How To Buy Cryptocurrency In Canada
How To Buy Cryptocurrency In Canada – In 2020, it is difficult to not hear of the word cryptocurrencies. They are slowly but surely gaining mainstream popularity. The people world over want to learn about them and invest in them. This article explains the concept of cryptocurrencies and how you can get involved, especially if you’re living in Canada.
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What Are Cryptocurrencies?
Cryptocurrencies are a form of digital currency that is decentralized, where the people are in control of their own money. Most cryptocurrencies are based on blockchain technology. Users can send and receive crypto to and from anyone in the world without having to go through an intermediary. This does away with the need to have a central authority that is in charge.
Different Types of Cryptocurrency
There are many different types of cryptos. The first one was bitcoin which is still the largest and most popular cryptocurrency in the world. The different cryptos are trying to address different use cases. They are also trying to solve specific problems to further develop the financial system of the world. Some of the popular cryptos are as follow:
Bitcoin is the world’s first cryptocurrency. It is a peer to peer payment network that allows anyone to send the digital currency on it. It came to life in January 2009 and was created by an anonymous person or a group of persons known as Satoshi Nakamoto. After more than a decade of existence, bitcoin is regarded more as digital gold and people love to hold it. The gains provided by bitcoin have trumped everything else in the financial world.
Ethereum is the second most popular crypto in the world. It is a smart contract platform that was initially built to be a world computer. Developers can use this blockchain to build decentralized apps. The next version of Ethereum (Eth 2.0) is going to deliver on the initial promise.
The goal of cryptocurrency developers has always been to onboard masses. Dash was actually created for this purpose. They want to bring crypto to the mainstream so that the world can switch to crypto entirely. It was designed to be fast, secure and very easy to use. The cherry on top is that there are almost no fees to use this crypto.
The story of Doge is quite an interesting one. It was created as a fork from Litecoin in 2013 and was based on the popular “Doge” internet meme. Initially, it was used as a tipping system on Reddit and Twitter. The idea was to reward content creators or those who share content.
USDT is one of the most important cryptocurrencies in the world. It is a stablecoin which means that its value is pegged at $1 USD. It provides a great way for crypto enthusiasts to preserve their profits. It can also be used for payment purposes and makes cross-border payments quite easy.
After bitcoin, one of the first cryptocurrencies to be created was Litecoin. It was based on bitcoin’s protocol but it differs in the hashing algorithm used. As the name suggests, it was intended to be a lighter version of bitcoin. It is one of the cryptocurrencies that mainstream users might use for payments in day to day life.
XRP is a cryptocurrency that is not exactly based on blockchain technology. It is based on XRP ledger which is a distributed consensus ledger. XRP was created to help legacy financial institutions to benefit from the capabilities of cryptos. It makes cross-border payments easier by serving as a bridge between different fiat currencies.
How To Send And Receive Cryptos
Using cryptocurrencies is fundamentally different than using fiat currencies. Users are the sole controllers of their money and there is no central authority in the process. The blockchain keeps immutable records of who owns how much. There are mainly two ways to store cryptocurrencies.
There are several hardware and software wallets where users can store their cryptos. The most secure is a hardware wallet as it is an offline storage method. For each of your cryptos, a unique address is created secured by a unique private key. You can store your different types of cryptos in a single hardware or software wallet.
These wallets provide additional feature of sending and receiving crypto. All you need to know is the cryptocurrency address of the receiver. You can choose how much to send and then sign the transaction with your private key. Basically you have to enter a password of some sort and you’re done.
Online Exchange Wallet
You can also choose to store your cryptos in online exchanges. But in this method, you are not the sole controller of the crypto. The exchanges work hard to store your crypto as securely as possible. But there’s always a risk.
Online exchange wallets make it really easy to send and receive cryptos. All you need is the receiver’s crypto address of a particular cryptocurrency. Then you enter it in the interface, type in how much you want to send and send it their way.
How To Trade Cryptocurrency In Canada
Cryptocurrency trading in Canada has seen a huge explosion of interest in recent years. As such, the Canadian cryptocurrency market has become one of the world’s most important one. There are many Canadian crypto exchanges where you can register to get started.
Steps to trade cryptocurrency in Canada:
1. Register on an online exchange.
2. Complete the KYC process.
3. Fund your account with fiat currencies using any available methods.
4. Buy the cryptocurrencies of your choice.
5. Trade against your pair of choice (example: btc-usdt)
Are Cryptocurrencies Legal In Canada?
Many people today still have this question. “Is bitcoin legal”. The answer is yes. Bitcoin trading in Canada is perfectly legal. In fact, most cryptocurrencies are legal and you easily buy, sell, trade and even hold them. One of the things to keep in mind is that it is better to store your cryptos in your own wallet. Doing this is important otherwise securities law may apply in case you don’t.
Is There Tax On Cryptocurrency?
Many people wonder whether there is a tax on bitcoin or tax on cryptocurrency in general. The answer is yes. The gains you make from cryptocurrency are taxable. These can be mainly classified into either business income or capital gains. It is best to download your transaction data from your Canadian bitcoin exchange and take help of a tax expert.
We hope you enjoyed How To Buy Cryptocurrency In Canada. Also check other popular reads How to buy Bitcoin Canada, How to buy XRP Canada, How to buy Ethereum Canada
– How To Buy Cryptocurrency In Canada
Given the uncertainty surrounding the taxation of bitcoins in Canada, the tax consequences may be different depending on how they were acquired.