In this digitally advancing world, no one carries a wallet full of cash for shopping. Typically, we use credit cards or sometimes e-wallets to make payments for the items we purchase. Cryptocurrency is primarily a digital representation of money. Unlike our cash, which we store in banks, we use digital wallets dedicated to storing cryptocurrency. You can say it is an evolution of currency; where we started trading goods and services as the barter system, cryptocurrency is the future of money. There are countries like Germany, where people use bitcoins, which is a form of cryptocurrency, as their regular mode of transaction, apart for standard currency. So, today, in this article, we will discuss five valuable points about cryptocurrency that every Canadian should know.
Cryptocurrency is not a new concept; it has been in the horizon for past ten years. However, the recent demand for cryptocurrency has been sky-rocketed. Bitcoin, which is one of the most popular forms of cryptocurrency, is being used in many online stores and even used for regular transactions in some countries. Now, the question remains, why do we use this new form of money? So, here are some valid reasons that justify the use of cryptocurrency.
- Encrypted: The fact that cryptocurrencies are encrypted makes them secure from hackers. The technology is in some ways, encrypted and verified by a type of cryptography. Thus, it is more reliable to use online rather than conventional currency.
- Decentralized: While we save money in banks, there are some issues. Firstly, the banking procedure is typically slow as there are intermediaries to process the transaction. Secondly, banks reserve a large portion of your hard-earned money and utilize for their benefits. Now, cryptocurrencies use blockchain technology, which allows them to use the total percentage of money.
- Easy to use: There is no doubt that using cryptocurrency is very easy. You can access your bitcoin wallet via your computer or your mobile phone to pay for anything that supports cryptocurrency as the mode of payment.
5 things you should know about cryptocurrency in Canada
What is blockchain?
There are several interpretations of blockchain technology. However, in simple terms, you can say it is a record of a series of blocks. Now, those blocks have the same copy of information all around the world. So, whenever there is any transaction, those blocks get updated automatically through a network run by a program called cryptography. That is why we call it blockchain as it updates automatically by a chain of a sophisticated program.
What is bitcoin mining?
Every cryptocurrency transaction has to be processed in the digital currency system; this phenomenon is called cryptocurrency mining. As bitcoin is the most popular form of cryptocurrency, it is popularly called Bitcoin Mining. The mining of bitcoins completes the process of blockchain by recording the blocks and update accordingly for every transaction, which is happening all around the world. The miner typically uses sophisticated software to solve various algorithms which are related to the transactions. The miner, in return, gets a certain percentage of bitcoins per block. What the miners do is they prevent the bitcoins from sending twice during a transaction, which is crucial for the perfect functioning of this whole blockchain system.
How can we buy a Cryptocurrency?
To buy cryptocurrency, more precisely bitcoins, you must have a digital wallet first, where you can store them. Please note the transaction key is very critical for the safety of the wallet; so better you don’t share them with anyone. Remember you can send or receive bitcoins by sharing the keys of your bitcoin wallet. After you successfully set up your wallet, you can buy anything just like you do use your credit card.
You can also buy bitcoins by exchanging the Canadian dollar that you own. There are several online institutions who buy or sell bitcoins, rather every form of cryptocurrency. In fact, it is considered one of the trending business in the world right now, as everyone believes cryptocurrency is the future.
Where can we use cryptocurrencies?
Canada is very open-minded to the idea of using cryptocurrencies, more precisely bitcoins, more frequently. However, several countries believe that cryptocurrency is doing more harm than good, so, the use is prohibited. But, in Canada, you can use it almost everywhere. Though, we must admit people are still sceptic about using bitcoins for buying coffee or going for shopping in malls. But experts believe that this notion will change over the years and we can use bitcoins as a more dominant mode of transaction. If you are a Canadian citizen, you can pay your taxes via bitcoins.
So, these are some essential points you should know before you think of spending on cryptocurrencies. Meanwhile, the bitcoin market is extremely volatile. This is because there are no government bodies attached to regulate market fluctuations. So, you should understand the risk factor before thinking of investing on bitcoins.