Bitcoin —which launched as the world’s first cryptocurrency back in 2008— has continued to dominate the industry as the largest cryptocurrency to the present day. In the last few years, the popularity and awareness of cryptocurrencies in Canada have sharply increased. This recent rise in the popularity of cryptocurrencies, especially Bitcoin, has resulted in a boom in new Canadian cryptocurrency investors.
Although you may not yet own any Bitcoin, you may be surprised to learn that the share of Canadians who own Bitcoin has more than doubled in only the last couple of years. So, it’s unsurprising to see the emergence of the Bitcoin casino in Canada; but the same benefits of cryptocurrency payments also attract major companies like PayPal, Microsoft, and even Starbucks.
A Closer Look at Industry Trends
To understand what utility cryptocurrencies like Bitcoin provide, it can be helpful to take a look at the different motivations for owning Bitcoin and how it is used.
Bitcoin holders use Bitcoin as a form of investment, but many owners also use it to make purchases. Advantages of paying with Bitcoin include improved anonymity and security, fewer fees, and the involvement of fewer intermediaries.
Apart from being a revolutionary new, secure payment method, Bitcoin has achieved such monumental popularity because it provides a novel opportunity for diversification into a high-return investment opportunity —over half of all Canadian Bitcoin owners have cited investment as the main reason they own Bitcoin.
Canadians Are Investing in Bitcoin
Looking at developments in the Canadian cryptocurrency industry: the province of Alberta —specifically Calgary— has established itself as an appealing destination for mining cryptocurrency.
Because current cryptocurrency mining technology relies on low-cost energy, Alberta’s economically-convenient deregulated power grid and abundance of natural gas resources make it an ideal location for mining operations. Albert and Calgary are also seeing increasing investments in other related firms specializing in digital asset storage and crypto-mining equipment manufacturing.
With that said, while the province’s electricity market is an asset, it has a long way to go in terms of regulations and legislation.
The Costs and Risks of Cryptoassets
In Canada, cryptocurrency companies face many regulatory challenges, and further, according to the Bank of Canada, the perceived price volatility of crypto-assets like Bitcoin has been the main obstacle to its more widespread acceptance as a form of payment.
Another issue that has hit the headlines recently is the environmental cost of producing cryptocurrency. Bitcoin, like most other blockchains, uses an electricity-intensive “proof-of-work” algorithm. To keep running, Bitcoin uses a volume of electricity equivalent to the electrical consumption of the entire country of Belgium.
With that in mind, despite the benefits, the province of Alberta provides to crypto mining, its carbon pricing system is a disincentive. However, even if no change to Alberta’s carbon pricing system is forthcoming, perhaps technological developments in crypto mining can offer a solution; new “proof-of-stake” technologies could soon resolve the issue by decreasing energy consumption by up to 99.9%.
The Future of Cryptocurrencies Like Bitcoin in Canada
When it comes to cryptocurrency regulation, what should be determined is what problem is trying to be solved and whether a particular solution would actually solve that problem or simply create more issues. Politicians should not be afraid of crypto but celebrate its opportunities.
And, if you have heard of Bitcoin but have yet to get in on it yourself, you should know that, unlike some other cryptocurrencies, there is a finite amount of Bitcoin to go around: about 21 million coins. Of these finite Bitcoins, 19 million have already been mined.
With how much the industry has matured since its inception over a decade ago, buying Bitcoin is now easier than ever. Barriers to entry have been reduced, if not outright eliminated, and new investors looking to buy can easily use cryptocurrency exchange mobile apps to obtain Bitcoin safely and conveniently.