Crypto basics for Canadians: Bitcoin, Ethereum, blockchain, and trading platforms explained

• Crypto assets are digital assets that can be bought, sold, transferred, or held through blockchain-based systems.=
• A blockchain is a shared digital ledger that records transactions in connected blocks.
• Bitcoin and Ethereum are two of the most widely known crypto networks, but they were built for different purposes.
• Value-Referenced Crypto Assets, often called stablecoins, are designed to track another asset, but they are still crypto assets and are not risk-free.
• A crypto trading platform helps users deposit funds, withdraw, buy, sell, hold and, in some cases, stake crypto.
• Before choosing a platform, beginners should compare regulation or registration status, custody practices, fees, spreads, withdrawal costs, funding methods, account security tools and risk disclosures.
• Crypto assets are volatile and education can support better decision-making, it does not remove market risk.
• Crypto assets are not covered by deposit insurance, and CIPF coverage does not apply to crypto assets.
   

Crypto is a broad term that refers to digital assets that use blockchain technology to record ownership and transactions. For Canadians who are new to crypto, this intro guide will help you understand Bitcoin, Ethereum, blockchain networks, Value-Referenced Crypto Assets, crypto trading platforms, wallets, fees, custody, volatility and risk.

Bitcoin is one of the most widely recognized crypto assets because it was the first cryptocurrency and remains a major reference point in crypto markets. Bitcoin is a decentralized digital asset for value transfer and is often discussed as a store-of-value asset, although it can be volatile. Ethereum is another widely used crypto network, is a programmable blockchain used for smart contracts, applications and token-based systems. Value-Referenced Crypto Assets, often called stablecoins, are designed to track the value of another asset, mostly a fiat currency or, in some cases, a commodity. Still, they remain crypto assets and are not interchangeable with cash or bank deposits.

This guide is educational and is designed to help users understand crypto concepts and platform comparison factors. It is not a recommendation to buy, sell, hold or trade any crypto asset.

Many Canadians first learn about crypto by searching for Bitcoin, Ethereum, blockchain or stablecoins. Understanding individual terms is helpful but is only the first step.

A beginner also needs to understand how crypto trading platforms work, how wallets and custody work, how fees are charged, how crypto transfers differ from bank transfers, and why scams or phishing attempts are difficult, if not impossible, to reverse once crypto is sent.

This guide connects the basic concepts to the practical questions Canadians often ask next:

• What is crypto?
• How does blockchain work?
• What is the difference between Bitcoin and Ethereum?
• What is a crypto trading platform?
• How do wallets and custody work?
• How much does it cost to buy crypto?
• How can beginners avoid common mistakes?
• What should Canadians compare before choosing a crypto platform?

This guide is a starting point. Each section links to a more detailed Ndax guide so users can move from basic definitions to platform comparison, fees, funding, custody, recurring buys, staking and more advanced trading tools.

For Canadians, learning crypto basics is not only about understanding Bitcoin, Ethereum, blockchains, or stablecoins. It is also about understanding what happens when a user funds an account in Canadian dollars, places an order, pays a spread or trading fee, holds crypto through a platform, withdraws crypto to a wallet, or sends funds back to a Canadian bank account.

A beginner should be able to understand how fees are charged, which assets and networks are supported, how withdrawals work, how custody is explained, and what risks remain before confirming a transaction.

For example, on a Canadian crypto trading platform like Ndax, the user journey may include funding an account in Canadian dollars, reviewing the quoted price or order book, checking applicable fees, deciding whether to hold crypto on the platform, and understanding withdrawal options before moving funds or assets.

1. What is a blockchain?

A blockchain simply refers to a digital ledger that records information in connected blocks. In crypto, blockchains are mostly used to record transactions, balances and confirmations of changes in ownership.

Blockchains vary widely across different ecosystems. Bitcoin’s blockchain, for example, is primarily used to record BTC transactions, showing when Bitcoin moves from one address to another. Ethereum also uses a blockchain to record ETH transactions, as well as smart-contract activity, application interactions, non-fungible token marketplaces, Value-Referenced Crypto Asset transfers, blockchain-based games, tokenized assets and much more.

Essentially, a blockchain can be compared to a shared record book. Once a transaction is confirmed and added to the chain, it becomes difficult to change without the network detecting it. This is one reason blockchain technology is often described as harder to alter than a single central record system.

Blockchain technology is important because it allows participants to verify transaction history without relying only on one central recordkeeper. However, blockchain technology does not remove all risk. Users can still face volatility, scams, technical errors, platform risk and the potential complete loss of funds if crypto is sent to the wrong address.

Learn more: What is a blockchain?

2. What is Bitcoin?

Bitcoin is a decentralized digital currency that runs on a public blockchain. The word “Bitcoin” is often used in conversation to refer to the Bitcoin network and the native BTC asset that moves across that network.

Bitcoin is the first crypto asset many beginners are introduced to. This is because it is the oldest and most widely recognized crypto network. At its core, Bitcoin is a way to transfer value online without the use of financial intermediaries, like banks or money transfer services. Bitcoin is often described as a store-of-value asset, although its price can be volatile and rise or fall sharply.

Bitcoin has a maximum supply of 21 million BTC and is legal to buy, sell and hold in Canada. However, Bitcoin is not legal tender. Crypto assets are not protected like bank deposits, are not covered by deposit insurance, and CIPF coverage does not apply to crypto assets.

Learn more: What is Bitcoin (BTC)? Crypto 101 for Canadians

3. What is Ethereum?

Ethereum is a programmable blockchain. It supports smart contracts, applications and token-based systems, among others. The word “Ethereum” usually refers to the Ethereum network, while Ether, or ETH, is the asset used to pay for transactions and network activity.

Ethereum and Bitcoin were created for different purposes. Bitcoin was mostly built for transferring and storing value. Ethereum supports smart contracts, which are programs stored on a blockchain that can run when certain conditions are met.

Ethereum is used for many types of blockchain activity, including decentralized applications, tokens, stablecoins and other smart-contract-based systems. Like other crypto networks, Ethereum also carries risks, including volatility, technical risk, smart-contract risk, custody risk and network-fee variability.

Learn more: What is Ethereum (ETH) and how is it different from Bitcoin?

4. What are Value-Referenced Crypto Assets (stablecoins)?

Value-Referenced Crypto Assets (VRCAs), or stablecoins, are crypto assets designed to track the value of another asset. Many people refer to these assets simply as stablecoins, although Value-Referenced Crypto Asset is the term commonly used in Canadian regulatory discussions.

A stablecoin may be designed to track a fiat currency, such as the U.S. dollar, Canadian dollar, or (in some cases) another asset, such as gold.

Stablecoins are commonly used for transfers, settlement and trading. However, they are still crypto assets. They are not legal tender, not bank deposits, and not risk-free.

Holding stablecoins is not the same as holding cash. Before using a stablecoin, users should understand the asset’s issuer, reserve disclosures, redemption process, platform availability, fees, and risks.

Learn more: What are Value-Referenced Crypto Assets (VRCAs) and why do Canadians use them?

5. What is a crypto trading platform?

A crypto trading platform is an online service that lets its users buy, sell, hold, deposit and withdraw crypto assets.

In Canada, a platform may allow users to fund an account with Canadian dollars, place buy or sell orders, hold crypto balances, withdraw crypto to an external wallet, or withdraw Canadian dollars back to a bank account.

Not all platforms work the same way. Some platforms use an order-book model. This means users see bids and asks and place order types such as market or limit orders. Other platforms may offer a quoted buy/sell price where the cost is built into the spread.

A crypto trading platform is not the same as investment advice. On an Order Execution Only platform, users choose what to buy or sell, when to trade, and whether to hold or withdraw their crypto.

A beginner should also understand how the platform explains deposits, withdrawals, fees, custody, supported networks, account security and risk disclosures before funding an account.

For Ndax users, this also means understanding that the platform executes client instructions through its Order Execution Only service and does not recommend which crypto assets a client should buy, sell or hold.

Learn more: What is a crypto trading platform and what does it do?
 

Before buying crypto, beginners should understand that crypto assets are risky and can lose value. A platform can help users access crypto markets, but it does not remove market risk.

Canadians should also understand the difference between learning about crypto and deciding whether crypto is appropriate for them based on their risk profile and other factors. Educational content helps explain how crypto works, but it should not be considered personalized investment advice.

Before opening and funding an account, Canadians should review:

• How the platform explains fees, spreads, and withdrawal costs
• How crypto assets are held
• Whether users can withdraw crypto to an external wallet
• What account security tools are available
• Which assets and networks are supported
• How support works if something goes wrong
• Whether the platform clearly explains crypto risks

Related reading:

• How to buy crypto in Canada?
• What does it mean for a crypto trading platform to be regulated in Canada?
• How to spot crypto scams and phishing in Canada
• Wallets vs crypto trading platforms: where can Canadians store their crypto?
   

Users need a way to manage access to their crypto. That is where wallets and platforms come in.

A wallet helps users manage the keys needed to access crypto on a blockchain. A crypto trading platform may hold crypto on behalf of users through custodial arrangements. This can make the experience simpler, but it also means users should understand the platform’s custody practices, withdrawal rules, fees, security tools and regulatory status.

Another option exists, known as self-custody. This means the user is responsible for protecting those keys, not a platform. If the keys are lost, access to the crypto may be lost as well.

Users need to understand both approaches and determine which they are more comfortable with. Neither approach is automatically better than the other.

Related reading:

• Wallets Vs Crypto Trading Platforms: Where Can Canadians Store Their Crypto?
• Cold storage, hot wallets, and custody: what they mean in practice
• Why custody and segregation matter more than most crypto users think
• What does “proof of reserves” mean and why does it matter?
   

Beginners often focus on the headline trading fee, but the total cost of buying, selling or moving crypto includes several different components.

A trading fee is the fee charged to execute a buy or sell order. A spread is the difference between the buy price and sell price. A withdrawal fee may apply when moving Canadian dollars or crypto off a Canada-based platform. A network fee may also apply when crypto is transferred across a blockchain.

This is why Canadians should compare the full transaction path, rather than a single advertised number. The cost to fund, trade, hold, withdraw and move crypto can vary by platform, asset and network.

For example, a user buying crypto may need to consider the cost to deposit funds, place the trade, hold the asset, withdraw cash, or move crypto to an external wallet. A low trading fee may give the impression of being the lowest total cost in every situation, but that is not automatically the case.

For Ndax users, this means looking beyond the trading screen and understanding how funding, trading fees, spreads, withdrawal fees and network fees may affect the full transaction path.

Related reading:

• Crypto fee: what is the difference between trading fees vs spreads vs withdrawal fees?
• What does “total cost to own” means for Canadians buying crypto?
• How to avoid hidden fees (and what ‘zero-fee’ really means)
• Funding methods in Canada: how to fund your crypto account
• How does Ndax’s 0.20% trading fee work?
   

A strong crypto education journey should not end after a user learns what Bitcoin, Ethereum and blockchain are. Many Canadians start with a simple purchase, then later want to understand recurring buys, price charts, order types, staking, or more advanced account tools.

For beginners, that journey can look like this: 
 

Before opening or funding a crypto account, Canadians can ask:

• Do I understand what crypto asset I am buying?
• Do I understand the blockchain or network behind it?
• Do I understand that crypto prices can fall sharply?
• Do I know the difference between a trading fee and a spread?
• Do I know whether withdrawal fees or network fees apply?
• Do I know how the platform holds crypto assets?
• Do I know whether I can withdraw crypto to an external wallet?
• Do I know whether the platform is regulated or registered in Canada?
• Do I know how to protect my account from phishing?
• Do I know whether a crypto transfer can be reversed?
• Do I understand that Ndax provides Order Execution Only services and does not provide investment advice?

After learning the basics, Canadians can move from definitions to practical comparison. The next step is to understand how crypto platforms are regulated, how fees work, how wallets and custody work, and how beginners can reduce common mistakes before funding an account or moving crypto.

Start with these blogs:

• How to buy crypto in Canada?
• What does it mean for a crypto trading platform to be regulated in Canada?
• Crypto fee: what is the difference between trading fees vs spreads vs withdrawal fees?
• Wallets vs crypto trading platforms: where can Canadians store their crypto?
   

What is crypto in simple terms?
Crypto is a broad term for digital assets that use blockchain-based systems to record ownership and transactions. Different crypto assets can have different purposes, risks, fees, and network designs.

Is crypto legal in Canada?
Yes. Canadians can legally buy, sell, transfer and hold crypto assets. Some platforms may also offer staking for eligible assets, subject to platform terms and regulatory requirements. However, crypto assets are risky, not legal tender, and not protected like bank deposits.

What is the difference between crypto and blockchain?
Blockchain is the record-keeping technology. Crypto assets are digital assets that use blockchain networks to record ownership, transfers, and other activity.

What is the difference between Bitcoin and Ethereum?
Bitcoin is mostly used as a decentralized digital asset for value transfer and store-of-value use cases. Ethereum, by contrast, is a programmable blockchain that supports smart contracts, applications, and token-based systems.

Are stablecoins interchangeable with cash?
No. Stablecoins are not the same as cash or bank deposits. In extreme cases, their value can move away from the asset they are designed to track, which is known as depegging.

What does a crypto trading platform do?
A crypto trading platform lets users buy, sell, hold, deposit, and withdraw crypto assets. In Canada, some platforms also support Canadian-dollar funding, different order types, staking, recurring buys, and crypto withdrawals.

Is a crypto trading platform the same as a wallet?
No. A wallet helps users access their crypto stored on a blockchain. A trading platform lets users buy, sell, and manage crypto through an account and may hold crypto on behalf of users through custodial arrangements.

Does a regulated platform make crypto risk-free?
No. Regulation is designed to support clearer disclosures, compliance standards, accountability and oversight. It does not remove market risk, custody risk, platform risk, phishing risk, or user error.

What comes after learning the basics?
After learning the basics, Canadians may want to understand how to fund an account, place market and limit orders, read price charts, compare fees, protect their account, use wallets, or learn how staking works.

For a deeper comparison, continue to the next hub: Crypto platform safety in Canada: regulation, custody, and user protection