Despite the well-publicized selloff of Bitcoin in recent weeks, it’s still the largest cryptocurrency in the world by market capitalization, and for good reason. It’s the original digital currency, created in 2009 by an unknown person (or persons) under the pseudonym Satoshi Nakamoto. While we know almost nothing about Nakamoto, Bitcoin’s meteoric rise and enduring relevance is no mystery. Given its trajectory, it’s no wonder that Canadians are investing in Bitcoin.
Bitcoin has a history of perseverance since its creation; Bitcoin has weathered countless drops and has even been declared “dead” more than 200 times. Nevertheless, the granddaddy of crypto soldiers on, and many prominent voices believe that its value will continue to rise. In the midst of the recent sell-off, Ran Neuner, host of CNBC’s Cryptotrader, predicted that a single bitcoin will be worth $50,000 USD by 2019. Kerim Derhalli, founder and CEO of Investment app Invstr, predicted that bitcoins will soon be worth $100,000 each. If you like the sound of these predictions, you may want to get started with digital currency today while prices are comparatively low.
Bitcoin has outperformed virtually every other asset for the past five years, and the crypto market is still in its infancy. With a continued influx of new money, driven in part by media coverage, there’s every reason to believe that the market will continue to grow. In addition, as more people buy into Bitcoin, it’s likely that the price will stabilize over time. That said, the market is still highly volatile, and Canadian investors would be wise to take heed of this time- tested adage: don’t invest what you can’t afford to lose. In this volatile market, it’s important to get the latest crypto news before you make any investment decisions.
How does Bitcoin differ from traditional currency? Unlike fiat currency, you can’t hold a bitcoin in your hand. It’s a digital currency, meaning that it only exists online.
Bitcoin is based on a revolutionary technology known as the blockchain. The blockchain is a system through which strangers can securely exchange assets—bitcoins, alternative digital currencies or “altcoins,” and so on—without the help of a third party watching over the process.
Before Bitcoin, online transactions required a mediator, like PayPal or a bank, to keep track of how much money is being held and moved around. That’s because transactions in the digital space are vulnerable to the “double-spending problem,” where someone could theoretically produce a digital copy of an asset they have already used and spend it again. Mediators keep a ledger that tracks how much money moves around to make sure that this doesn’t happen.
The blockchain solves the double-spending problem without introducing a mediator. Without going into the technical details, which are complex even for experienced programmers, the blockchain uses cryptography to secure transactions and stores its ledger in public view in many places at once. This is what it means to say that Bitcoin and other cryptocurrencies are “decentralized”—the public ledger of transactions for any digital currency is not owned by anyone in particular, lives in multiple locations on the internet, and thanks to Nakamoto’s unique innovation, cannot be tampered with.
Technically, it’s both. No longer relegated to the depths of the dark web (where it was favoured for anonymity reasons), Bitcoin can be used to buy a wide range of goods and services including flights, gift cards, tuition fees at some universities, and even pizza. You can quickly look up the value of cryptocurrency and currency converter tools to find the going rate to trade BTC and CAD. An increasing number of major retailers are beginning to accept Bitcoin, including Microsoft and Overstock. In addition, since Bitcoin is one of the major trading pairs for altcoins, you can use Bitcoin to enter the altcoin marketplace.
If you prefer, you can simply buy Bitcoin, store it securely, and wait for its value to appreciate. Keep in mind that you can buy tiny fractions of Bitcoin, so you don’t necessarily need to invest thousands of dollars at once. Not sure how Canadians can buy Bitcoin with fiat currency? Look no further than Bitbuy, an online platform that simplifies cryptocurrency transactions and offers lower fees.
At Bitbuy, we aim to be the best cryptocurrency exchange in Canada by providing secure ways to buy and store cryptocurrency, lower fees, and an easy-to-use interface.
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.