Bitcoin: What is it, how it works, and how it’s doing in Canada

What is bitcoin?

Bitcoin is a digital currency that was created in 2009 by an unknown person or persons who go by the alias Satoshi Nakamoto. It is a type of cryptocurrency which functions as a medium of exchange using cryptography.

The cryptography aspect of bitcoin is part of its charm in that it cannot be traced and does not need a third party to carry out the transactions—meaning no banks.

What are the benefits?

Bitcoin is distinct from physical currencies, such as the Canadian dollar, in that it allows for instantaneous transactions. And since it is not attached to one single country as its currency, international payments are made both easy and cheap because there aren’t really any regulations yet.

Small businesses are interested because there are not credit card fees and individual buyers see bitcoin as an investment hoping to see the currency go up in value, according to CNN.

How do I get bitcoins?

To acquire bitcoins, there are several ways to go about it. Marketplaces called “bitcoin exchange” allow people to buy or sell their bitcoins using different currencies. Examples include Coinbase, Poloniex, and Kraken.

The most complex acquisition of bitcoins happens through mining. “Mining” or creating bitcoin involves mining hardware to solve complex math problems requiring large quantities of computing power. For more information on bitcoin mining, visit bitcoinmining.com.

Where do I keep my bitcoin?

After you’ve acquired your bitcoin, learning how to securely store your bitcoin is extremely important. Using either a third party or a personal computer, bitcoins can be stored in a “digital wallet.” It acts as a bank so you can send and receive bitcoin, pay for goods and services or save. Unfortunately, there have been cases of bitcoin being stolen by hackers from third-party digital wallets—something to consider when choosing where to store your bitcoin.

How is bitcoin doing in Canada?

As of June, there has been a 9.2 percent increase of cryptocurrency ATMs, according to Bitcoin.com. Also known as BTMs (Bitcoin Tellers), Bitcoin ATMs are a way to buy and sell bitcoin in person in exchange for $CAD. As of August 9, 2017, 1 bitcoin equals $4,169.56.

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