Learning about bitcoin and other cryptocurrencies can take some time and this article barely scratch the surface. I’m doing my best to walk you through the process of discovering this universe. I will continue adding content and I recommend reading the entire article. But in case you just want a summary, here it is:
- This is by no means any legal advice; I’m not a financial professional, tax/accounting professional, investment professional, etc; it’s what I’ve learned so far that I’m sharing.
- You only pay taxes when you exchange your bitcoin and other cryptocurrencies in Canadian dollars (or any other fair currency); other transactions are subject to tax as well, depending on what you use the bitcoin for. More details are on the Canadian Government website’s here. Another good resource for taxes and bitcoin is the Coinberry blog.
- You don’t need to buy 1 Bitcoin. You can buy as little as 50$ worth of Bitcoin.
- The services for buying bitcoin and other cryptocurrencies in Canada that I use or have used in the past are Coinberry, Coinsquare, and BullBitcoin.
- Sometimes I like to trade on Binance (not a Canadian service) – but regulations made it difficult for Canadian residents to do so.
- You can store your bitcoin on LEDN – this is a platform that’s like a bank: you’re paid interest on your deposits (around 6%APY for BTC and 10%APY on USDC) and you can also borrow fiat against your bitcoin (in case you don’t want to exchange your bitcoin and pay taxes and potentially lose a lot of money in case bitcoin goes up).
- If you don’t know what bitcoin, blockchain and cryptocurrencies are, this article here is a good place to start (hopefully). Other good resources are
Andreas Antonopulos’ Canadian Senate speech, and his two books: Mastering Bitcoin and Mastering Ethereum. Also, this video with Mark Cuban on the Bankless podcast goes through a lot of details of why Ethereum (and DeFi) is the next big thing. A recent interview with Vitalik Buterin by Tim Faris (the author of The 4-hour Workweek) explains where Eth is going in 2021 (and why Ethereum’s value could increase). And of course, the Blockchain Revolution book with this TED Talk video by Dan Tapscott (also Canadian) can paint a picture of what’s coming.
- Never invest what you can’t afford to lose; bitcoin and other cryptocurrencies are extremely volatile and a lot of people have lost a lot of money; some made fortunes. Remember, you’re on your own. Also, remember that they are subject to regulations.
- Remember, the technology is still new and not that easy to operate with. But that’s where we’re going, so you better hop on this train as early as possible. I often tell people: “It’s like the internet in the ’90s. You want Netflix but that’s not yet possible.”
- You might expect delays in withdrawals (crypto and fiat), accessing accounts, verifications, etc. You need to be patient, and always invest what you can afford to lose.
- Not your keys, not your money – don’t keep your bitcoins and other cryptos on platforms or exchanges (especially large sums). The safest way is to store them offline, in a wallet such as Ledger or Trezzor. But be careful, because there have been reports of tampered hardware wallets. You may trust the website you’re ordering from, but can you trust who delivers it? There are other safe ways to store your crypto, but for that, you need to do your research.
- Regardless of the narrative you might hear, everything on the blockchain is transparent: all the transactions are public, and you can see how much was transferred to, from who to who. You don’t see your name, obviously, just your address generated by your wallet (a string of letters and numbers). But since most of the services requires some sort of identifications (KYC – Know Your Customer) all the transaction can be traced back to you. Don’t try to avoid or scam someone (especially the Government).
- You can use Brave Browser instead of Chrome or Safari; it’s better, has a build-in ad-block and you can earn BAT tokens.
- You can check the prices on a website called Coinmarketcap.
- Note: this article is not yet finished and most likely information will be added as they come up.
Now, I strongly recommend you take the time and read this article. Also, do your own research, and remember that this is ongoing learning.
Crypto is a hot interesting topic (and will be for the next couple of years) and what better way to share my knowledge and experience so far than to write blog posts. I recently heard about a friend who got a call from a shady company offering him to buy some bitcoin – which he did. It wasn’t much (300$CAD) and the company was a legit shady company, who took a big commission – bottom line, he has the BTC, but it’s in a wallet with that firm and he needs to pay some extra $ to have access to it. The company is based in Malta and apparently, they are ok to operate.
And apparently, this happened last year so he made some good money because Bitcoin went up significantly. But still, not your keys, not your money.
These things happen all the time, and because this technology is still new, there’s room for many scams that everyone’s exposed to (don’t think that if you know more than others, it’s less likely to get scammed).
Since I found myself explaining what bitcoin, blockchain and cryptocurrencies are to my friends, I thought, why not write a blog post about it so I can simply give them the link – I know they won’t go through all of it, but you will. And thank you.
This is intended to be a how-to guide on bitcoin and cryptocurrencies in general since Canada is a hub for blockchain applications. I also intend to keep adding content, so depending on when you arrive here, you’ll see new updated information.
Disclaimer: I am not a financial advisor and by no means you should take this as financial advice. As a rule of thumb, never invest more than you afford to lose (not just in crypto). I’m just sharing some of my personal experiences I had so far. Opinions are also my own (obviously).
Even the financial advisors use this disclaimer nowadays – seems like no one wants to take responsibility for what they are saying. Sounds weird, right?
What do you need to know about bitcoin and crypto in Canada?
Canada is probably the most advanced country in regards to how it treats bitcoin, cryptocurrencies and any blockchain projects. Ethereum, the second most popular blockchain project, was created in Canada, as well as several other projects in the field. Indeed, Canada is a pioneer also in regards to its tax treatment.
Do you have to pay taxes on Bitcoin in Canada?
In Canada, you pay taxes when you exchange Bitcoin for fiat currency – Canadian dollars for example. So as of April 2021, you don’t pay taxes on the Bitcoin (or any other cryptocurrency, including stable coins like USDT) you own – only when you exchange them.
Also, if you use bitcoin to pay for goods and services, those transactions might be subject to taxation. If you mine bitcoin, that’s another story as well. But for the majority of people who see bitcoin as an investment, buying and holding, there’s nothing to do. It goes without saying that you should keep track of every transaction (it’s not like they are public anyway :P). More information can be found on the Canadian governments’ website.
So yes, remember. Regardless of what you might hear, all transactions are public – the blockchain is essentially a public ledger. You can’t see your name, you’ll see just a string of characters that represents your keys with which you can access your bitcoins on the bitcoin blockchain.
I lost you, didn’t I?
Let’s take a step back and talk about what is the blockchain, who invented it, why is it different and why do I need it.
Throughout my journey, I discovered individuals far smarter than I who can explain this universe better. I recommend watching this video by Andreas Antonopoulos, a leading ambassador for blockchain and bitcoin. He was in front of the Canadian Senate in 2014 explaining the concepts. What better example than this video can someone give?
This should be studied regardless of your decision to invest or not in bitcoin or cryptocurrencies.
Andreas also wrote a book called Mastering Bitcoin which is not as technical as one might think. I would go as far as to name it the manual, although it is not exactly that. But it is a good place to start, and if you’re not a software engineer, and considering this space is complicated, you’ll find other books harder to read and understand.
Andreas is a professor, so he has the skills to make you understand something as complicated as bitcoin and blockchain, using simple words and associations. It’s safe to say that he’s a trusted source in regards to everything (especially technical) on bitcoin and blockchain. And the best part is he’s putting (for free) a lot of content out there. You can probably spend the next year (easily) browsing his YouTube channel. He also has a book called Mastering Ethereum, which is another successful blockchain project.
Where can I buy Bitcoin and crypto in Canada?
I’m glad you asked. Here’s the short and sweet answers, and the companies I use to buy my crypto.
You can also keep your bitcoins or USDC on LEDN, a platform that pays you interest on the crypto you store with them and also offers you the option to borrow fiat against your crypto.
Let’s discuss them individually.
Soon to be listed on the TSX Ventures. Hands down the best services when buying and selling crypto in Canada, from a user’s perspective. I’ve worked for Coinberry for a couple of months as a freelance digital marketer, but that’s not the (main) reason why I say Coinberry is the best for buying and selling. Especially if you’re new to this space.
They managed to streamline the process in a way that makes it simple and efficient. It’s simply easy to use and intuitive. They communicate constantly via Twitter and blogs and keep up with their growing customer demands.
Blockchain is still a new environment and as I said several times before, it’s not an easy environment. It involves money (value), it acts sometimes like a bank account, but it’s not as easy as a bank account (I would definitely argue on this one) – regarding the interface. Only a couple of years back, your wallet was not just a simple app that you could install on your phone. You had to initialize it by writing the code yourself, testing it first, etc.
Like the internet in the 80s. Now we’re in the 90s, so still, a long way till we’ll have Netflix. Using Apps like Coinberry makes the process really simple and intuitive.
Wallet = digital applications where you store your crypto – that statement isn’t true because you store only the keys that access the assets you have on the blockchain because your crypto never actually leaves the blockchain, more on that later.
You might have heard about QuadrigaCX. If not, here’s the short version: Quadriga CX was a successful Canadian trading platform from Cryptocurrencies. And then the founder died. The problem was that the keys to access all the funds on the platform were with him. Again, not your keys, not your coins. The circumstances of his death are subject to investigations, but that leads to a series of regulations to ensure that won’t happen to other platforms (that’s why I use the platforms that I recommend). So yes, you need to learn. As I said, this is a good place to start.
Since 2021, Coinberry added many crypto currencies you can buy from their platform. This is a huge step in crypto adoption and obviously an opportunity for investors and enthusiasts to get their hands on some possible great new tokens that could possibly go up in value.
Coinsquare is another Canadian crypto currency trading platform. It’s pretty straight forward and has a nice interface. It seems secure and legit. It has also an advance trading feature for the day traders so it gives you the full trading experience.
Coinsquare used to be the only legitimate option Canadian residents had to purchase tokens like Dash or Dodgecoin. Since then, others have introduced those to the market but they deserve the due respect of being the first.
Through BullBitcoin you can buy only Bitcoins. It’s an automated process that runs smoothly and I’ve used them in the past and had a good experience. You can also buy giftcars for HomeDepot or Cineplex using your btc, and other perks.
Ledn is not a place from where you can buy bitcoin or any other crypto but it’s a great place to store them, as they give you a great interested APY.
Again, you need to remember, not your keys, not your wallet.
All these services requires a thorough verification for Canadian residents – and it should be like that.
FAQs About Bitcoin
Not related to the Canadian market, here are some general answers for your crypto questions in general. This section weill be continually updated.
What is Bitcoin?
Bitcoin is a cryptocurrency and a digital payment system. It was invented by Satoshi Nakamoto in 2009 and released as open-source software in 2011. There is no third-party involved and the money is transferred to and from people without any individuals acting as a middleman. This is done peer 2 peer by verifying the transaction on the network with other computers that hold a copy of the chain. All of this information is stored in what we call The Blockchain.
Who invented Bitcoin?
It was invented by Satoshi Nakamoto in 2009 and released as open-source software in 2011. No one knows who Satoshi Nakamoto is. Supposedly, it means the intelligence of many and there are many legends behind it. I personally think that it’s a group of smart individuals who needed to launch something like this unde a symbol, as their own personal name wouldn’t mean much. Thinsk of that scene from Batman begins!
What do you use Bitcoin for?
You can use Bitcoin as a medium of exchange for goods and services or as a store of value.
How much is a Bitcoin?
As of November 6th, 2021, 1 Bitcoin is $77,270.90 Canadian dollars.
Do I need to buy 1 Bitcoin?
No, you can buy bitcoin worth of 100 dollars if you want. Most services requires a minimum purchase of 50$ CAD.
_________More questions to be answered soon_______________________
- What is blockchain?
- What is a miner?
- What is proof of work?
- What is proof of stake?
- What is staking?
- What are cryptocurrencies?
- What is a Crypto Wallet?
- Types of Crypto Wallets
- What is a cold wallet?
- What is a hot wallet?
- What. is a hardware wallet?
- What is a bitcoin address?
- What is Ethereum?
- What is an ICO?
- What is DeFi?
- What are NFTs?
- What is trading in crypto?