Digital Currency Crypto Curious


Despite the growing trend towards virtual currencies and goods, most of us are still in the dark about what cryptocurrency actually is, how it works and how to use it.

By Lisa Sadach featuring Justin Hartzman, CEO of Coinsmart

To level the playing field on this (potential) currency of the future, we’re addressing the most commonly asked questions about crypto and talking with Justin Hartzman, CEO of Coinsmart – Canada’s leading cryptocurrency exchange and crypto educational resource.


Let’s start with the basics. Cryptocurrency is a form of digital currency that can be used to buy things in the same way physical currency can be used and it is secured and regulated with highly specialized encryption techniques but, unlike traditional currency, it is not regulated by a bank, government or any other financial institution. To get an idea of how this works, let’s create a simple example comparing and contrasting how cryptocurrency is similar to traditional currency. With traditional currency, you are given physical money that is issued and regulated by the government. When you have this currency in hand, you can then give it to someone else in exchange for goods and services and they can then do the same thing.

With cryptocurrency, you start by receiving digital coins such as Bitcoin, Litecoin, Dogecoin or others (more on how to do that in a minute). Your coins will be stored in a kind of digital wallet where you now use it to buy things ortrade it when it changes in value.Instead of a unique piece of papercurrency, your coin is representedby a unique digital code – kind of like the serial number on physicalmoney. Once you have your digital coins in your virtual wallet, you can now use it to buy goods and services from any retailer set-up to accept cryptocurrency. Now, if you’re like most people, the first question you have is “but what is stopping someone from devaluing my coins by making multiple copies and sending them out to lots of other people?” This is known as the double spending problemof digital money. But, not to worry, there is alreadya solution to this with a digital “ledger.” Aside from “The Ledger” sounding like a superhero your accountant came up with, it is also a simple and effective way to track ownership and value of a coin.

You see, when you buy cryptocurrency, it is recorded in a ledger and it then continues to record any time you give or get the digital coin. More importantly, you also get a copy of this ledger and so does anyone else you trade with which is one of the ways the double spending problem and security issues are eliminated because everyone has a front row seat to your coin’s comings and goings. Hartzman addresses the security issues of cryptocurrencyby saying “It is safe but, as with anything, there is an element of risk. It is the same kind of risk you take walking down the street with your money or giving it to a brokerage firm to invest – there is a chance you could get robbed or the firm could invest poorly. It’s the same with crypto but, if you can work with a trusted partner, it is very safe. Providing that safety, that security and, most importantly, that trust to our customers is our top priority.”

There you have the basics, now let’s get to more of the nuts and bolts of how this system is held together.


It bears saying that there are a variety of markets for digital currency and some are safer and more stable than others. Bitcoin is the most famous coin but even being well-known has not stopped it from fluctuating wildly in value. But, we’re not here to recommend any single coin over another – finding the one that’s right for you will take some exploration. However, sites like and are two popular crypto marketplaces for you to start with. No matter the marketplace you choose, your crypto buying will start with you receiving a digital “key” which unlocks the web address for that coin. Your key is what allows you to initiate and complete transactions. Canadians have a better, safer and more user-friendly option than they did a few years ago since the advent of Coinsmart. The company was founded because CEO Hartzman saw there was a lack of options in the market and, more importantly, a lack of trust.

Coinsmart is designed to “…support both the retailer and the user to give them the most ideal experience. Everything we do here is set to uphold two very important goals: Make crypto- currency accessible and give the best experience possible. Both these and all of what we do comes down to creating trust.”


Much like your “real” money, your crypto money needs a safe home of its own in the form of a cryptocurrency wallet. There are several types of these wallets including wallets that can be stored on hardware such as a USB stick and mobile wallets. You can even receive a paper wallet from some sites. With a paper wallet, you will have two physically printed codes – 1 that you can give out in order to receive money and another private one for spending.

Hartzman recommends putting coins in cold storage, which 70% of Coinsmart users do with the help of the company’s educational resources and advisors.


Cryptocurrency, you may have noticed, is not often listed as a form of accepted payment at many of your usual retailers. In order to spend crypto directly, you will need to search out online and physical locations that have the capability to take your coins. However, you can also trade your cryptocurrency on the crypto exchange for traditional currency. Because crypto values fluctuate quite a bit, you can make (or lose) value easily and then trade for cash – somewhat similar to how stocks are traded.


The answer to this is varying around the world as the phenomena of cryptocurrency is still so new that many governments and financial institutions are unsure of how to proceed with regulations.

However, in Canada, lawmakers are largely adopting a ‘regulate-and-embrace’ approach. Unlike some other countries that are discussing heavier restrictions and potentially shutting down crypto markets entirely, Canada’s focus is mainly on ensuring money laundering is kept at bay.

According to “On Nov. 2, 2017, the Ontario Securities Commission granted regulatory relief to Toronto-based Funder, Inc. to allow Ontario’s first regulated ICO/ITO.” Earlier in 2018, the Bank of Canada experimented with block- chain (the technology used to encrypt coins and also known as ‘distributed ledger technology’), but concluded that it could not be used to run the “country’s centralized interbank payment systems” If you’re thinking “if the Bank of Canada can’t get this to work, how are smaller retailers supposed to make it happen?” then you’re not alone. However, Hartzman easily addresses this saying “it’s short- sighted to assume that because the Bank of Canada couldn’t get it to work, that it can’t work at all. Other banks are making progress, it’s just not going to happen overnight.” However, in terms of generally keeping your cryptocurrency safe, this is where blockchain technology comes in. The three- pronged security and verification process of blockchain makes it next to impossible to change entries in the “ledger.” As a Canadian-based company, Hartzman says that Coinsmart “believes in regulation and we embrace it to bring more trust to the market and the individual. We’re just playing it very safe. The reality is, when we decide to take on a coin into our exchange there is an 180-page guideline on how we govern ourselves that we need to consider.”

While these guidelines slow the process, they are what helps keep the system safe and what prevents more questionable coins from getting added to the exchange.


So, while there are plenty of measures in place to keep your crypto money safe from being duplicated, that does not mean crypto isn’t being misused in other ways. Because crypto is decentralized and anonymous, there are fewer issues stopping criminals from abusing it. This anonymity makes it easier to get away with purchases on the black market for things like stolen credit card numbers. Ransomware authors can also be more easily paid without getting caught. Those who earn cryptocurrency through crypto mining – a process of earning crypto by verifying crypto transactions – may also be vulnerable to ‘crypto jacking.’ With crypto jacking, a hacker essentially steals the use of a crypto miner’s internet connection, mining hardware and electricity. This will not create a huge loss for the miner initially, but they will essentially be working to bene t the hacker and possibly see an increase in their electricity bill as well.


The jury is still out on this one, to be honest. While Bitcoin’s wildly fluctuating value turned cryptocurrency- cy into a bit of a joke over the past year, there are still many who believe it has the potential to change the way we do business and pay for goods and services. To be sure, there are still many issues in regard to security, fluctuating value and regulation which could send crypto to the technology graveyard along with our Myspace themes and Microsoft Zunes. It could, however; become the way to democratize currency and trade in developing nations and represent the future of money as we know it. For the ultimate answer to this, only time will tell if cryptocurrency will be the thing, we use the next time we’re in the checkout line. Hartzman also sees a growing future for crypto. “I see a clear vision. It will be a very viable asset class and blockchain will play a huge part. We are still in the early adopter stage but in 2019 we willsee cryptocurrency accepted at more major retailers including Starbucks. For investors, it’s wise to hold cryptocurrency while making sure you diversify your portfolio, research and continue to talk to people who know and you will have potential to be in a very good position 5 years from now.”

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