You’ve likely heard a friend of a friend mention the word ‘bitcoin’ or at the very least noticed a news headline on your Facebook feed about the digital currency boom. For the average person, the idea of this intangible, electronic currency sounds more like the plotline for a dystopian Hollywood blockbuster hit than reality.
The truth is, bitcoin and other cryptocurrencies are only gaining in popularity. According to market watch site CoinMarketCap, despite numerous ups and downs, (at the time this story was written) there’s been a whopping 3,400 per cent increase in the dollar value of cryptocurrency in the last 12 months alone.
“Cryptocurrency and blockchain are going to be more disruptive than the internet,” said Canadian businessman Anthony Di Iorio, co-founder of the cryptocurrency Ethereum and founder of Jaxx, a digital wallet where crypto coins are stored. “It’s very similar to people in the early ’90s saying, ‘Why should I care about the internet.’ Even back then there were people who had concerns about it and didn’t really know what it would be good for, and now we can see what’s emerged and how valuable and groundbreaking and disruptive it’s been on many, many sectors.”
So instead of burying your head in the sand, it might be time for you to understand cryptocurrency and it’s powerful potential. Not sure where to start learning about it? Worry not! Here’s everything you need to know.
In the most basic sense, what the heck is cryptocurrency?
Cryptocurrency is a digital currency that uses cryptography (a way of scrambling up normal text so it can only be understood by the intended person) to make your transactions secure. Currently, there are already companies (including certain airlines) that allow people to trade in digital earnings for real world items.
“Cryptocurrency is a replacement for the traditional centralized banking systems and currencies that we’re so used to having right now,” says Di Iorio. “Think of it like a new currency for the internet.”
What is the blockchain and how does it relate to cryptocurrency?
The blockchain is where all of the crypto information is stored. It’s a digital ledger, or a means for recording data, that tracks every single transaction ever made.
For example, on January 3, 2009 the first ‘block’ was built on the blockchain, and you publicly see that record here. There have been over 297 million transactions (as of the day this article was written) recorded since its inception in ’09.
Okay, I’m starting to have fomo. How can I buy some coins?
There are a few options for Canadians. First, you can find an exchange that converts Canadian dollars into a big-player currency like Bitcoin or Ethereum or Litecoin. From there, you can trade them into one of the many other coins out there — as of today, there are over 1,500.
Places like Quadriga CX require Canadian users to take several steps (like upload a passport photo, a current selfie and provide personal details) in order to validate their identity and set up an account. Once the process has been approved, which often takes days, a bank account can be linked and funds bought in the market.
If linking a bank account or sending a passport photo feels too intimidating at this stage, other websites (like Coinbase) allow Canadians to buy currency using a credit card; however, there’s a max $200/day you can purchase.
How can I turn my cryptocurrency into cash?
Bitcoin ATM machines work similarly to traditional ATMs, where you can trade cash for crypto, or crypto for cash, though not all machines work both ways. According to Coin ATM Radar, there are currently 354 bitcoin ATMs across Canada. As to be expected with all banking, there will be fees.
What’s a digital wallet and why should I use one?
You don’t walk around grasping all of your money in your hands at once — you keep it in a wallet. Crypto is kind of the same. Coins can be kept on an exchange (the website where you might initially buy your currency), but it’s not a great idea. “Keeping your money on an exchange is as safe as the people running it,” says Di Iorio, who warns these exchanges can be hacked since they’re on centralized servers.
Instead, consider a multi-platform digital wallet, like Jaxx, which will keep your coins securely in your own hands.
Why should Canadians care about cryptocurrency?
Cryptocurrency has the power to turn everyone into their own bank. Goodbye, annual fee! “It’s a massive, decentralized system for moving values from one person to another without needing a third party like banks or government currencies or credits cards,” says Di Iorio.
Not to mention: disruption. “This will be more important than the internet. It’s going to create new sectors just like the internet did,” Di Iorio explains. “It’s going to create new opportunities for job growth.”