s a central entity or a third party. In blockchains, all users retain their control and the transfers and transactions are peer to peer.
Why does Bitcoin have value?
Bitcoin is just digital money but why does it have value and why does 1 Bitcoin equal to thousands of Canadian dollars?
It’s all about the market and our perceptions. In other words, we’re the ones who assign value to Bitcoin. It’s a collective agreement where we see Bitcoin as something of value or will gain a high value in the future. Whether it’s actually useful or not, we’re still the ones who assign value to Bitcoin and our collective actions (e.g. buy and sell, government regulations, law of supply and demand, market forces) influence how much each Bitcoin is.
It’s similar to the Diamond-Water Paradox where it’s puzzling why diamonds are pricey while water is cheap. Although we can’t live without water, it’s still cheap. In contrast, we can totally live without diamonds but still their prices are out of reach. One explanation is that water is plenty while diamonds are scarce. However, scarcity doesn’t automatically translate to value (no matter how scarce it is, we can still live without it).
Part of the answer is we decided how much diamonds are worth. Our perceptions say that it’s beautiful and valuable. As a result, we have placed a high price tag on those little pieces of rock. It’s a similar case with Bitcoin and other cryptocurrencies. Our collective perceptions and actions as well as the market forces have determined that Bitcoin is valuable, whether or not it will totally disrupt finance and society.
How can you buy Bitcoin?
Now, it’s up for you to decide whether Bitcoin has real value or not (and whether or not you would invest in it). But if you’re planning to diversify your investment or somehow start with investing (whether stocks, real estate, or cryptocurrency), it’s still good to consider crypto investing because it’s still popular and the market is still dynamic and evolving.
To start, you can sign up to Coinberry, a top-of-the-line platform in Canada for crypto trading. It’s one of the easiest ways to buy some Bitcoin and start your crypto investing journey. Over 200 thousand Canadians have already signed up, and the platform has exceeded $1 billion in terms of trading volume. They have chosen the platform because it’s insured, registered with FINTRAC and OSC, and easy to use. On top of this, it’s PIPEDA compliant and has zero CAD deposit and withdrawal fees.
As a result, both beginners and seasoned investors gain peace of mind about their funds, investments, accounts, and personal information. In addition, beginners find it easy to finally get started even without acquiring technical background information about cryptocurrencies and blockchains. Finally, many have been able to start and see what crypto investing is all about.
When you start your crypto investing journey, it helps to minimize your risk. For instance, at Coinberry you can start for as little as 50 CAD. You can add more funds and buy more Bitcoin anytime as you get more comfortable with cryptocurrencies. With this small start and low risk, beginning your crypto investing journey becomes much easier.
Veeramachineni Lalitha
I am Finance Content Writer. I write Personal Finance, banking, investment, and insurance related content for top clients including Kotak Mahindra Bank, Edelweiss, ICICI BANK and IDFC FIRST Bank. My experience details : Linkedin