Photo by Michelle Spollen

Back in April, a friend and I had met up to grab smoothies at a café before going on a lockdown walk.

We each ordered, and I pulled out my debit card to pay. “Sorry, cash only,” said the woman behind the counter. I stared blankly at her, then my friend. “I don’t have any cash,” I said; my friend confirmed that she didn’t either. We apologized to the woman, then made our way to another café that took cards.

Even before the pandemic, Canada had been trending toward becoming a cash-free society: cash transactions have been declining steadily since 2011, when contactless debit and credit (i.e. tap) first gained popularity. While two-thirds of Canadians reported using contactless credit or debit in 2018, 90 percent of unbanked people (meaning those who have no relationship to a bank) report using cash.

Since the start of the pandemic, many businesses started banning cash transactions due to concerns about it being a nesting ground for the COVID-19 virus. A new report by FIS Global, an international FinTech company that uses technology to better engage in financial markets, states that since the COVID-19 pandemic began, cash transactions have declined by more than half. It also states that FIS Global expects cash to be used for only four percent of in-store payments by 2024.

It seems like very few banked people I know use cash these days. The friend that I had been walking with said she hadn’t taken cash out of an ATM since March 2020, before the pandemic—something I realized was true for me too, after thinking about it.

With what seems like the imminent death of cash, sped up by the COVID-19 pandemic, I wonder if the things we give cash to, being mainly small businesses and each other, will also disappear. As some of us adapt, who might get left behind?

The history of widespread cash use is a relatively short one. Standardized currency was first implemented in some regions of the world in the Axial Age, from 800 to 300 BCE, then again after periods of disuse in East Asia and Europe during the 15th century. Before its employment, people would use whatever was relatively abundant around them as a surrogate, like metal nails or cod, or would run up personal credits with each other’s businesses.

The second attempt to introduce a mass standardized currency coincided with the advent of capitalism in the 16th century. Adam Smith, a prominent economist of the 18th century, believed that it would be advantageous for a country to bring everyday transactions into a uniform currency, and to abandon the practice of mercantilism, which involved the crown accumulating as much bullion (gold or silver, before coining) as it could.

As the colonial exploits of Spain and Portugal brought massive amounts of silver into the European economy, it became more possible to regulate currency, and to remunerate everyone with the same reward. Near the same time, standardized paper money, backed by bullion, became more common, and was another means to regulate transactions.

In the 18th and 19th centuries, central banks increasingly assumed control of printing paper money.
In Canada, Indigenous people had longstanding practices of trading, using items of copper, precious metals, and furs as the basis of a currency. Early settlers used a variety of items as currency, including playing cards with royal stamps, French and Spanish silver coins, the British pound, Nova Scotian money (a currency used in Nova Scotia until 1871), American money and “army bills,” before a standardized Canadian currency eventually became more circulated in the decades after confederation.

The many types of currencies meant that money had many forms up until the 20th century. Money then became pretty standardized, with cash as the main method of payment, until two new forms of payment were introduced in Canada: credit in 1968 and debit in 1988. It took a while for debit to catch on, though, and it wasn’t until 1994 that it was offered by all banks and accepted by retailers in every province.
By 2009, however, cash accounted for only 54 percent of transactions, and this dropped to 33 percent by 2017.

The question then is, who uses cash these days? In the U.S., 55 percent of small businesses don’t accept credit cards. In a study conducted in Canada in 2008, 93 percent of businesses accepted debit, while 92 percent accepted credit, and all accepted cash.

Many small businesses prefer cash because they don’t incur processing surcharges. Salon SLiJ, a longtime hairdressing salon in Montreal, used to accept cash and e-transfers but began accepting only e-transfers during the waves of the COVID-19 pandemic. Oleg, the manager of the salon, who prefers to go by first name only, says that, like many salons through the pandemic, “our sales were down more than fifty percent.”

Nikhil Tangirala, an urban planner who lives in Montreal, says that he stopped using cash during the pandemic due to hygiene reasons. “I don’t use much cash anyway, but I definitely began using less during COVID,” he says. “I stopped going to my local depanneur,” which is cash-predominant and accepts debit with surcharges, he adds.

Beyond small businesses, those who predominantly use cash tend to be those on the lower end of the socio-economic scale. In Canada, three percent of Canadians, the equivalent of over one million people, are unbanked and 15 percent of Canadians, or nearly five million people, are underbanked, meaning that they have no or limited access to credit and debit for a variety of reasons, such as having a poor credit score or living in a location underserviced by banks. Correspondingly, proportional to those who are unbanked or underbanked, 15 percent of Canadians report being heavy cash users.

Étienne, who prefers to go by first name only, is an unbanked person living in Montreal who is also unhoused. His primary income is obtained through asking people on the streets for money. “It was tough, it was really tough,” Étienne says, in reference to his income during the pandemic. “It’s been tough now too, but it’s been better since COVID … More and more people use debit cards now instead of cash … they say ‘sorry, I only have debit.’”

As of 2019, cash transactions accounted for 21 percent of all transaction volume, and 80 percent of Canadians reported making at least one cash transaction per week. Of those 80 percent, over half reported giving cash to people (rather than using it for purchases) through the week.

As cash is increasingly fading out, a new player in the game, cryptocurrency, has been entering circulation, digital coin by digital coin. Cryptocurrencies, such as Bitcoin, have no physical form at all and can only be used for online transactions, which are processed in a decentralized fashion by brokers who cash in on every trade. Cryptocurrencies typically have finite quantities of money which ensures that the currency doesn’t lose value. This differs from physical currencies, which are protected by interest rates.

The latest figures available on cryptocurrency usage in Canada are from 2019, when it was reported that nearly four percent of Canadians were using bitcoin, and close to one percent were using the next most popular cryptocurrency, Ethereum. In 2016, 64 percent of Canadians were aware of Bitcoin, and this percentage jumped to 85 percent in 2017.

While cryptocurrency circulation is growing, increasing pressure on central banks to create their own digital currencies to facilitate transactions, in their current private form they present significant barriers to access. For one, the limited quantity of cryptocurrencies mean that they are very expensive; at the time of writing, for example, one bitcoin is equivalent to $47,784 CAD. Another major issue is that cryptocurrency transactions are expensive, with bitcoin transactions costing nearly $60 in April 2021.

Cryptocurrencies also are also uniquely digital currencies, meaning that they are again reserved for those who choose or are able to process electronic payments. Even though there were nearly 900 Bitcoin ATMs in Canada as of 2020, these only service people who want to trade in physical currency for bitcoin, not the other way around.

Professor Matt Tiessen researches digital economy at Ryerson University. He thinks that cryptocurrencies are on the rise because they can potentially circulate money quicker. “Money likes to move,” he says, “and the liquidity of cryptocurrencies permits that.” At the same time, he agrees that the cost and means of processing private cryptocurrencies present significant barriers of access. “It’s prohibitive,” he says.
Tiessen is wary, however, of the concept of a central bank-produced digital currency, thinking that it could create significant and novel annexations of economic control. “[A national cryptocurrency] would create a system of surveillance and power,” Tiessen says. “Cash just sits around.”

“Part of the allure for government in creating a national cryptocurrency would be that it could be quickly distributed, and then also expire, which would ensure that it was always being spent.” (This comes up while he is speaking about a potential Universal Basic Income issued by the government.) A national digital currency could then side-step some of the barriers to access of private cryptocurrencies, but could also reduce autonomy. “It could limit your financial freedom,” Tiessen says.

As we slowly transition out of the COVID-19 pandemic, into a version of life that involves touching, hugging, filtering between stores and homes, and feeling near to the people and things we care about, where will we go with cash? Back before the loonie, we had lots of different forms of money, but these had widespread circulation within localized communities, and, within these communities, had relative accessibility, despite general inequality.

Contactless tap might run in the same vein of magic as buying physical goods with invisible currency, or of “mining” intangible bounty. Cash, though, links us to a current, a common denominator, of which we are all a part.

In the 1951 animated film Alice in Wonderland, Alice was trying to find a party when she fell down the rabbit hole. Perhaps it’s no surprise, then, that this has become the favourite cliché for people struggling to explain what it’s like to enter the disorienting world of Bitcoin.

We’ve all heard stories about the mad crypto-party, and we’ve likely heard them from a glint-eyed friend, urgently trying to communicate why Bitcoin, the world’s first decentralized cryptocurrency, and its underlying blockchain technology are so important.

Bitcoin is digital money that solves the problems of reproducibility and security. You can’t copy-paste coins, save multiple versions, or make counterfeits. It’s generated by a computer program, not a government-backed bank. The program gives out bitcoins to people as a reward for using their computer processing power to solve the difficult math problems, or cryptography, that make Bitcoin virtually impossible to hack. The more secure Bitcoin is, the more people use it; the more valuable it is, the more incentive there is to secure it. Eventually, the computer program will stop generating new bitcoins. The finite supply is one reason why it has become so expensive, like gold. By all accounts, Bitcoin breeds obsession. And if you do find yourself tumbling down the rabbit hole of hype, you’ll quickly get the terrible feeling that what the rabbit told Alice was right: “I’m late.”

Consider the following: If you invested $100 in Bitcoin on June 1, 2011, the day gossip blog Gawker made the then-still-infant cryptocurrency semi-famous with its article on Silk Road—the notorious dark-web marketplace where early adopters could use their bitcoins, albeit mostly for drugs—your investment would be worth nearly $85,000 USD (at the time of writing). If you got in a year earlier, it would be $17 million. Feel that pang in your chest? It’s called “Fear of Missing Out,” and a great many people have been experiencing it. Binance, the world’s most active cryptocurrency exchange, is adding as many as 240,000 new users an hour.

The cryptocurrency market is frequently compared to the dot-com bubble in the late 1990s that eventually burst. The analogy has some merit, but blowing off cryptocurrency entirely because the market is overheated would be like rejecting the internet because a few hare-brained websites didn’t make any money back when people were still figuring out how to use email. The current speculative frenzy will thrill some and repel others. But the problem isn’t that it engenders greed or attracts scams. Instead, fevered speculation is obscuring and possibly hindering the true potential of blockchain technology to shift the balance of power from large institutions to individuals across many sectors of society.

***

My experience falling down the blockchain rabbit hole for the first time in mid-December 2017 was an anxious, emotionally exhausting affair. I decided to buy a few hundred dollars’ worth of bitcoins and leave it at that—not a big bet, but at least I’d catch a draft if the price kept skyrocketing, as it had started to do in November. (The price has since experienced what investors call a “massive correction,” falling all the way back down to where it was then.) A few hours after the initial purchase, I invested more. Within a day, I had shoved an uncomfortable chunk of my savings into the digital currency. Retirement solved.

Anyone who’s sampled the chaotic crypto-markets knows what came next: “Fear, Uncertainty, and Doubt,” or FUD in the vernacular of the movement. I encountered a lot of bearish voices, all of them huffing and puffing about the bubble. The price of Bitcoin is floating on hot air, they growled. It could pop at any minute. So in a panic, I sold it all.

Even with the accumulated value of my labour restored safely to Canadian dollars, I was already deep into Wonderland, for better or worse. I wanted to know more, but so-called crypto experts online just made me uncertain and confused.

I needed someone sensible to show me around. Jessie Cortes is a 33-year-old Toronto-based “crypto-consultant” who’s been day-trading cryptocurrencies full-time since last summer. When we meet in early January, Cortes wears a crisp haircut and stylish wireframe glasses. He gently shuts his chrome MacBook as we begin to talk, but he keeps an eye on the steady stream of messages pinging on his phone, from fellow “scalpers” (those who buy and sell on a minute-by-minute basis) on crypto forums and online discussion groups. He absorbs these updates seamlessly while he overviews the crypto-landscape and the various ways to profit. “I help people find ways to make money in this game,” he explains.

To most people, cryptocurrencies still seem like a forbidding fringe technology, but early adopters like Cortes are now well-established and ready for business. A new generation of entrepreneurs is emerging, and they’re all trying to catch the wave of mainstream adoption before it crests. “The goal right now is just to get as many people as possible to participate and understand what’s going on,” says Cortes.

Cortes will set you up with a wallet and an exchange, teach you different trading styles, offer tips and advice about the ecosystem, or help you code a bot to do it all automatically. He’ll even help you set up a miniature mining operation on a spare computer, through which you can earn a couple bucks a day. Mining, or “proof-of-work,” is one of the key tools that makes blockchain technology effective. The blockchain is an unchangeable record of transactions within a network. Usually it’s referred to as an immutable ledger. The ledger is distributed across the network, so it’s public—like a spreadsheet that everyone can see. Everyone can add to the spreadsheet by making a transaction, such as sending bitcoins, but no one can change an entry once it’s been made (not even the person who made it). Mining is the process whereby participants in the network are incentivized to secure the ledger. Miners are paid in bitcoins to make Bitcoin safe.

If you remove all the steps, you could say that blockchain mining turns electricity into currency. That’s why large-scale mining operations have attached themselves to coal plants in China, and Quebec is trying to sell off its excess hydro energy to crypto miners. Cortes helps individuals join mining pools, which amalgamate their collective computing power and divide the profits among their members.

But don’t try to hire Cortes to manage your portfolio; he’s not interested. The whole point is that people are individually engaged and empowered to do what they want with their currency, he says. “You have to look at yourself as a bank.”

That’s not a metaphor. What is a bank if not a place that holds your money? If you want to move your money somewhere—to a family member in another country, to a portfolio manager, or to your own purse from an ATM—you have to ask the bank, and they might charge a fee for their trouble. But blockchain technology obviates the need for a bank—you can hold onto your money yourself with perfect security, and send it to whoever you want without asking.

You have every reason to be skeptical when you hear a promise of perfect digital security, but that’s because until now, data was always kept in centralized servers surrounded by firewalls. If the data is valuable enough, it’s basically inevitable that some hacker will find a way in, as countless breaches— from credit reporting agency Equifax’s massive leak of information for 143 million people, to a Yahoo breach affecting three billion accounts—have proven.

The blockchain doesn’t keep the transaction data on a particular set of servers that hackers might gain access to. Instead, it decentralizes the record of transactions, storing it everywhere for all to see while keeping your identity and your crypto-wallet safe. Even if a hacker managed to perform the virtually impossible task of unravelling the cryptography to change one instance of the ledger, such that someone else’s bitcoins transferred to their own wallet rather than the intended wallet, they’d still have to perform the same feat on all the other versions of the ledger, all at the same time. Instead of robbing the bank’s vault, they’d have to rob every house at once. People who believe in cryptocurrencies are those who accept the principle that blockchains are so secure, they extinguish the need to trust powerful institutions to keep the books.

Maybe that doesn’t sound fun. For Cortes, it is. He possesses the two necessary attributes to excel at crypto-trading: a do-it-yourself approach to tech and a gambler’s flair for risk. He uses apps and games to play around with stocks, though primarily with fake money. But he’s also into online gambling, and as an amateur boxer, he likes to bet on matches. Through his 20s, Cortes made his income independently as a DJ and Airbnb host. Now he lives inside the crypto-universe, reading whitepapers about new alternative currencies, scanning for tips on different forums, and watching the price charts rise and fall. It’s profitable, but it’s also a full-time job. The price of agency is effort.

***

The blockchain revolution isn’t about how we exchange money, but how we exchange value. So-called tokenized ecosystems may be the new marketplaces for personal goods and resources—such as the spare storage space on your laptop, or even your time, energy, thoughts, and attention. Is your art valuable? Or the energy from the solar panel on your roof? Tokenized ecosystems are the decentralized networks that will enable people to trade independently on the value they create.

Consider Steemit, a decentralized social network that runs on blockchain software. Steemit rewards people for contributing and curating content by paying them with its own digital assets, some of which are then spent on other creators within the ecosystem as tips, and some which can be traded for other currencies.

At the time of publication, one Steem Dollar was valued at $3.84 USD, and some people are getting better returns for their posts than many online publishers pay for articles. Steemit generates a system of value for people who invest in the network through their effort and talents, and that system touches other systems of value, like Bitcoin or dollars, or a token from another ecosystem.

For the true believer, these blockchain-based decentralized apps—ones with their own tokenized ecosystems—will soon overtake and replace the apps we currently use to relate to each other online.

Will Salmon is a self-described “blockchain evangelist.” A slender man in his forties with thick facial stubble, he runs a meet-up six days a week at 7:30 a.m. at the Depanneur Café in Montreal. The group is spiritedly titled, “Blockchain Coffee: Be the Change You Wish to See in The World,” and it’s meant to be a welcoming spot for newbies trying to make sense of the tech. The curious should seek out the tennis ball-sized globe perched on a saucer, with the words “collective brain” scrawled in sharpie over the Pacific Ocean. There you’ll find Salmon, scribbling in a thick notebook and ready to explain everything in his strong Parisian accent.

Salmon used to work for an accounting software company in Ireland, where he had the opportunity to study blockchain as a potential solution early on. After researching the technology at length, he was convinced that it would bring massive disruption to society. So, four years ago, he took a leap of faith. He quit his job and devoted himself full-time to the revolution. “For me, it’s the beginning of the 21st century,” he says.

But Salmon is anxious about the way that blockchain tech has inspired a gambling culture. When he first began educating people about the tech, few even knew what it was, and those who’d heard of Bitcoin were mostly skeptical. Now, he says that the old men in his neighbourhood talk to him about alternative cryptocurrencies like they’re discussing race horses. Salmon realized that he didn’t want to obsess about prices or treat the blockchain like a get-rich-quick scheme, so he sold all of his bitcoins a few years ago.

Bitcoin has made plenty of early investors into millionaires, but today Salmon freely admits that he’s broke, though he prefers to say that he has “the luxury to think about money outside the box.” When he’s not organizing meet-ups, he’s working at the Depanneur Café.

While people like Cortes make blockchain enthusiasm look suave, Salmon plays the part of the Mad Hatter. In conversation, he stitches together futurist postulations and blockchain hypotheses with dizzying speed. Instead of hustling on the cryptocurrency exchanges, Salmon focuses on networking within Montreal’s crypto community as he searches for other true believers who share his long-term outlook. It’s not this wave of blockchain adoption Salmon wants to catch, the one that’s supposed to do to banks what email did to fax machines; it’s the next wave he’s watching, when decentralized apps take over everything else.

For example, Salmon is anticipating the day when autonomous cars relieve traffic congestion, liberating the streets for more public use. Into this imminent future Salmon wants to launch a tokenized ecosystem called Fitcoin, similar to an initiative founded in Austin, Texas. Just as Bitcoin rewards miners with bitcoins and Steemit rewards engaged community members with steem, Salmon wants the city of Montreal to reward people with Fitcoins to, say, use public bike transit. These Fitcoins could then be redeemed for city services, like at the library, or traded for other cryptocurrency. Salmon believes tokenized ecosystems enable win-win scenarios, where people are incentivized to be healthier and the burden on health care is thus diminished.

If this or similar schemes ever come into effect, life will feel a lot more like a video game, with everyone speeding around picking up coins. But what about people with different abilities? Will Fitcoin adjust its parameters for those in motorized wheelchairs, or will they excel in some other tokenized ecosystem? Needless to say, there isn’t a cryptoutopia ahead.

The blockchain isn’t a panacea, but it could redefine ownership. Your bike to work would be yours in a whole new way if you could buy something with it.

***

Whether Salmon ever manages to convince the city to invest in his vision, others are looking to blockchain technology to solve even bigger problems. Laurent Lamothe was the prime minister of Haiti from May 2012 to December 2014, while the country was still recovering from the 7.0-magnitude earthquake that struck near the nation’s capital Port-au-Prince on January 12, 2010. He’d just returned to his home in Florida the night before the earthquake struck, and he watched the images of the devastation on TV along with the rest of the world.

“I lost a lot of family members and friends,” he told me over video chat, pacing around his sunny Miami home. “A quarter of a million people passed away. It was the most difficult experience of my life, seeing the tragedies and horror stories from every single family in the country.”

One year after the earthquake, popular Haitian performer Michel Martelly was elected president and named Lamothe his adviser, making him responsible for the reconstruction effort. Lamothe’s responsibilities included helping coordinate the international aid effort and collaborating with groups like the American Red Cross, which had received nearly half a billion dollars in donations earmarked for Haiti, more than any other organization. But reporting in 2015 by ProPublica and NPR suggested that very little of that money went to directly helping Haitians. For example, the Red Cross had promised to house 130,000, but five years later, only six permanent homes had been built. (The Red Cross disputes this reporting, and points to investments in hospitals and a wastewater treatment plant as some examples of how that money has made an impact.)

Although Lamothe has publicly praised the Red Cross’s efforts in Haiti, he also criticizes aid organization’s lack of transparency during the crisis: “When we said we wanted to know [where their funds were to be spent], to discuss it and have shared priorities, they told us that everything was spent. But that did not translate into the streets. We didn’t really see anything that happened with that money.”

The same year the Red Cross’s work in Haiti was exposed to public scrutiny, Lamothe learned that blockchain technology could solve some of Haiti’s most pressing problems. Lamothe first heard about the blockchain at a special conference hosted by Richard Branson, Virgin’s grinning CEO, on his private island. “That’s when I discovered the power of the blockchain and its potential to change the world as we know it,” he says.

Take international aid. A new platform called Alice uses blockchain technology to help charities and social enterprises operate transparently. With a secure decentralized ledger, it becomes possible to publicly track where every donation goes and how every dollar is spent. But that’s not the only way that blockchain tech could help Haiti and countries like it.

Buying and selling property in Haiti can be hopelessly complex. One of the challenges that hampered the Red Cross’s efforts was the country’s dysfunctional land title system. Haiti’s National Land Registry Office has only registered a tiny fraction of the country’s more than 17,200 square kilometres, while other agencies keep their own separate records. Land disputes have interfered with and ultimately defeated many reconstruction and development projects. After the earthquake, the situation was even worse. “Everything was lost,” says Lamothe. “All the records were held in a single office, and that office collapsed.” Blockchain technology offers a secure, paperless method of recording property transactions that virtually eliminates the possibility of dispute. Sweden and Russia are already in the advanced stages of implementing land registry systems on their own private blockchains.

Lamothe is advocating for blockchain solutions in other areas of governance as well. He believes blockchain technology could bring much-needed transparency and accessibility to elections, and platforms like Follow My Vote and Polys have already launched blockchain applications to disrupt this space. Whether it’s voting, financial inclusion, or charitable donations, Lamothe hopes that blockchain developers will turn their gaze to Haiti as “a good test case.”

***

When Alice finally found the mad tea party in Wonderland, she couldn’t understand what anyone was talking about. The world of blockchain tech can feel equally baffling, but one can always find a candid perspective among those who are basing their approach on betting odds. “It’s the purest democracy,” says Cortes. “Wouldn’t you want to invest $500 or $1,000 in that and see how it goes?”