- A Quickstart Guide on How to Purchase Cryptocurrency in Canada
To preface, this guide is for someone who has a layman’s understanding of Bitcoin, Blockchains, Ethereum, is interested in cryptocurrency, but wants to know how to signup for an exchange, create their own wallet and start investing into BTC or altcoins. I have included a glossary at the bottom.
The first step in gaining access to cryptocurrency is first to sign up for an exchange, connect your bank account and purchase some coins.
Follow through the registration process on any of these suggested websites, and deposit Canadian dollars from your bank.
Usually registration takes 1–2 business days, and requires some identification.
Once registration is complete, you can use their basic trading page to purchase some Bitcoin or other coins.
Coinsquare is the exchange I personally use. They recently introduced free withdrawal/deposit e-transfers in order to compete with other exchanges. The interface is simple and user friendly, and the account sign up process is relatively fast. The biggest con however is that you cannot trade directly from Canadian dollars to other Altcoins. You first have to trade from CAD to BTC, then to another altcoin like ETH. This exposes you to potentially higher trading fees.(0.2% or 0.4% for CAD to ETH or other altcoins)
Coinsquare Referral Link
Bitbuy is currently the largest Canadian crypto currency exchange by trading volume. It has zero withdrawal and deposit fees by e-transfer, and has very low trade commision fees.(0.14%) It supports basic trading and advanced trade. The interface is very user friendly.
Recently, Coinsquare introduced a new application called Quicktrade, which also has free deposits/transfers, and reports having an extremely fast account verification process (less than a few hours) I have recently used their app to avoid paying transfer fees on larger bank withdrawals.
Quick Trade - Apps on Google Play
Quick Trade gives you control to buy and sell digital currencies easily and quickly. Choose how and when to make your…
Coinberry is a Canadian digital asset trading platform that provides users an easy and safe way to buy and sell Bitcoin, Ethereum, Litecoin, Ripple, Bitcoin Cash and Stellar in Canada. It is FINTRAC certified and has zero withdrawl/deposit fees and 0.5% trading fees.
Signing up for a cryptocurrency exchange requires KYC (Know your customer) verification. This includes uploading some sort of ID and confirming personal details. This is due to Canadian securities regulation attempting to stop fraud, tax evasion and money laundering.
The Metamask interface on your phone
A wallet is used to store your cryptocurrency. You have a public address, which is also called a public key, and a private key, which is connected to your public address. Your public key is fully visible on the blockchain, and is needed to receive transactions. Think of it like your postal code, which you need to give to others in order to receive mail. Your private key is similar to a password. It must be kept safe and hidden at all times. If you ever lose access to a device that has your wallet, you can recover the wallet on any other device with your private key.
Do not think of your wallet as being stored on your device! Your wallet is stored on the blockchain. If your device is stolen or destroyed, you still have access to your tokens as long as you have your private key! If you install a wallet application on another device, you can import your wallet using your private key.
Metamask is currently the most popular crypto wallet for it’s ease of use and usability with many decentralized applications.
Download it, and setup a wallet here:
Most DApps (Decentralized Applications) on the Ethereum Blockchain support Metamask. With Metamask, you can directly interact with DApps like Decentralized Exchanges, Dividend/Interest generating apps(called Yield farming), lending/borrowing apps, etc.
Currently, most DApps are financial applications, but the possibility of DApps is endless! There are video game Dapps, gambling DApps, collectable DApps(also known as NFTs). Any application that has a use case for being decentralized will be valued in the future.
The best thing about Metamask(and other private wallets)is that you are entirely in control of your own tokens.
This is the largest difference between keeping your tokens on an exchange versus your own wallet. Exchanges are vulnerable to hackers as they inherently are a single point of attack. This means that if for some reason, the private key(the password of a wallet) of an Exchanges wallet (Which holds the funds of all of its users) is compromised, all of its customers funds could be stolen.
The only time I would recommend keeping tokens on an exchange is if you are actively trading them. If you plan on holding your tokens for the long term, then keeping them in your own wallet is much preferred.
Being in total control of your funds means you are also completely responsible for it’s security. Practising safe security measures of your wallets and exchange is the best way to keep your funds safe.
- Writing down your private key on a piece of paper, and keeping it safe.
Using strong passwords on all your accounts
Double check the website address is correct. Directly type into your browser address bar or use google and click on the top link. Some links on websites may be fake.
Use 2 Factor Authentication on all your exchange accounts (Google Authenticator is the most supported) https://play.google.com/store/apps/details?id=com.google.android.apps.authenticator2
Purchasing a Hardware Wallet (A USB Device that encrypts your private keys) https://www.ledger.com/
Enabling as many security features as possible on exchanges is generally a good idea.
If you are worried about your wallet getting hacked, don’t worry, it’s absurdly difficult.
The chance of guessing a private key is 1 in 115 quattuorvigintillion, Or winning the powerball lottery 9 times in a row, or picking a grain of sand on a beach, then asking your friend to pick up that same grain of sand among billions of beaches. The point is, it’s extremely unlikely. As long as your private key is not in any way exposed to the internet, it cannot be vulnerable to hackers. This means to not write your private key in any document on your devices, or to take a picture of it.
In the next step, we will be transferring tokens to our own personal wallet or to Binance exchange. Canadian exchanges currently only support trading for a couple tokens like BTC, ETH, EOS, XRP, LTC, etc. The number of tokens that are available is limited. This is why we are going to move our tokens to our personal wallet and connecting it to Uniswap exchange, or to Binance exchange. Both of these websites support trading for hundreds of altcoins.
The easiest way to do this is to just go to the withdrawals page on any exchange you use, choose the token you wish to withdraw, copy and paste (or scan the QR code) your wallets public key, then confirm the deposit.
- Triple check the deposit address is the correct one, as any funds sent to the wrong address will be lost.
If it is your first time sending tokens, I suggest sending a small amount.
Pay attention to fees, as of writing this article, it costs about $5 USD to send a ETH transaction, and takes a couple minutes.
You can take a look at a transaction here (I choose one at random):
On https://etherscan.io/ you can see transactions on the Ethereum blockchain. The above image may look confusing, but for now, all you need to pay attention to is the From and To addresses, the Transaction ID, and the Value.
What a Uniswap swap will look like. Note the minimum you can receive, the price impact and the fees.
Uniswap is a decentralized exchange. Meaning it is not controlled by a company like Bitbuy, Coinsquare or Binance. You can trade directly using your own wallet, meaning you do not have to trust a company with your funds. The other main difference is that Uniswap does not function the same way as a regular exchange. You do not trade directly with users on an order book. Instead you swap , or trade, tokens. Uniswap uses a system called an Automatic Market Maker(AMM) that facilitates prices between two tokens.
I won’t go into detail in this guide, but you can find more information on how Uniswap facilitates trades here.
- Make sure you triple check the token you are trading for is the correct one. Do not search for coins on the website. It is generally safe to pick the default coins listed, or to go onto coingecko.com, find the token, and copy the contract address directly onto Uniswap. Because Uniswap is a decentralized exchange, anyone can create a token and list it on Uniswap.
Be aware that you have to pay Gas Fees (ETH fees) for first swapping, then confirming the swap. Currently, gas fees are very high due to the price of ETH skyrocketing.
Do your own research on tokens.
Step 5(Optional)- Sign up for Binance
Binance is one of the largest crypto currency exchanges in the world. It is highly regarded because of it’s simplicity, yet also has many tools for advanced traders and investors. I suggest Binance because it has the best track record and longevity of any current centralized exchange. It has never been hacked. It has hundreds of altcoins available for trade, quick and easy verification and very low commission fees. The reason we also want to sign up on Binance is to have access to altcoins that are not available on Canadian exchanges.
- Only invest what you can afford to lose. In fact, imagine that the money you are investing into crypto currency is already gone. Do not have an emotional attachment to your tokens.
Centralized exchanges being hacked
Your private keys being stolen by your own negligence (writing it on your phone/computer, taking a photo of it, etc)
Tokens dropping 99% in value (be prepared for some volatility, it is not uncommon to see the entire cryptocurrency market drop by 30%)
Bugs in a token’s programming that causes some major flaw
- Sign up for an exchange, transfer money from your bank account, buy some tokens.
Install a wallet on your phone/PC (like Metamask)
Withdraw your tokens from an exchange to your metamask wallet
Connect to a Decentralized Exchange like Uniswap
(Optional) Withdraw your tokens from an exchange to Binance and start trading for tokens that are unavailable on Canadian exchanges.
(Disclaimer: this article is not financial advice, do your own research and invest only what you can afford to lose)
Etherscan is a website used to explore the Ethereum blockchain. You can use it to see your wallet’s public key, your transactions, and importantly, current fees for transfering Ethereum and using DApps (Eth fees are called Gas)
Blockchain is a website used to explore the BTC blockchain. You can also look at your public key, lookup current BTC fees and look at transactions.
Coingecko is the best website for looking up the entire crypto space by market cap, volume, price etc. Looking up individual coins will bring you information like the projects website, price history, social media and other basic information.
Exchange -Similar to a stock brokerage website, an exchange is where you can trade currencies like USD, CAD for tokens like Bitcoin, Ethereum or Litecoin.
Altcoins- Any coin that is not Bitcoin. They are “alternate coins”.
Trading Volume- The number of units traded in a market during a given time.
Commission fees- Fees that are taken by an exchange for using thier service. This can include withdrawls, deposits or trading.
Decentralized Applications- Applications that run on a blockchain. They differ from traditional applications like web applications (which run on a central server) or computer applications (that run on your operating system). Gmail, Facebook, or Youtube are centralized applications, because their servers are controlled by one central party(usually a company). The Ethereum blockchain currently is the most popular DApp platform, and it’s servers are decentralized on thousands of nodes around the world.
Contract address- This refers to the address location of the actual token contract that manages the logic for the tokens. Pasting this into Uniswaps swap function is the best way to ensure the token you are trading for is the real one.
Gas fees- Ethereum fees that are paid whenever you send a transaction or use a DApp. On the Metamask Transaction fee option, usually choosing medium will be the best bang for your buck, but if you want the transaction to clear fast, you can choose the fast option.
2 Factor Authentication- A security system that requires two distinct forms of identification in order to access something. An application like Google 2FA can be used to add extra security to your accounts.
Centralized exchange -An exchange that is controlled by a single party, typically a company. Coinsquare, Bitbuy, Binance, even the Nasdaq and the NYSE are centralized exchanges. Typically you use an orderbook to make trades, and fees are collected by the company.
Decentralized exchange- An exchange that has no middlemen or custodians to facilitate trading. For example, Uniswap allows users to trade without intermediaries, with a high degree of decentralization and censorship-resistance.To be more precise, it is an automated liquidity protocol. There is no order book or any centralized party required to make trades. (Binance Academy)
Order book -The order book is a list of the currently open buy and sell orders for an asset, organized by price.
- Date of publication:
- Mon, 02/22/2021 - 16:59
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