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<\/p>Unless you\u2019ve been living under a rock for the past several years, you no doubt have heard of bitcoin and other cryptocurrencies. But if you\u2019re a newcomer to the world of crypto, trying to wrap your head around how cryptocurrency works can be pretty overwhelming.<\/p>
To help you understand how crypto works, how to invest in crypto and whether you should invest in crypto, we\u2019ve put together this simple guide to cryptocurrency for beginners.<\/p>
Keep reading for a jargon-free rundown of all things digital currency.<\/p>
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Cryptocurrency\u2014or crypto for short\u2014is digital currency. It\u2019s completely online, so it doesn\u2019t exist in the form of physical coins and paper notes, and it\u2019s not controlled by a bank, government or any other type of central authority.<\/p>
You can use cryptocurrency as a form of payment, just like you would regular money, or you can trade it online and try to make a profit in the same way you would when trading stocks.<\/p>
Cryptocurrency is available as virtual coins or tokens that can be used for peer-to-peer transactions.<\/p>
It gets its name from the cryptographic techniques used to secure digital currency transactions. Cryptography uses codes to encrypt information so that only the sender and receiver of a message can understand it.<\/p>
Cryptocurrency also relies on distributed ledger technology in the form of blockchain. A blockchain is a ledger that keeps a record of all transactions in a network, but it\u2019s not controlled by any central authority.<\/p>
Instead, a blockchain is distributed across all participants in a network. It can be viewed by anyone and can\u2019t be tampered with.<\/p>
In Canada, you can buy, sell and trade cryptocurrencies on a cryptocurrency exchange<\/a>. If you\u2019ve ever bought or sold stocks through an online trading platform, you\u2019ll find the user interface of a crypto exchange to be quite familiar.<\/p> Some exchanges allow you to buy bitcoin and other cryptos directly with Canadian dollars, Interac e-Transfer, debit card and credit card, among the common payment methods. Other exchanges only support crypto-to-crypto transactions.<\/p> Once you buy cryptocurrency, you\u2019ll need to store it in a dedicated crypto wallet<\/a>. You can store your crypto in a wallet that\u2019s connected to the internet (also known as a hot wallet) for maximum convenience, or you can hold it offline in a hardware wallet (also known as a cold wallet) for maximum security.<\/p> To buy and sell cryptocurrencies, you need to have an account with a crypto exchange platform. The ones listed below are all vetted, legitimate trading platforms where you can easily sign up online to start trading crypto:<\/p>Cryptocurrency exchanges in Canada<\/h3>
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