I have been asked this question over and over again and I decided to share this with everyone and especially with people in Canada.

This post is NOT:

to explain what a Cryptocurrency is or to talk about how awesome or how bad it is
to evaluate Bitcoins or any other coin in the market
to recommend buying or selling any Cryptocurrency at any price
a trading/investment strategy
for professional traders

This post is:

a very long one
for beginners who need help taking the first step in the Crypto market
to explain basic concepts around Exchange Sites
to explain some of the issues people living in Canada might struggle with

So, here we go ...

I struggled for a while to find the best Cryptocurrency exchange for myself to end up registering in so many exchanges because I couldn’t find one exchange that does everything I need (Plus, the fact that different coins are listed in different exchanges).

So, here we go ... I will try to make it as simple as possible. I will explain the concept first and then give you the tools and how to use them to trade. I just want to note that this is only to get you started and give you the very basic tools. Once you get started, do your own research on which coins to buy, which exchange to use, which transfer method would maximize your profit … etc.

Part 1: Explain the Concept

You probably have heard about different exchanges, online wallets, and other terms people use in this market. I will use a simple example to explain some of these terms.

Let's assume you want to buy a new mobile phone and here is the process you followed:

You go to the mall
You find a mobile seller (mobile retail store)
Once agreed on the price, you complete the transaction by giving him some cash money and receiving the new mobile.

The key elements in the above example are the following:

Buyer: You
Seller: Mobile Retails Store
Transaction Location: The Mall
Payment Method: Cash
Items purchased: Mobile

Translation to Cryptocurrency world

let's translate the above elements to the Crypto world:

Buyer: Cryptocurrency Buyer (you again but sitting behind your laptop)
Seller: Cryptocurrency Seller (someone anywhere in the world sitting behind his laptop)
Transaction Location: Exchange Site (Some people call it Exchange Platform)
Payment Method: Cash or some other Cryptocurrency.
Items Purchased: Cryptocurrency (e.g. Bitcoin)

So, Cryptocurrency exchanges are the place where you can buy and sell your coins.

Examples of Popular Exchanges:

A couple of important points about Exchanges:

Fiat Currency: Not all exchange sites allow you to buy Cryptocurrency in fiat currency (e.g. USD or CAD). For example, you can’t buy Bitcoins in Binance.com (one of the top exchange sites) with your credit card.

Question: How do I trade in such Exchanges that don’t allow fiat currency trading? Answer: You can buy some Bitcoins or Ethereum in one of the exchanges (such as Coinbase) that allow fiat currency and easily transfer your Bitcoins to another Exchange (such as Binance). Then, you trade your Bitcoins for other coins you want to buy. Keep reading to get to a practical example.

Canadian Dollar Withdrawal: Very few exchanges allow you to buy or, more importantly, withdraw Canadian dollars. The first thing I asked myself when I started Cryptocurrency trading is: when I make some profit, will I be able to withdraw my money to my Canadian bank account or not? Coinbase, for example, allows you to buy with Canadian dollars (CAD) but doesn’t allow you to withdraw your money at all if you are in Canada. You can transfer your money to another exchange, but you can’t withdraw Canadian dollars from Coinbase. (Note: Coinbase allowed this in the past, and it may allow it in the future, but as I’m writing this article Coinbase doesn’t allow CAD withdrawal)

Cryptocurrency Wallets: These are different ways to store your Cryptocurrencies. There are different ways to store your coins such as Exchange built-in Wallets, Desktop Wallets, Online Wallets, Hardware Wallets, and others. For simplicity, I will use Exchange built-in Wallets in this post, which I don’t see a harm in using for small investment amounts for a short time. However, I recommend that you use a different kind of wallets later if you want to become a professional investor in the Crypto market. Read the following article to know more about different wallets: Wallet-desktop-vs-hardware-vs-online-vs-paper-vs-exchange

Question: I live in Canada, which exchange should I use? Answer: As I said above, there are few exchanges that allow CAD deposit and withdrawal. However, always do your own research on each one of them before investing any amount of money. Look for comments and reviews around security, liquidity, support, and overall rating. I personally use QuadrigaCX to withdraw my money.

Putting it all together through Practical Examples:

Scenario#1: You decided to buy Ripple (XRP) via Binance Exchange.

Scenario#2: A month later, you decided to sell them and get your money back in CAD.

Now before we start applying any of these scenarios, we will need to setup the tools that we will need.

Part 2: Tools and How to Use them

Let’s start by setting up our accounts in the Exchanges we want to use. If I were you, I would do this as soon as possible because the verification process might take some time in some exchanges.

I personally use the following exchanges: Coinbase, Binance, QuadrigaCX, Qryptos (Japanese Exchange), Cryptopia and Kraken.

a) How to set up a Coinbase account

Step 1: go to: https://www.coinbase.com/join/5a3804d6be3693011b8992bf (using this specific link will reward you and me with USD 10 worth of Bitcoins if you initiate a buy or sell of USD 100 or more) – check Coinbase referral program

Step 2: a verification link is sent to your email. Find the email and click “Verify Email Address”

Note: The email might be found in the junk folder if you couldn't find it in the inbox folder.

Step 3: enter your local phone number. Phone number might be used for login (2-step verification) and for transaction verification.

Step 4: a verification code is sent to your mobile number. Enter the code in the new screen (see below) and click "Submit"

Step 5: your dashboard page will open. Scroll down to the bottom. Click on add a payment method.

Step 6: Click on Credit/Debit Card and enter your credit or debit card information

Step 7: Coinbase will make two withdrawals and reverse them later (you won’t be charged anything for this). The point is that they want to know that you have full control over this credit/debit account. So, please login to your bank account online and open the bank statement for the card you just entered its information. You will find two transactions in the same date with description indicating that these are related to Coinbase. Copy just the cents amounts from both transaction to the page showing on Coinbase (see below) and click “verify your card”

Congratulations! Now you can start trading within $250 limit. You can increase your limit if you go to Settings >> Limits >> upload your ID

b) How to set up a Binance account

Step 1: go to https://www.binance.com/?ref=13077900 and click on Register

Note: Again I’m including my referral number in this process – check Binance referral program

Step 2: Fill out the registration form. Click Register. Fit the puzzle piece in the picture (another way to ensure that you are not a robot)

Step 3: Email verification. Open your email inbox, find an email from Binance. Open it and click on “Verify Email”

Step 4: Google Authentication (optional but strongly recommended). Click on Google Authentication. Follow the steps to install and setup the Google authentication app.

Step 5: Account Verification: Open your account settings.

Once the account settings page is shown, click on “Submit Verification Documents”

Step 6: Provide information/documents required for the verification. I personally provided a copy of my driver license in Canada for the identity verification in addition to the selfie with the driver license.

It takes few days to get the verification done from Binance side. So, just wait and relax.

c) How to set up a QuadrigaCX account

Step 1: Go to https://www.quadrigacx.com/?ref=3opyse7tbrvxulkai2j33f9h and click on “Register Now”

Step 2: Fill out the registration form. Then, save the client ID provided because you will use it every time you want to login.

Step 3: Login to your account. Find the “verify” menu item and open this form.

Step 4: Fill out the member verification form

Step 5: Complete the member verification step by choosing one of two ways: ID & address verification or EQUIFAX. QuadrigaCX says the EQUIFAX way is faster. I personally found the ID & address verification simple enough, but it’s totally up to you.

Step 6: Review the withdrawal options and think about which one you want to use to withdraw your money when you want to.

Part 3: Applying our Practical Example – Scenario#1

Step 1: Login to Coinbase: https://www.coinbase.com/signin

Step 2: Buy Bitcoins with your credit/debit card: Navigate to the Buy/Sell page

On the buy/sell page, you will see the following:

a. Bitcoin (BTC) is selected by default (no action is required unless you want to buy something different)

b. The payment method you registered earlier when you created the account is selected by default (no action is required)

c. The only thing you need to enter is the amount you want to buy either in CAD or in BTC. Coinbase will calculate the equivalent value for the other currency automatically based on the current BTC price in the market. Keep in mind the amount you can invest is limited based on the verification level you have.

d. Take a look at the right side of the page. Coinbase will give you full details about this transactions including Coinbase fees to complete this transaction and the fees associated with using the payment method you chose to pay with

Click on “Buy Bitcoin Instantly”

Step 3: Send your Bitcoins (BTC) to your Binance address

You might have to wait for your transaction to be confirmed first in Coinbase. Once you see the Bitcoin amount you purchased available in your portfolio, you can now send it to any exchange you want.

Here is how to send it to your BTC address in Binance. First, you need to login to Binance to copy your BTC address. Go to www.Binance.com >> click on Login >> enter your credentials

From the Binance main page, navigate to “Funds” >> “Balances”

Find BTC Coin and Click on “Deposit”

Click on “Copy Address”

Once you have the address copied, go back to your Coinbase Account. Then, click on “Accounts”

Under BTC Wallet: Click “Send”

In the Recipient field, enter or paste the address you just copied from Binance. Make sure it’s the right address. Otherwise, your money will be lost. Then, enter the amount you want to transfer and an optional message. Then, Click “Continue” and finish the transaction.

Step 4: Login to Binance: Go back to your account in Binance. Shortly after sending your bitcoins from Coinbase, the amount will appear in your Binance account (sometimes it takes up to 30 mins. So don’t freak out if you didn’t find it transferred in few minutes)

Step 5: Exchange Ripples for Bitcoins

In the main screen in Binance, navigate to “Exchange” >> “Basic”

In the “Basic” screen, follow these steps to buy Ripples:

a. Select BTC at the top right of the page as shown in the picture below

b. Write “XRP” (Ripple Symbol) in the search bar

c. Select the “XRP/BTC” pair

d. In the middle of the page, select the “Market” tab to trade at the market price

e. Under the “Buy XRP” section, enter the amount of XRP you want to buy with your available BTC fund. Then, click “Buy XRP” to confirm the transaction

Congratulations! You just completed this scenario.

Again, I just want to highlight that this example is just for beginners to help understanding the basic concepts and tools. When you get more experience, you will figure out the best and most profitable way for yourself. For example, I found buying ETH and transferring it across different exchanges is faster and cheaper than transferring Bitcoins.

Summary

Here is the summary of what you have done so far:

You created and verified accounts on several exchange platforms, which gives you the ability to buy and sell a wide range of digital coins using Canadian dollars.
You bought Bitcoins using your credit card
You were able to transfer your Bitcoins from one exchange to another
You bought Ripples with Bitcoins

In my next post, I will show the steps to complete scenario#2 - although I believe if you got this far in my post, you probably have enough knowledge to complete it on your own