What You Need to Know About Bitcoin
Take a trip to our website and you may notice the fine print listed in the bottom right hand corner. We here at Metrics Chartered Accounting actively accept bitcoin (as well as Ethereum, but thats another article!) as a viable form of payment for our services.
But what is bitcoin? If you’re still not sure, don’t sweat it. It’s only in the last few years that it’s really started to make headlines. Here’s a rundown of everything you need to know about bitcoin in 2017.
What is Bitcoin?
Bitcoin is a form of digital currency – otherwise known as a cryptocurrency – which is considered the first of its kind. Unlike traditional forms of money, such as the U.S. dollar or Euro, bitcoin only exists online and is not governed by any single institution or national body. Furthermore, bitcoin is an independent form of payment that more and more businesses are beginning to accept.
In the same way that our Canadian dollars can be exchanged for other kinds of currency, bitcoin has a determined value and is possible to be exchanged also. But because bitcoin is virtual, it cannot be printed by a bank or other institution. In fact, there can only ever be 21 million bitcoin at any time (although they can be divided into smaller subsets for larger reach), all but ensuring the value isn’t drastically depreciated by exhaustive fabrication, or as you may know it, inflation.
Bitcoin has only been around since 2009, so it’s no surprise that people should have so many questions about how it works. Here are some of the key features that set it apart from traditional forms of currency.
As we’ve mentioned, the defining characteristic of bitcoin is its lack of control by one central authority. The Bitcoin network is monitored by a huge network of computers, meaning that no one can come in and tinker with its value or your ownership. Another benefit of this is that if one part of the network ever goes offline, there are an innumerable amount of other machines making sure it runs smoothly.
It’s (mostly) anonymous
Although bitcoin can be tracked to a particular online address, that address isn’t associated with your name, home address or any other form of identification.
With that said, the bitcoin network keeps track of every single transaction, in what is known as the blockchain. The blockchain is publicly accessible and anyone can keep track of your transactions and how many bitcoin your address possesses. Only thing is, they won’t know it’s you.
In order for higher profile bitcoin users to avoid this kind of public transparency, they often employ certain legal strategies, such as using multiple addresses, or never transferring large sums to one account.
Should I buy Bitcoin?
We aren’t financial advisors, so this is just for fun consideration: Although bitcoin has become much more mainstream in the last couple years, there are still things setting it back as a viable form of currency. For instance, even if it’s gaining momentum now, bitcoin is incredibly volatile and its value fluctuates rapidly. It’s true that some people are calling it “the new gold,” but you may end up losing most of what you invested.
Despite that though, demand has never been higher, and as more and more industries begin to accept it, it very well may turn into a mainstream form of money within the next five to ten years.
We certainly love playing in the space, but it takes a certain type of risk tolerance at this stage in the game.
Where can I buy Bitcoin?
Bitcoin is easily accessible and can be purchased from many online exchanges. For a based-in-Canada approach, check out QuadrigaCX.
Don’t forget about taxes