This guide will bring you step-by-step through the process of making your first Bitcoin purchase. Just follow the steps below where the process is explained with simple steps and easy-to-follow screenshots. Learn how to buy bitcoin with a credit card.
Bitcoin, and cryptocurrencies in general, are perfectly legal in Canada—and most countries throughout the world. However, the subject is still taboo in some circles and there is a lack of understanding within the general population about what Bitcoin is, and why it is so revolutionary. Most people still see it as ‘funny internet money’ and dismiss it as a passing fad.
One of the biggest hurdles, we believe, is that people think you need to buy 1 full Bitcoin. This is not the case. You can buy a fraction of a Bitcoin—any amount you like!
Bitcoin is revolutionizing not just the way people store and transfer value, but with the introduction of blockchain technology and smart contracts, it is also changing the very nature of financial transactions. With traditional fiat currencies (CAD, USD, EUR, JPY,…) quickly becoming obsolete through rapid inflation, Bitcoin’s introduction was timed to perfection. The world is ready for a banking revolution—and the herd is coming fast!
Is Bitcoin really that popular?
Bitcoin was released to the world in late 2009 and mostly remained as an experimental idea within cryptography circles. Its value began slowly rising from just a fraction of 1 cent in May 2010, until it began to rise in popularity during 2011 and 2012. By the time the world’s first Bitcoin ATM was launched in Vancouver, B.C., on 29 October 2013, Canadians could buy 1 Bitcoin for approximately $218. Today, one Bitcoin reached over $21,800. Had you invested just $100 in Bitcoin in October 2013, it would be worth almost $10,000 today. That’s a staggering 9,900% gain in just four years. You don’t want to miss the next four years’ gains, do you?
Coinbase, the website we recommend in this tutorial, are now signing up over 100,000 new customers per day, eager to buy bitcoin and stake their claim on a small portion of the new currency. That is a flashing indicator that things are moving fast.
FUN FACT: Had you invested USD$100 in Bitcoin on the day it became available on the very first exchange in March 2010, it would now be worth over USD$330,000,000.
Where to next?
There will only ever be 21 million Bitcoins created. This is mathematically coded into the digital currency and will not change. Therefore, increased demand will mean an increased price for each Bitcoin. Banks, hedge funds and investment firms are chomping at the bit—excuse the pun—to enter the market, and will do so as soon as government regulation is in place. For these reasons, some people are expecting the value of one Bitcoin to increase dramatically over the coming years as demand increases further on the finite supply of coins.
We want to make sure as many of you as possible are taking advantage of this monumental shift in economics as early as possible. The best thing you can do right now is purchase a small amount of Bitcoin and hold it as an investment for at least a few months, if not a few years. Digital currencies are subject to Income tax rules, so there will be no immediate tax liabilities or CRA declarations required. You only have to declare your profit/loss on your Income Tax return after you sell your cryptocurrencies—making it an ideal long term investment.
Of course, it goes without saying that all investments can go down as well as up—and Bitcoin’s volatility is testament to this. But we’re confident on the next few years and see Bitcoin as a great long-term bet.
So, what are we waiting for? Let’s get you started…
Step 1 – Creating Your Account
Using our guide you can claim a Free 10% Bonus and instantly turn your first CAD$130 into almost $138. That’s right, you can buy your first USD$100 worth of Bitcoin (currently approx. CAD$130) and, after fees, you’ll have roughly $138 of digital currency in your account. There’s no catch, everyone is entitled to the same 10% bonus.
To claim your free 10% bonus Bitcoin, you can sign-up to Coinbase using a referral link. That way, both you and the person referring you, will earn 10% on your first USD$100 (~CAD$130) purchase. Our referral link here at Canadian Crypto is https://www.coinbase.com/join/57493e402ee6f84f9c0004ff. If you click that link, or the button just below, it will take you to the Coinbase website where you can start the sign-up process.
NOTE: The link will open in a new tab or window, so feel free to keep this tab open and switch back and forth between the two tabs, following the simple instructions as you go.
1.1 Setup A Coinbase Account
It may seem like there are a lot of steps below, but they are very easy to complete and the screenshots will help you to easily follow the instructions. The whole process should take no longer than 20-30 minutes. Once you have done this initial setup, any purchases you make in the future will be very quick and secure.
Once you click the button or link above, you’ll be taken to a sign-up screen on the Coinbase website where you will enter your account details.
Enter the following details…
- Enter your First Name
- Enter your Last Name
- Enter your Email address
- Enter a new Password (you must choose a strong password, so be prepared to write it down if you need to remember it)
- Check the spam prevention box (I’m not a robot)
When ready, check the User Agreement box and then click the Create Account button.
1.2 Setup Account Security
You should receive an email asking you to confirm your email address and verify your account. Click the link in the email to verify your account. After you have clicked the link you will be returned to your Coinbase account and will see the Dashboard. Next click the Settings tab at the top of the page, followed by the Security tab underneath.
Under the Phone Numbers heading, click the Verify a Phone button. Provide the phone number that you’d like to use and click Next. You will need to use a cell phone, as landlines are not supported for receiving 2FA authentication codes.
You should receive a one-time verification code via SMS. Enter this code into the box provided and then click Verify to complete the phone verification security feature. If you did not receive the code within about 30 seconds, you can click ‘Resend Code?’ to try again.
You have now verified your phone and the next step is to enable the Google Authenticator app.
1.3 Enable Google Authenticator
As an additional security measure, you should enable the Authenticator app to secure your account even further. Download the Google Authenticator app for your device—iOS or Android (Google help article), and then follow the steps below.
- In your Coinbase account, under Two-Factor Authentication, click Enable Authenticator,
- If you have already verified your phone in the steps above, you should receive another one-time SMS message with a unique code (if the code does not arrive, click Resend SMS),
- Enter this unique code into the box provided on the Coinbase website,
- Open the Authenticator app on your phone and scan the barcode shown on the Coinbase website,
- Write down, or save to a password manager, the unique 16-digit code shown (very important!),
- Save the new connection in the Authenticator app,
- Enter the Authenticator code (shown on your phone) into the box provided.
- Click Enable.
Finally, under Require verification code to send:, make sure you select ‘Any amount of digital currency’, as this is the most secure setting.
Now, anytime you are sending transactions, you will need to provide an Authenticator code each time. This code changes every 30 seconds so it’s a great way of securing your account. Only someone who has your Coinbase password and your phone can send coins out of your account.
1.4 Verify Your Identity
The final part of your account setup is to verify your identity. This is required in order to be able to make purchases. Coinbase, like most cryptocurrency exchanges, have strict KYC (Know Your Customer) policies which require them to collect identity documents.
Under Settings, click the My Profile tab and you should see a link asking you to verify your identity.
The verification process is automated, simple and straightforward—however it can seem scary if you have never done this type of thing before. You need to have photos of your driving license (front and back) ready. You can do this quickly by taking photos with your phone and sending them to your computer. If you do not have a drivers license, you can use your Passport instead.
Once you have completed the ID verification process, the next step is to add a payment method, as outlined below.
Step 2 – Purchasing Bitcoin
2.1 Add A Payment Method
Next you’ll need to add a credit card to your account so you can purchase your digital currency. Click the Settings tab at the top of the page again, and now click Payment Methods underneath.
- Select Add Payment Method near the top of the page,
- Choose Credit/Debit Card on the payment method selector,
- If you have not already done so, you will be required to complete a photo ID verification,
- When ID verification is complete, you will be brought back to the card verification screen,
- Enter your credit card information, then click Next,
- A prompt explaining the 2 pending charges Coinbase will make to your credit card will appear, click Start Charge Verification,
- Login to your online banking account and check for the two small pending charges,
- Enter those amounts on the Coinbase verification screen, then click Verify Charge Numbers.
You should now see a window that says “Credit/Debit Card Added’ as well as a ‘Buy Digital Currency’ button. You can now click the Buy Digital Currency button to proceed to the purchasing phase.
2.2 Purchase Your Bitcoin
In order to get your CAD$12-$13 of free Bitcoin, you will need to purchase at least USD$100 (~CAD$130) of Bitcoin. If you are not ready to purchase that amount just yet, you can purchase a smaller amount and wait until you have more funds available. When you make purchases totalling approx. CAD$130, the 10% bonus Bitcoin will be subsequently deposited to your account. Accumulated purchases must total USD$100 within 180 days of signing up.
Click Buy/Sell in the main menu, and then make sure the Bitcoin box is highlighted. If not, simply click it to select it.
You should see your Payment Method in the next box below. If you added more than one credit card, you can select your preferred card for the purchase.
Next enter the Amount you wish to buy. To receive the 10% bonus right away, enter CAD$130 as the amount.
NOTE: You will only receive USD$10 of free Bitcoin regardless of the amount you purchase. In other words, purchasing CAD$260 will not get your CAD$26 of free Bitcoin.
The summary box on the right hand side will show you the details of your purchase, including the amount of Bitcoin you are purchasing as well as the fees associated with the transaction.
When you’re ready click the Buy Bitcoin Instantly button. You will be shown another screen where you can confirm the details once again before continuing.
Finally, click the Confirm Buy button.
Congratulations! You’ve just completed your first Bitcoin purchase.
If you are new to Bitcoin, we advise you read as much as you can about exchanges, wallet security and cryptocurrencies in general. Start by visiting our Crypto News blog where we periodically publish cryptocurrency-related articles, reviews and tutorials. We also have a Resources section where you can find helpful links for products and services that we recommend.