As Bitcoin Soars in Value Again, here’s what to think about before you buy
Bitcoin has been the talk of the town, with its value going through the roof. With a rapid increase in price and popularity, it isn’t just Canada that this bitcoin bug has bitten, and cryptocurrency fever is everywhere! Many people have now started to wonder if they should buy some bitcoin now. Investing in Bitcoin sounds great! Since Bitcoin has been skyrocketing in value, people are interested in it. However, there are a few things to consider before you invest in Bitcoin. Bitcoin is known worldwide and has gained much popularity, especially in Canada.
However, it also comes with a price, as buying bitcoins at ridiculous rates can prove risky as one might lose all their money. The prices have been skyrocketing lately but crashing just as quickly, which is a risk many are not ready for. Bitcoins have been the talk of the town lately, and everyone wants some, but it has to be kept in mind that bitcoin isn’t something you can just buy overnight; certain factors need to be considered before buying them.
The price of Bitcoin changes very quickly and dramatically. In addition, since most costs of Bitcoin are paid with the same currency (USD, Euro), the value of Bitcoin changes all the time concerning your local currency.
Since Bitcoin is a digital currency, you need a way to store it securely. You can use a software or hardware cryptocurrency wallet for this purpose. There are different wallets, and choosing the one that suits you best might be complicated but beneficial.
The price of Bitcoin changes very quickly, so if you want to buy it now, it will not be available at this same price tomorrow (unless it crashes). Therefore, before buying Bitcoin, you must create an account on exchanges that sell them (e.g., CoinBase) and fund this account with fiat money. Then, you’ll have to choose how much you want to buy. Finally, you will have to place an order and wait until someone sells it at the price you requested.
Since Bitcoin is taxable in Canada, you must know how much money you made on your transactions with Bitcoin (in Canadian dollars). If your earnings are more than CAD$200000 per year, the government will ask you to pay income tax on these earnings.
Privacy/Crypto currency regulations:
Since Blockchain technology is relatively new, governments are still trying to regulate cryptocurrencies worldwide. In some cases, governments have completely banned cryptocurrency exchange, Canada and the U.S have criminalized ownership of cryptocurrencies. For instance, Russia has outlawed all types of cryptocurrencies except for those registered as securities by the Central Bank of Russia.
You MUST protect your computer because it is the only way to access your Bitcoin wallet (if you choose a software wallet). Hackers are constantly looking for ways to steal Bitcoins, so make sure to use strong passwords, encrypt your data, and backup your data frequently. Furthermore, viruses can also be of concern if you want to protect your system and Bitcoin wallet.
If you don’t know how cryptography works or what asymmetric encryption is, do not even try using cryptocurrencies until you learn about it. The theft of cryptocurrency wallets has increased recently because most people do not understand how they work.
Fortunately, some countries, including Canadian crypto exchanges and forced to provide information about their customers when the government needs it. However, most of these websites are unregulated, which means that they can disappear with your money at any time. If this ever happens, you will not recover anything back because there is no evidence of transactions.
Regulations on Bitcoin ATM machines:
Since Canada has recently regulated these kinds of services, some companies are still trying to find a way to continue operating. However, if they cannot do it the usual way, they might try using new technologies which will be difficult for the government to regulate (e.g., drones that sell bitcoins at airports).
Investing in cryptocurrencies is not easy since you need to know about all of its aspects before doing so. If you are interested in this topic and want more information, you can check out online forums or ask me questions by leaving a comment below!