Cryptocurrency for Dummies

No, they aren’t illegal, and yes, you need to understand them in 2018.

If 2017 taught us anything it’s that the world is evolving, all the way to the actual currencies we’re using on a daily basis. If you’re like myself, 2017 was the year you first started paying with your phone, and this is only the beginning. With the excitement generated by massive social and economic movements the likes of which we’ve never quite seen, it’s time once again to face the facts – you don’t know your bitcoins, and that’s bad – the same way you got a strange look from your nephew a few years back when he showed up for Christmas and your VCR was flashing 12:00.


Think of 2016. Think of how things were placid and unexciting – yes, we could all see that Big Tech was (still is) brewing up all sorts of craziness and new ideas, from Elon Musk’s Tesla revolution to the ever exciting novelties that Apple will include in their next gimmicks. Meanwhile, banks were yet again racking record profits at their year-end, and nothing seemed in line to change that. Then came Bitcoin – and nothing was ever the same.

Evolution is good, because it generally means the old (dull, non efficient) is replaced with the new (sharp and cutting edge). What Bitcoin and cryptocurrencies brought the the table was a rubic-cube of possibilities, not only on the tech level, but also on the legal and financial level. The buzz words are numerous in this case – let’s review a few of them.

  • Bitcoin – Bitcoin itself is simply the most popular cryptocurrency. There are now thousands of cryptocurrencies available, the most notorious being Ethereum, Litecoin, DogeCoin, Dash, Ripple (which just closed a promising deal with AMEX), BitcoinCash, and omgcoin.
  • BlockChain – Blockchain is simply the technology that makes Bitcoin possible – as well as any other cryptocurrency. The beauty of blockchain is it’s distributed aspect, the fact that instead of being one ledger the bank has and keeps track of everyone’s transactions with, it’s actually the opposite – It’s everybody keeping track of what everybody’s transactions. This, ladies and gentlemen, is what everybody is raving about, because let’s face it, it IS revolutionary, and has numerous other applications in real life, namely with smart contracts.
  • Satoshi – You may or may not have heard bitcoin aficionados talking about exchanging Satoshis. These are one hundred millionth of a bitcoin (100 000 000), the smallest divisible share of a bitcoin, named after the creator of Bitcoin, Satoshi Nakamoto. Think of this as grams to an ounce of gold, or as a nickel to a $100 bill.
  • ICOs, or Initial Coin Offerings – This is when a company decides to launch a coin, and goes public with it’s asking of funds in exchange of said coin. One of the major aspects of the cryptocurrency so-called bubble is the sheer number of these, ranging from the altermondialistes to the downright ludicrous, which flooded the market since 2016. Companies launching an ICO will systematically release a white paper associated to their ICO: this white-paper explains in vast details the goals and milestones aimed by the company once it reaches its funding, but let’s face it, there are some dangerously ridiculously written whitepapers out there, so buyer beware. This is very specifically one aspect of the wild-west market that’s being discussed – as laws are often reactive to new technologies and phenomenon, it takes a certain amount of time and empirical experience to get to a sufficiently significant knowledge-base to legislate on a topic. And this, not silkroad, is the most probable reason why cryptocurrencies are still in a legal gray-area in Canada – there’s still so little data available to legislate on this topic that there lawmakers need to let nature take its course. It’s simple – a year ago, 99% of you didn’t know what Bitcoin was, so there was no need for a law, whereas now, millions of Canadian dollars went into Bitcoin and other currencies – and that means your tax dollar will take interest.
  • Wallet – Robin hood used a pouch, a textile bag to hold his gold tokens. Uncle Bob preferred a nice Italian leather wallet that could keep his large and not so large bills neatly packed in the confined space of his pocket, along with his driver’s license and his masterexpress card. It had to be one pocket though, because the other was first reserved to the Marlboro pack, and then later a nice clamshell cellphone. Now that we have Internet money, we keep it safely stored in – you guessed it – more internet, or rather what actually makes the internet: code. Now, keep in mind that de facto, any application or website allowing you to buy cryptocurrency will typically offer a wallet, inclusive and free of charge. It recommended, however, to use a third party wallet (it’s free and generally accepted as being a safer method of hoarding your coins, so why not, right?). Now, that being said, if you’re serious about crypto, and/or have a significant amount invested, do what the pros do and get a physical wallet, also known as a ledger.
  • Miners – Bitcoin mining has been a raging discussion, and also had a significant effect on the prices in the last couple of months, with raised miner fees among other things. This led to a number of speculations of all sorts, as if Cryptos needed anymore of it, but also leads to interesting discoveries. Matter of fact, a growing trend in northern areas is to simply heat your house with bitcoin mining machines. They are noisy lil’ doohickeys, but they also produce a significant amount of heat, so some Canadians decided to heat their houses with it, with positive results. If you’re off-grid on top of that, you’re living the dream my friend (!) … or someone’s dream, anyway. Don’t go Klondike, though – If you don’t know the difference between an ASIC machine and its counterpart the GPU or FGPA, or if the idea of hashing data makes you squinty eyed, simply move along to the next topics in this discussion.


Lets get this out of the way right off the bat – banks, and bankers, hate bitcoin. This is as true as your inner ear hates the shrill-sounding 24 000 rpm dentist’s drill, and for good cause. One might argue this is because it is the end of their status quo as final sayers and handlers of all things money, a sensation that’s probably not unlike that feeling you get when the needle plows through your gum’s nervous system after a little bit of preliminary talk (“You’re insured, right ?”).

Money is clearly not disappearing – it is however finding new ways to move and cryptocurrencies are direct proof, and now significantly evolving for the first time since the apparition of the internet. It’s only been a few years, yet entire countries are already relying and using this significant shift in paradigm to use and move their funds more efficiently, robbing fee-grubbing monsters of the likes of Western Union of a pretty penny. Will crypto’s completely rid the world of currency? It’s unlikely to expect such a drastic evolution anytime soon, but there has been records of moving towards the disappearance of physical currencies, and digitization of money, generally speaking.

What’s more important is clearly the possibilities that Blockchain open up. The most exciting development as far as I’m concerned is definitely the advent of smart contracts, a contract that would essentially self-execute on the premise of given variables between two co-contractants. Now, this just might be the silver bullet, the proverbial butterfly’s wing swing that will cause the most atmospheric movement.  This notably brings us to an era where lawyers not only have to understand and interpret legal texts, but they also need to have the ability to code it into a living, breathing entity the same way other innovators are. To me, this is potentially the most paradigm-shifting event related to cryptocurrency, as it can drastically empower our societies to evolve in ways yet unimagined.

One news event that noticeably drew fire this year in Canada was the so-called paradise-papers. So imagine that from now onwards, your money’s smart, and able to think by itself within and abiding to the criminal and fiscal systems …no doubt, a potentially game-changing thought.

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