What is Bitcoin?
Bitcoin is a peer-to-peer digital currency. It can be transferred instantly and securely between people all over the world. Bitcoin is like electronic cash, but it's different from traditional currencies because it is decentralized (does not use banks), in limited supply, semi-anonymous, and irreversible.
It can be confusing because "Bitcoin" is the name of both the currency and the protocol of creating and using the currency. Usually people use Bitcoin (with a capital B) to describe the protocol/process and bitcoin (lower case b) to describe the units of currency.
How can I buy bitcoin?
You can buy bitcoins online or in-person with cash at an ATM. Visit one of our ATM locations here.
The first step to buying bitcoin is to set up a wallet. You need a wallet to store your bitcoin. See "What is a bitcoin wallet and how do I get one?" below to set up a wallet.
How do I store bitcoin?
Bitcoin is stored in a wallet, which contains all the alphanumeric addresses you have.
What is a bitcoin wallet and how do I get one?
A bitcoin wallet stores all the alphanumeric bitcoin addresses, the public and private keys, you have. It will also provide a bitcoin seed or mnemonic recovery phrase which is a list of the words needed to recover a bitcoin wallet.
Wallets can live on your mobile phone or computer, on a piece of hardware, or even simply on a piece of paper. Bitcoin4U does not make any specific wallet recommendations nor is directly affiliated with any companies who provide wallets. You should do research to find the option that works for you.
Electronic wallets: this is software that will create and store your wallets for you on your phone, computer or other device. Search 'bitcoin wallet' on your device app store or web browser to download software.
Hardware wallets: you can also purchase small devices that are designed specifically for storing private keys.
Paper wallets: this is the simplest form of a wallet where you would use an online wallet generator and print out the address (private and public keys) onto a piece of paper.
It is important to note that in all instances, if you lose a wallet or lose access to your wallet, you will lose the balance of bitcoin associated with that wallet, irreversibly. Anyone who access to the private key or the bitcoin seed has complete access to the bitcoin balance associated with that wallet.
How do I sell bitcoin?
You can sell bitcoin through Interac eTransfer. For more information, visit here.
What is a bitcoin seed or mnemonic recovery phrase?
A bitcoin seed, also sometimes referred to as a mnemonic recovery phrase, is a list of 12-24 words that store the information needed to recover a bitcoin wallet. A wallet will typically generate the phrase and the user will record it and store it separately.
Anyone who has the bitcoin seed will be able to access the bitcoin balance associated with that wallet. Seeds should be stored securely.
How do bitcoin transactions work?
The Bitcoin network is a shared public ledger called the blockchain. This ledger is a record of every transaction ever processed. Transactions are verified by digital signatures that are private keys corresponding to the unique addresses. This signature ensures that the transaction cannot be altered by anyone else.
When you choose to transfer bitcoin, you will use your private key to create a transaction, which is a long string of numbers and letters. This transaction is broadcast to the Bitcoin network to be confirmed.
The process of confirming the transaction is called mining. To be confirmed, transactions must be included in a block that fits with the cryptographic rules that will be verified by the network. Once a transaction is included in a block, that's the first confirmation. Any subsequent blocks created also further confirm the transaction. Typically three confirmations, or three blocks, are required to transfer bitcoin fully.
The process of confirmation usually takes about 10-20 minutes, although it can be longer depending on the activity of the network. While the actual creation of the bitcoin transaction is instant, the confirmation process takes time.
Can I buy or sell bitcoins without a mobile phone?
No, you cannot buy or sell bitcoins to/from Bitcoin4U without a mobile phone.
How much does bitcoin cost?
Before you purchase online or at an ATM, Bitcoin4U will provide you with a rate that will be secured for that transaction.
Are bitcoins really used to purchase things?
Yes! Increasingly, there are more and more businesses and individuals accepting bitcoin.
Is Bitcoin legal?
Yes, Bitcoin is legal. In Canada, Bitcoin transactions are regulated by the Financial Transactions and Reports Analysis Centre of Canada to ensure that they are not used for illegal purposes.
Should I purchase bitcoin for a third party or government agency?
NO! If you have been told to purchase bitcoin to send to a third-party or to pay a government agency, this is likely fraudulent. See "How can I protect myself from scammers?" below for a list of common scams.
Only send bitcoin to people you know and trust, as all transactions are irreversible.
Do I have to pay tax on bitcoins?
In Canada, income on cryptocurrency transactions is generally considered as business income or as a capital gain. According to Canada Revenue Agency, possessing or holding cryptocurrency in general is not taxable but there could be tax implications if you:
- sell or make a gift of cryptocurrency
- trade or exchange cryptocurrency, including disposing of one cryptocurrency to get another cryptocurrency
- convert cryptocurrency to government-issued currency, such as Canadian dollars
- use cryptocurrency to buy goods or services
Visit the CRA website here.
How can I protect myself from scammers?
Only send bitcoin to people you know and trust, as all transactions are irreversible.
Common scams are:
- An individual or company claiming they have overpaid you and asking for bitcoin repayment
- An individual or company claiming you owe government taxes and asking for bitcoin payment
- An individual or company claiming you are in legal trouble and asking for bitcoin payment
- An individual or company asking for help in moving funds in exchange for a portion of the funds
- An individual or company asking for a bitcoin deposit for a new job offer
- An individual or company asking for a bitcoin deposit for a purchase that seems to be 'too good to be true'
- An individual or company asking for payment of a utility bill (such as hydro). This is often with urgency and threats of immediate service suspension.
- An individual or company asking for a bitcoin deposit for a prize won
Are bitcoin transactions tracked?
All transactions are recorded in the Bitcoin shared public ledger, although the identity of the buyer/seller is not necessarily known.
Are bitcoin transactions reversible?
No. All bitcoin transactions are irreversible.
Why do I need to provide my ID?
In Canada, bitcoin transactions are regulated by the Financial Transactions and Reports Analysis Centre of Canada. To ensure that bitcoin is not utilized in an illegal manner, sellers of bitcoin are required to verify the identification of the buyer. This includes verification of the buyer's name, occupation, date of birth, address and identification details.
You cannot buy or sell bitcoin to Bitcoin4U without government issued identification.
Is it safe for me to provide my ID and personal information to you?
Your privacy is very important to us. For information on the collection and storage of your personal information see our privacy policy here.
I live outside of Canada, can I buy from or sell bitcoin to you?
No, Bitcoin4U can only sell to or buy bitcoin from residents of Canada.
Can I purchase bitcoin with cash?
Yes, you can purchase bitcoin from a Bitcoin ATM with Canadian bills. Find a location here. You will need to set up a bitcoin wallet and have a mobile phone.
Can I purchase bitcoin online?
Yes, you can purchase bitcoin through Interac eTransfer or Flexepin.
What happens if I lose my bitcoin?
If you lose a wallet or lose access to your wallet, you will lose the balance of bitcoin associated with that wallet. This is irreversible. The bitcoin will be dormant forever, as there is no way for anyone to access it.
How long does it take for me to receive my bitcoin after purchasing?
You will receive the bitcoin instantly, although it will still need to be confirmed. While the bitcoin is being confirmed, it will show as pending. The process of confirming bitcoin transactions usually takes about 10-20 minutes, although it can be longer. See "How do bitcoin transactions work?" above.
Can I get bitcoin back if I sent it to the wrong address?
No. All bitcoin transactions are irreversible. Always ensure you have the correct address and are sending bitcoin to a trusted individual.
