My First Bitcoin

Canadian government released their first study on digital currencies, Digital Currency: You Can’t Flip This Coin, on June, 2015. In this comprehensive report, one line in particular caught my attention:

“Witnesses said that Canada could become a global hub for digital currencies.”

As a proud citizen of a great nation, I’m obligated to join this tremendous movement. First, I need a wallet and some bitcoins, and this is how my adventure begins.

Setting up a wallet was actually very straight forward: choose a wallet from the list provided by bitcoin.org, follow the instruction, and voilà, you have your first wallet. All together I set up three wallets: one wallet for my laptop (Multibit), one for my phone (blockchain) and a web based wallet (Coinbase) — all troubles free. My next step was to put some bitcoins in my wallet, via some online Bitcoin Exchange.

Maybe due to different regulation between countries, Coinbase (a US based exchange) did not let me buy nor sell any bitcoins, and Bitstamp (an Europe based exchange), required only the following documents for account verification:

  • international passport (double page);
  • national ID card (both sides);
  • driver’s license (both sides);
  • bank statement or utility bill for utilities consumed at your home address or tax return, council tax or certificate of residency issued by a government or a local government authority.

So with all things considered,I decided to look for a Canadian based exchange instead. A quick search on “Canadian Bitcoin Exchange” returned Cavirtex. Its web page is well made and it has been in business since 2011, so I decided to give it my first bitcoin business. At least that was what I thought.

Before this bitcoin hunting adventure, I have assumed Bitcoin is just a beefed up Paypal or online credit card; now I know it is a very different animal. Paypal and credit card, have mechanisms to allow transactions to roll back (i.e. refund), but Bitcoin has no such device — its transaction is irreversible; hence all Bitcoin exchange takes extreme precaution to prevent a customer cancels the payment after any bitcoins have been sent . So far both Canadian based exchange I have found (the second one being CanadianBitcoins.com) accept neither credit card nor Paypal payments, and accepts either cash (in-person payment or via postal mail) or direct deposit/withdraw with a validated bank account (by providing bank account number and transit number etc.), which I am very hesitated to provide. This was my first hurdle in getting into the digital/crypto currency game.

How else can I get my bitcoins then? I asked myself, and I remembered the Bitcoin Bank Machine (a.k.a Bitcoin ATM) from the news last year, and Google told me that there should be one such machine near my place provided by Cavirtex. This is the part of the story I left the cyberspace and hopped into the real world for my first virtual bitcoin. Paradox.

The next day, I went shopping.

After circling around for an hour or so and failed to locate the machine, I went back to the internet for answer. It turns out Cavirtex has stopped it operation due to a major security breach and now is operated by a New York based Bitcoin exchange Coinsetter; this explains the lack of Bitcoin ATM machine by Cavirtex. There must be another machine somewhere near my place. Perseverance does pay, and I found this website, which let you find Bitcoin ATM machines around your neighbourhood, and there is one right next to where I work.

After I wolfed down my lunch the day after, I dashed across the street where the ATM was alleged to be, and there it was — the Bitcoin sign on the front window of a nutrition product store (frankly, I would not have noticed the sign if I were not looking for the machine). I stepped inside with a smile hanging on my face.

After a few pleasantry exchanged, I told the salesperson the reason of my visit, he was enthusiastic about it and gladly ushered me to the machine; however when I asked him for a demo etc., he shook his head and told me he had not used this machine before. So, we played with the machine together, and we figured out that all we had to do was to insert cash to the machine, and to show my wallet’s address (in the form of a QR code) to the machine’s camera. Less than a minute later, my wallet confirmed the translation was done (with a ~3 confirmation — this will be for another post). I chatted with the salesperson a bit more before I left the store, about how many people used the machine and is the store accepting bitcoins etc. The store does not accept bitcoins yet, he said, and definitely will consider it if more customers ask for it.

For this adventure, I paid $20 Cdn for 0.0579 BTC. On the date of the transaction (June 25, 2015 at ~1:51 pm), the exchange rate for one bitcoin was approximately $303.75 Canadian dollar, which should gave me 0.0658 BTC instead, so the difference must be the transaction fee ($2.41 Cdn dollars).

So this is my first Bitcoin related adventure. My next Bitcoin adventure will be about actually buying something with bitcoins.

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