Bitcoin is a digital currency commonly referred to as a cryptocurrency. It was designed to exist in electronic form, with no physical version for Bitcoin holders to possess. It effectively functions as a store of value and can also be used for the purchase of goods and services.
Bitcoin was created by Satoshi Nakamoto and was released in 2009. Nakamoto’s vision was to create a digital currency that falls out of the reach of governments and central banks.
Bitcoin is banked with blockchain technology which is considered to be a first of its kind. Bitcoin transactions all over the world are recorded and stored on the blockchain. The blockchain is a public ledger that is found on all of the computers within the Bitcoin network. All of the ledgers are synchronized with no master ledger.
The verification and update process for Bitcoin transactions is referred to as Bitcoin mining. The process is independent, with miners selected at random to verify transactions over a given period. Once the verification is complete, the transaction information is incorporated into a block, which then links to the blockchain. Miners receive Bitcoins as a reward for the verification process.
Attributes of Bitcoin include the decentralized ethos of Bitcoin; and the anonymity given to those buying, selling, or holding Bitcoins.
Since the evolution of Bitcoin, other cryptocurrencies have hit the market. Bitcoin is gaining popularity and an increased number of people have started investing in this digital currency. The future of Bitcoin and other digital currencies is bright, and they are probably here to stay.
On February 8, 2021, Elon Musk, the Chief Executive Officer (CEO) of Tesla, revealed that Tesla invested US$1.5 billion in Bitcoin. This triggered a massive buying spree in the cryptocurrency and Tesla plans to accept Bitcoin as a form of payment for its products soon.
Bitcoin provides an opportunity for businesses and individuals across the world to transact with a universal currency that allows fast transfer and negligible fees. Since 2014, Microsoft accepts Bitcoin as payment for some of its products. Newegg, BMW, ExpressVPN, AT&T, Shopify, Bitcoin. travel and some other organizations also accept bitcoin as means of payment and transaction.
Bitcoin in Canada
The history of Bitcoin in Canada dates back to 2018 when a study by the Currency Department of the Bank of Canada revealed that 58% of Canadians hold Bitcoin for investment purposes. According to the same study, 85% of Canadians are aware of Bitcoin.
Weekly Local Bitcoins volumes were fairly low since mid-2018 and into early 2019, with weekly volumes staying around the CA$500 – CA$600 thousand level. Declining interest was observed among Canadians from January of 2018, perhaps due to the bull market Bitcoin has been experiencing during 2018. However, interest begins to ramp up again in mid-2019 as Bitcoin’s price rises.
Canada is a top digital currency driven economy in the history of Bitcoins. Numerous places in Canada allow people to acquire Bitcoins. Several institutions have taken up Bitcoin as their payment mode for goods and services on online platforms. Canada has over 140 Bitcoin ATMs and 6,000 Flexipin retailers. The ATMs offer people an opportunity to exchange Bitcoin for Canadian Dollars.
In 2013, a Vancouver, Waves a coffee house opened a Bitcoin ATM which was the world’s first. The government of Canada officially met with its representatives the following year as well the Canadian Committee on Banking, Trade, and Commerce.
Toronto and Vancouver are believed to be the home of Bitcoins in Canada. The two have recorded a high rate of digital currency operations in Canada. In 2014, it was reported that workers based in Toronto preferred their salaries to be paid in Bitcoins rather than the local currency.
The bank of Canada has attempted to adopt blockchain technology within its banking system, but this was put on hold in March 2017. This was because the bank needed to come up with solutions that could make the process more efficient. One (1) Bitcoin is worth CA$61,970.80 as of February 15, 2021.
Canada’s major online retailer ClearlyContacts.ca and some other organizations have started accepting Bitcoin as payment and transaction means.
How to Buy Bitcoin in Canada
Buying Bitcoin in Canada could be done in various ways: Via Bitcoin exchanges, through CFD’s or ATM’s. While buying Bitcoin via exchange and ATM’s provides you with the legal possession of the cryptocurrency in a digital wallet, purchasing Bitcoin via CFD’s brokers allows you to trade bitcoin’s price fluctuations without holding the coin.
Bitcoin exchanges require the client to open a digital wallet, usually with blockchain, register and open an account with the exchange organization. Find a few of the exchange organizations below.
1. CoinSmart
CoinSmart is a Canadian exchange that allows users to buy and sell Bitcoin and all major cryptocurrencies in Canada. Customers can buy and sell bitcoin and ether using Interac e-Transfers, bank transfers, SWIFT, and credit/debit cards.
Advantages:
- Many payment methods accepted
- Many coins offered
- Fast verification
Disadvantages:
- Somewhat new company
2. Bitbuy
Bitbuy is a Bitcoin exchange based in Canada. Anyone can buy bitcoins, Litecoin, ethereum, and other coins with Interac e-Transfer or bank wire for as low as 0.1% fees. The exchange has sales support available through its live chat, or via phone & email.
Advantages:
- Fast and trusted way to buy bitcoins
- Very high buy and sell limits
- Can handle large buys through OTC desk
- Easy to use mobile app
Disadvantage:
- No longer supports Flexepin
3. Netcoins
Netcoins is a Canadian exchange based in Vancouver. People can buy and sell Bitcoin, Ethereum, Litecoin, and other major crypto coins with Interac e-Transfer, online bill payment, or wire.
They charge 0% on funding and FIAT withdrawal fees and .5% on trading. Customers receive support during business hours through live chat, email, or phone calls. Getting started and verified takes a couple of minutes.
Advantages:
- Deep liquidity with no slippage
- Instant withdrawals
- Fully audited
- Fast verification
- Great customer support
- Regulated and compliant MSB under FINTRAC
Disadvantage:
- Not yet available on the mobile app
4. Satstreet
Satstreet is a Canadian OTC (over the counter) exchange that serves individuals and businesses looking to buy larger amounts from $25k to over CA$10M. Customers will pay some of the lowest fees in Canada when they buy bulk Bitcoin.
Advantages:
- Some of the lowest fees in Canada
- Private banking experience
- Great customer service
- Regulated and compliant MSB under FINTRAC
Disadvantage:
- Must buy at least CA$25k of Bitcoin
5. Coinberry
Coinberry is also a Canadian exchange that allows users to buy and sell Bitcoin, Ethereum, Litecoin, and other coins in Canada. Customers can buy and sell bitcoin and ether using Interac e-Transfers, bank transfers, SWIFT, and credit/debit cards.
Advantages:
- Many payment methods accepted
- Many coins offered
- Fast verification
Disadvantage:
- Somewhat new company
6. Coinsquare
Coinsquare is Canada’s largest crypto and Bitcoin exchange. It allows users to buy and sell Bitcoin, Ethereum, Litecoin, and other coins in Canada. Customers can buy and sell bitcoin and ether using Interac e-Transfers, bank transfers, and SWIFT.
Advantages:
- Many payment methods accepted
- Many coins offered
- Fast verification
Disadvantages:
- Orderbook may be confusing for new buyers
7. MyBTC.ca
MyBTC.ca allows Canadians to buy between $50-$100,000 worth of bitcoin. Identity for verification can be submitted online or done in-person at any Canada Post location nationwide. Sales support is available through live chat, SMS, phone, or email.
MyBTC.ca payment options include Interac e-Transfer, Bank Wire, Cash or Debit, and Flexepin Voucher.
Advantages:
- Easy way to buy bitcoins in Canada
- Numerous payment methods accepted
Disadvantages:
- High fees
- Requires Customer Identification
8. Coinbase
Residents of Canada can use Coinbase to purchase bitcoins with a debit card. The fees are 3.99% per purchase, and your bitcoins are delivered instantly.
Advantages:
- High liquidity and buying limits
- An easy way for newcomers to get bitcoins
- “Instant Buy” option available with a debit card
Disadvantages:
- Purchases made with bank transfer can take up to 5 days to complete
- Coinbase may track how and where you spend your bitcoins
The Government’s Regulation of Bitcoin in Canada – Is Bitcoin Legal in Canada?
No federal or provincial legislation precisely addresses cryptocurrencies and blockchains in Canada. Canadian Revenue Agency (CRA) declared that cryptocurrencies are taxable as commodities rather than currencies, tax rules do apply to digital currency transactions, and cryptocurrencies such as Bitcoin are subject to the Income Tax Act.
Hence, Bitcoin is assumed to be legal in Canada. Canadian residents are therefore free to buy, sell, and trade Bitcoin, which is regulated under anti-money laundering and counter-terrorist financing laws.
The implication is that any transactions that involve cryptocurrencies will be viewed as if they are barter transactions. On CRA’s website, the agency maintains that any good bought using digital currency must, for tax purposes, be included in the seller’s income tax. CRA has also continued to affirm that barter transactions can allow for the procurement of capital property for Income Tax Act Part C.
Any profits gained from the sales of cryptocurrencies are characterized as capital gains. This is because only a part of that profit is taxable and at the applicable tax rate. When it comes to salary payments using digital currencies, the amount payable will be included in the employee’s income following subsection 5(1) of the income Tax-Act.
Conclusion
Canadians interest in Bitcoin is reflected in the ease of Bitcoin purchase from Bitcoin exchanges and the ability to purchase goods and services across the goods and services sector with Bitcoin.
Fees are relatively competitive among the Bitcoin exchanges. Canada could be considered as one of the more advanced markets in moving away from the use of Fiat Currency for day to day living.
The challenge for those looking to use Bitcoin in the more remote areas of the country is that most of the ATMs and retailers accepting Bitcoin are located in the most populated areas.
So, while the major cities may be able to limit the use of the Canadian Dollar, other areas are unlikely to experience the ease of transacting with Bitcoin.
