Cryptocurrencies | What are They and How Do You Exchange Them?

In 2021, the price of just one Bitcoin broke $60,000. Bitcoin is one of many cryptocurrencies, a market that has reached a total value of about 2.5 trillion dollars. 

Many people see Bitcoin as a store-of-value asset, but it’s also an immensely popular decentralized currency. Thousands of users pay with and exchange Bitcoins daily. Moreover, Bitcoin and crypto have become more than just decentralized digital currencies – they are a social phenomenon. One that exists independently of any government, state, or financial institution. 

If you’re new to the world of crypto or are considering buying or selling Bitcoin, here’s some practical information that can help you get started. We will see what Bitcoin is, why it’s become so successful, and the best ways to exchange cryptocurrencies today. 

How Bitcoin Works

Bitcoin is a peer-to-peer type of currency backed by blockchain technology. This means that it operates without any centralized entity that controls it. Nobody controls or owns the network, and there is no CEO. Instead, participants like end-users, custodians, developers and ‘miners’ collectively make decisions about the rules of a protocol – and any changes require several voices to provide consensus. As a result, of all existing cryptocurrencies, Bitcoin is probably the most decentralized. 

Bitcoin transactions are grouped together in blocks that are timestamped and added to a chain. Once posted to the ledger, all events are public and can be verified by anyone else on the network in real-time. The nodes help propagate the transactions across the network by following the rules of the protocol. 

Because everyone must reach a consensus of valid transactions to add to the blockchain, Bitcoin is able to operate with transparency and security. A key component of maintaining and developing the blockchain ledger is mining. Mining is performed by solving extremely complex computational math problems through computing power. These problems are the ones that reveal the block of transactions to the rest of the network. To motivate people to legitimize and monitor Bitcoin transactions, miners get paid to work as auditors. 

Bitcoin doesn’t exist physically. There are also no gatekeepers: Anyone can use the currency. As long as a transaction follows the rules of the protocol, it will be confirmed by the network. Any Bitcoins you hold will live in your Bitcoin wallet – which is, in reality, a place to store the secure private key that lets you access addresses and carry out transactions. Keeping your Bitcoin wallet safe is essential. Some people choose to encrypt theirs with a strong password or choose an offline storage option. 

Who Created Bitcoin?

Actually, no one knows. A person or group called Satoshi Nakamoto released the original Bitcoin whitepaper in 2008 and worked on the original software in 2009. Their true identity, however, remains obscure. This could easily be because of safety concerns, as the creator/s probably possess a majority of the stash of Bitcoin!

Since its inception, Bitcoin grew quickly, driven mainly by its utility to do digital transactions. Early users also advocated for its strong cryptography and privacy-enhancing technologies. Today, however, economic speculation about the future of the currency is one of the most important factors that drive a lot of its growth. A number of regulators have also provided more clarity on the legality of the crypto. Many institutional investors see Bitcoin as a currency for economic freedom as well.

Can you Exchange Bitcoins into Other Currencies?

The short answer is: Yes! You can use Bitcoin as a means of payment for products and services without the need for intermediaries like banks or apps. Bitcoins can also be exchanged for any other currency, although there are some important things to consider first. 

If you know a person who wants to sell Bitcoin, you can buy it directly from them. When you do this, you only need to pay a small ‘network fee’ for the currency to move from your wallet to your friends’. However, it’s not always easy to find a person willing to buy or sell the amount you require – in particular, at a time when most people don’t use Bitcoin as a medium of exchange in their daily lives. While cash is considered the most liquid asset in existence (it can be exchanged for practically anything), Bitcoin is the most liquid cryptocurrency. This is where crypto exchanges come into play, as they can facilitate the process of buying and selling Bitcoin. 

Several platforms act as a “matchmaking” service connecting buyers and sellers. There is, however, a problem: These trades still need to be negotiated on a peer-to-peer basis. When you create an order, you indicate how much Bitcoin you want to buy and the price you’re willing to pay. Whether you find the amount you require will depend on luck and availability. Some of these platforms also have some implications relating to security: Even though Bitcoin is a decentralized cryptocurrency, these exchanges take custody of your Bitcoin – which means you’re not always in control of your funds. 

One of the easiest ways to buy and sell Bitcoin and other crypto is to use a retail cryptocurrency exchange. In fact, there are many locations here in Canada where you can buy and sell, in person, in just minutes. 

Why Should you Use a Retail Cryptocurrency Exchange?

Retail cryptocurrency exchanges like BitTrust offer competitive prices and low fees to ensure you get the most out of your transaction. Of course, every crypto enthusiast has different needs and preferences – but there is one thing they can all agree on: They want to trade digital assets efficiently.

BitTrust supports the trade of Bitcoin, Ethereum, USDT and 500+ other cryptocurrencies instantly. In addition, they cover large transactions of $25,000+ covering Canada, the US, and Europe. You can check their Buy and Sell Rates here. 

If you’re new to Bitcoin and crypto, BitTrust also offers online and in-person Blockchain Consultation Services. The company has offices in Mississauga, ON. Their stores provide secure and safe locations to carry out transactions and are open from 10:00 am to 06:00 pm every day except Sundays. 

Keep in mind that you will have to complete a short registration process to verify your identity in accordance with jurisdiction laws. Happy trading!