Beginner’s Guide To Cryptocurrency In Canada
The value of Bitcoin has become a trending topic online and in the business community. Everyone wants to know where blockchain technology is headed and what the future of Bitcoin and major alt-coins looks like. Bitcoin’s daily ups and downs are constantly in the headlines. Wherever the price of Bitcoin and other cryptocurrencies is headed, there are two things you can be sure of: cryptocurrency isn’t going anywhere fast and it may just be the beginning for blockchain technology.
History of Bitcoin
Back in 2009, Bitcoin launched as the world’s first virtual currency. It was the brainchild of Satoshi Nakamato, a pseudonym for a programmer or group of programmers who wanted to a create a decentralized currency that was beyond any single government’s authority. Despite the big golden coin printed with Bitcoin’s instantly recognizable logo, they don’t exist. They’re digital keys that are unlocked by “Bitcoin miners” using blockchain technology to verify transactions.
By the time the world’s first Bitcoin transaction was made in 2010, one Bitcoin was worth $0.003 USD. On May 22, 2010, Laszlo Hanyecz traded 10,000 Bitcoins for 2 large pizzas. Back then, there weren’t any pizza shops accepting cryptocurrencies – Hanyecz traded them with someone on a Bitcoin forum who paid Papa John’s in cash. On December 15, 2017, Bitcoin traded for a record high of $25,303.21 CAD. Today, you could buy a large pizza with 100,000 Satoshi, fractions of Bitcoins used for smaller purchases.
History of Ethereum
Bitcoin’s astronomical rise wasn’t isolated, either. Suddenly, investors were looking for the next big cryptocurrency and a number of alt-coins also delivered huge returns for early investors. Ethereum is one of the most notable alt-coins and its value has continued to soar, hitting $1,483.59 CAD on January 8, 2018, more than doubling in value in the last month. It’s also looked significantly less volatile than Bitcoin. Ethereum was also the first cryptocurrency to surpass one million transactions in 24 hours, a feat it accomplished on December 18, 2017. Ethereum is one of the most private ways to trade in cryptocurrencies. It replaces third-party data storage servers with blockchain technology, protecting the record of your cryptocurrency transactions.
History of LiteCoin
LiteCoin was launched in 2011 and it’s one of the older cryptocurrencies out there. LiteCoin has gained a major following thanks to its faster transaction speeds. Whereas Bitcoin transactions ideally only take about 10 minutes (though congestion has changed these times), LiteCoin transactions were designed to take only 2.5 minutes. Even with congestion, LiteCoin is the faster currency. Purchases are faster and easier with LiteCoin and that’s helped make it the fourth largest cryptocurrency.
History of Bitcoin Cash
Bitcoin Cash emerged from a dispute within the Bitcoin community that also had to do with transaction speed. As more users actually began making transactions with Bitcoin, transaction speeds suffered. There was a bottleneck caused by the small size of blocks used in blockchain technology. Bitcoin Cash changed the block size from 1 MB to 8 MB, rapidly speeding up transaction times and reducing transaction fees, but causing a rift in the original cryptocurrency.
History of Ripple
Ripple was later to the game than other alt-coins and only recently emerged from obscurity with an impressive bull run. Ripple was designed in 2012 to make financial transactions easier. It was adopted by banks as a more efficient and less expensive way to send money globally, and major financial institutions like Bank of America and Santander chose Ripple because it was more secure than other digital currencies and offered better prices. The big difference between Ripple and other cryptocurrencies is that it isn’t mined. There are 100 billion Ripple coins in existence, only 38 billion of which are in circulation. With transactions that only take seconds, Ripple offers some of the fastest speeds among digital currencies.
What Is Blockchain Technology?
Blockchain technology is behind the rise of cryptocurrencies like Bitcoin, Ripple, Ethereum, and LiteCoin. The blockchain is a decentralized database where records of transactions are guaranteed to be secure and updated throughout every node in a peer-to-peer network, rather than on a master copy stored on a centralized server. In a digital transaction with your bank, you need to prove your identity and your permissions, also known as authentication and authorization. This is information that’s increasingly exposed to hackers. By contrast, blockchain technology uses private key cryptography to prove ownership, i.e., the private key used in a Bitcoin Wallet.
Blockchain technology has reinvented authentication and authorization as a decentralized protocol that reduces the risk posed by hackers to a centralized server. Along the way, it’s redefined digital trust. Cryptocurrencies are only one application of blockchain technology. Many more will come to prominence in the future.
How to Invest in Cryptocurrency in Canada
With Bitcoin and Ethereum dominating business section headlines, everyone wants to know how they can start making money from cryptocurrencies. The easiest way to start trading cryptocurrency as an investor in Canada is on CoinSquare. CoinSquare has all the information you need about how digital currencies are taxed in Canada and the regulations you need to know. CoinBase may be the best known digital currency trading site, but CoinSquare lets you sell back Bitcoin and alt-coins in Canadian dollars. CoinSquare currently trades Bitcoin, Ethereum, LiteCoin, Bitcoin Cash, Dash, and others. It’s also designed for large investors with discounts and wealth services available for investments over $25,000.
How Bitcoin and Ethereum Have Matured
One of the biggest struggles facing even established cryptocurrencies like Bitcoin and Ethereum has been fulfilling their promise as decentralized currencies. For years, it was difficult to buy directly using any cryptocurrency. That’s finally begun to change. Bitcoin, Ethereum, and other established alt-coins are finally seeing widespread acceptance as currency, especially since Japan announced that it would accept Bitcoin as legal currency.
You can now buy everything from furniture to gold with Bitcoin and Ethereum. Online retailer Overstock has been accepting Bitcoin since 2014, while gold bullion traders like Silver Gold Bull have recently made it possible for their clients to buy gold with Bitcoin and other cryptocurrencies as well. Sites like Gyft now let you purchase gift cards with cryptocurrencies and you can buy airline tickets through Expedia and CheapAir. Dell’s online store has been accepting Bitcoin since 2014 and online computer retailer Newegg lets you buy almost any kind of electronic device.
Digital Currency & ICOs
ICO stands for Initial Coin Offering and as cryptocurrencies attract big investment money, they’ve become a way for startup blockchain projects to raise money instantly. Ethereum was the first major successful ICO and since then they’ve attracted real attention from investors. Everyone wants to invest in the next Bitcoin, so they’re trading Bitcoin and Ethereum for new cryptocurrencies. The problem is how poorly regulated ICOs are. It’s the wild west of investment opportunities and it’s difficult to sift projects with a lot of promise from shadier businesses looking to make a quick buck off of eager investors.
Do your due diligence before getting into any ICO, but two that we’re following are Experty and Gems. Experty is a cryptocurrency-based knowledge sharing app that connects people with blockchain experts over a calling app similar to Skype. It allows you to pay for consultations with experts using a cryptocurrency and it promises to help solve the talent crisis facing blockchain technology with fast freelance knowledge sharing. Experty is currently offering an ICO ending on January 15.
Another ICO to watch is Gems, a cryptocurrency that has the potential to revolutionize micro tasks. Small payments come with big fees. Anyone who uses PayPal for their business knows how quickly fees add up when you send hundreds every month. Gems plans to use the Telegram app to send Gems crypto-tokens. It remains to be seen what kind of changes Gems can offer when it comes to fees and security, but the Gems Token Launch is one to watch out for.
The Future of Bitcoin
No one can predict where the price of Bitcoin is going, but it’s safe to say that cryptocurrencies will continue to grab headlines and the attention of investors. Future advances in blockchain technology could be even more game changing in the coming years and no one in business can afford to ignore blockchain innovations. Blockchain technology will soon be part of our everyday lives. It has the potential to make online transactions more secure, protect against identity theft, and make mobile payments faster and safer.
Non-traditional banking systems are going to pose a big challenge to major financial institution even as big banks and stock exchanges start introducing the technology for currency trading and equity management. Everything from car rentals to smart refrigerators that order your groceries for you could see security improvements thanks to blockchain technology. As more work gets contracted out to freelancers on online service marketplaces, cryptocurrencies may even become the standard for paying contractors.
Meanwhile, marketplace fraud and ever-more frequent hacking scandals are going to put pressure on online retailers to look into the security of blockchain protocols. Blockchain technology is the next step in the world’s digital evolution. Whether or not you’re investing in cryptocurrencies, keep an eye on blockchain technology.