What is Bitcoin and what value does it hold in Canada?
Fifty years ago, if you told someone they would be able to pay for their milk and bread with a plastic card rather than coins, they would laugh in your face. So, imagine their surprise if they realized today they could purchase goods – both luxury and staple – with money they cannot see or hold in their hands. Money that physically doesn’t exist, but is worth more than gold. They would think it’s preposterous.
And it is. Bitcoin, a form of cryptocurrency, has become the most lucrative currency in the world and holds a value no one ever imagined it would. You can’t touch it; you can’t carry it in a coin purse, and yet just one bitcoin, given to the right merchant, can buy you a fairly decent car. In fact, the bitcoin price in Canadian dollars has recently reached $9,123.47, enough to buy a family car with change left over.
Holding such value, you would be forgiven for thinking this digital currency is governed by a relatively wealthy businessman who ensures he takes a fair chunk of the profit. However, you would be wrong. Bitcoin works without a central repository or even an administrator. It’s known as a peer-to-peer system, where users make transactions between themselves without an intermediary such as a bank. These transactions are then recorded in a public ledger known as a blockchain, and no man is wearing a suit, sitting in a corporate chair telling you how much you can earn on your bitcoin purchase.
Cryptocurrency is growing in popularity and value across the world, and bitcoin in Canada is no different. The 1 bitcoin to CDN exchange rate currently sits at 0.00011 bitcoin, making it more lucrative than ever before to get your slice of the pie by investing in bitcoin. While the prices are volatile, if you play the long game, there’s no reason why you won’t see a dramatic increase in profit. In fact, bitcoin usage doubled in Canada in 2015, showing that the current exchange rate has made it well worth the investment.
Why do Canadians like bitcoin?
Why do mice like cheese? Why do bees like flowers? They profit from it, and the payoff can be, and is currently, phenomenal. There’s a current trend within Canada that sees many spenders opting for cashless payments rather than standard paper notes and coins. That trend is growing throughout the world, but contactless payments in Canada alone increased by 30 billion dollars in 2015, with over 1.2 billion transactions. This is bound to have a flow-on effect to cryptocurrency.
How safe is bitcoin?
While the platform on which you buy and sell bitcoin is reasonably secure, and all bitcoin are registered with custom keys for each owner, there is still risk involved with owning bitcoin and having people know that you do. The trick is not to get complacent, not let too many people know, and to avoid falling victim to scams and promises of more money. Scams have been around for hundreds of years, but scamming to gain access to your bitcoin is a relatively new phenomenon. Therefore, for some people, it was easy to fall into the trap and lose out.
Where there’s money to be made, scammers will be out in their hundreds, as is the case currently in Canada. According to police, more than 40 people have been caught out in a bitcoin scam, collectively losing them as much as $340,000. The scam artists posed as Canada Revenue Agency employees threatened the victims with arrest due to unpaid taxes, and made them send funds to them via a bitcoin ATM.
There are also cases of fake investment schemes being set up in Ontario, with several hundred people at risk of losing out.
While bitcoin isn’t a currency you can touch or hold, you can still lose it, and police are treating incidents such as these seriously due to the amount of money that can be lost with a single bitcoin.
A safe way to handle bitcoin in Canada
There’s no doubting that bitcoin holds significant value throughout the world, but many countries are dubious of what it all means. Will it increase crime? Will people suffer as a result? Will it all crash and burn? With 1 bitcoin to CAD expected to hit $10,000 in the not-too-distant future, Canada is looking to ensure the trading, investing, buying and selling of bitcoin is as safe as possible. Therefore, a Vancouver-based financial institution has set up First Block Capital Inc’s first bitcoin registration.
Rather than ignore the value and popularity of this cryptocurrency, Canada is exploring ways to regulate and embrace it to ensure all investors are as safe as they can be. This means that those looking to invest in Bitcoin can now do so in a secure and protected environment, thus minimizing the risk of scams and significant losses.
What does the future hold for bitcoin in Canada?
As with any investment, there are risks. You can either be “all in” and lose considerably or make thousands, or you can pass it off as too risky and watch as others make thousands, or also lose it all. There’s no doubting that bitcoin investment is risky. It’s a volatile marketplace that could crash and burn in a heartbeat, but it’s also one that can grow exponentially and benefit thousands of everyday Canadians. Whether you’re a traditional investor or a homemaker, you can choose to invest in cryptocurrency of any kind and watch it grow on the market. The key is not to see it as a get rich quick scheme, but rather as a plant that needs time to develop and bloom.