Considering everything that’s going on in the Great White North at the moment, there is no better time than right now to learn how to buy a Bitcoin in Canada. More and more Canadians are entering the world of cryptocurrency, and that’s great for adoption in the long run. That said, those just getting started deserve more than their fair share of empathy as learning the basics of how to buy Bitcoin in this country can certainly be overwhelming for somebody who is still learning both the language and the layout of the Bitcoin landscape.
Those searching for answers need not look any further! It’s time to learn how to buy Bitcoin in Canada and see how deep the cryptocurrency rabbit hole really goes.
Deciding How to Buy Bitcoin
Making the decision to get into the world of digital currencies is exciting and certainly requires some thought. One of the things Canadians should consider, especially newbies, is how they are actually going to go about getting their hands on some Bitcoin. In order to decide this, it’s helpful to ponder the answer to a few key questions and considerations: Which is more important, cost or convenience? Which is more important, privacy or convenience? How much Bitcoin is being purchased? Are you interested in other cryptocurrencies not named Bitcoin? Are you already familiar with trading cryptocurrencies or stocks? Answering the above questions helps point those new to Bitcoin to an appropriate outlet for purchasing digital gold or other cryptocurrencies with the most suitable option. Now let’s go over the most popular ways to buy Bitcoin in Canada.
Use a Crypto Exchange in Canada
Buying online is by far the most popular and fastest way to get in the game. Netcoins is a cryptocurrency exchange in Vancouver that makes it easy to buy online instantly from anywhere in the country using Interac e-transfers, wire transfers or bill payments. E-transfers allow for instant purchases and the minimum purchase required is just $50. Wire transfers take some time to organize through a bank and users will need to pay wire transfer fees with their institution in order to get the job done. Depositing Canadian dollars into a Netcoins account by registering the exchange as a bill payment through online banking is another free way to get the ball rolling!
Related: Bitcoin and how to buy in Canada
Netcoins charges trading fees just like any other exchange platform would, but it doesn’t cost any money to deposit (apart from fees that might get paid to a bank for using a wire transfer or the transaction fees charged by the Bitcoin blockchain itself). The reason it’s important to answer the above questions is because users that value buying large amounts of Bitcoin might find using e-transfers limiting (banks usually have a maximum limit on how much their customers can send in a day using this method). Users also have to complete Know Your Client verification in order to become customers, which means those that value privacy may not want to use a crypto exchange. Those looking to purchase cryptocurrencies (altcoins) or looking to use a credit card to make an instant purchase will also not be able to use many exchanges. This is where other methods come in.
Buying At A Bitcoin ATM Machine
Bitcoin ATM machines are great for Canadians looking for the familiar experience of using an ATM machine to complete a transaction. Bitcoin ATM machines don’t rely on the user entering a pin number in order to acquire BTC. Instead, they can use a QR code on a Bitcoin wallet app to send BTC from the machine into the wallet. This method works great for somebody who wants to purchase instantly and get rid of some cash on the spot. In the early days it may have been possible to use a Bitcoin ATM machine without identifying yourself, but most Bitcoin ATMs will ask for verification in this day and age and often charge higher fees for the convenience of making a purchase as well. To find a local Bitcoin ATM Machine, visit CoinMap.org.
Buying Bitcoin in Person
While using an ATM machine is familiar enough for the average Canadian to feel comfortable buying Bitcoin that way, there are some people out there that still subscribe to the idea that there really is no true replacement for human interaction. Buying in person is also becoming easier as crypto adoption spreads. That’s why some Bitcoin businesses offer actual brick-and-mortar storefronts where a customer service representative will actually stand at a desk, shake hands (or touch elbows in a COVID-friendly way), and walk customers through the purchasing process from start to finish. Again, personalized service likely comes at a greater cost but the benefit is an added sense of security and the fact that this method maintains a high level of convenience apart from having to show up in person. Buying Bitcoin Privately
For those that really value privacy over everything else have a few options. They can meet up with friends they trust to buy Bitcoin in person. LocalBitcoins.com offers a marketplace where users can set their own buy and sell rates for Bitcoin and arrange to meet in person. When the website first launched, it was possible to gain access to the marketplace without Know Your Client verification, but that is changing.
Those who don’t feel comfortable with that or don’t have a trusted friend or family member in the space might rely on a different type of cryptocurrency exchange in order to maintain privacy. That would be a decentralized exchange. A decentralized exchange uses a technology called smart contracts to allow users to buy and sell cryptocurrency. The advantage to this is that the individuals or business running the exchange isn’t using centralized servers, so they don’t ask customers to verify themselves. The downside is these exchanges are facing increased scrutiny from regulators around the world, including regulators right here in Canada. Using a decentralized exchange may also be difficult for a beginner because it requires intermediate knowledge of how to transfer digital currency using smart contracts as well as understanding how to execute trades through an interface similar to most stock trading platforms. The average beginner may not feel comfortable overcoming either one of these hurdles.
How to Buy Bitcoin in Canada: A Step-by-Step Summary
There are clearly many weapons of choice when it comes to deciding how to buy Bitcoin in Canada. Regardless of the medium of exchange or method being used however, the basic steps are generally the same across all mediums.
Step 1: Register as a Customer
Some online crypto exchanges in Canada will allow users to register a username and password and take the basic steps towards depositing money and/or crypto into an account before KYC is complete. This means users can verify their email address, log into their account and set up their preferred deposit and withdrawal methods in advance. That said, it is always necessary to complete verification when withdrawing money or crypto from a Bitcoin merchant in Canada, assuming that the merchant is a properly registered business and also not running a decentralized exchange.
Step 2: Deposit Canadian Dollars, American Dollars, or Cryptocurrency
Buying Bitcoin in Canada usually means depositing Canadian dollars and trading them for Bitcoin and other digital currencies. Remember, online exchanges usually accept e-transfers, wire transfers and bill payments as deposit methods. Trading dollars for crypto at an ATM means feeding money into a machine, and doing anything in person can offer the ability to use cash and do things the old-school way. Some exchanges in Canada also allow the ability to use a credit card online or a Visa or MasterCard debit card as well. Those methods might involve charging users a fee, but most exchanges will embed their fees into the exchange rate they offer, which is why it’s important to shop for the right price if that’s something you value.
Step 3: Buying Bitcoin
Most Canadians just starting out in buying their first Bitcoin will gawk at the price and assume they can’t afford to get in the game when they see that buying Bitcoin in Canadian dollars currently costs around $13,000. The good news, Bitcoin actually trades to no less than 12 decimal places (not two like traditional currencies). This means owning Bitcoin doesn’t actually require a five figure investment. Consider that if a full Bitcoin costs $13,000, owning 0.01 BTC requires an investment of just $130, and investors who want to start really small can get access to literal pennies worth of Bitcoin if they wish. Keep in mind however that crypto exchanges, ATM machines, and other methods of purchasing Bitcoin usually have minimum transaction requirements. Even then, most platforms will let a new user get started for a manageable amount of money, say $50 for instance.
Step 4: Transferring Bitcoin to a Wallet
A Bitcoin wallet is represented by a random string of alphanumeric characters that identify a user’s own personal holdings on Bitcoin’s public ledger, a.k.a. the blockchain. In order to take Bitcoin from another user, ATM machine or crypto exchange, users generate a recipient address that allows the merchant to send a given amount of Bitcoin requested to the appropriate wallet. Most exchanges will allow users to hold cryptocurrency in online accounts and there are many apps out there that enable access through a smartphone. The most prudent and secure way to store in a wallet however is to use a hardware wallet stored offline. A hardware wallet is basically a password secured USB key that allows users to generate send and receive addresses for Bitcoin and a variety of other cryptocurrencies that register their holdings on the appropriate blockchain. All while keeping coins securely stored off of the Internet. While a Bitcoin cannot be hacked, counterfeited or destroyed, websites, apps and servers certainly can be. Hacks are very common in the Bitcoin world, and even the most secure exchange is still susceptible to hacks and breaches as long as it’s connected to an Internet signal.
Now you understand the basics of how to buy Bitcoin in Canada. Get started today by opening a free account at Netcoins.
Written by Ayelen Osorio of Netcoins