Black cubes, cryptographic puzzles and dizzying jargon: a day at Toronto’s first Bitcoin expo
The strange future of electronic money was in Toronto over the weekend at Canada’s first-ever Bitcoin expo. A handful of companies from across North America were showing off products they hope will take the fledgling currency mainstream. It’s somehow fitting, however, that the show happened two stories underground, in the cavernous depths of the Metro Toronto Convention Centre.
Under Bremner Boulevard, almost all of the roughly 300 delegates at the expo were male and between the ages of 20 and 40. Some wore crisp suits while others sported impressively unkempt beards and flip-flops. The company reps on the little expo floor had the slick, confident manner of Apple Store geniuses. They talked about their products using a dizzying array of jargon. In the background, the music jumped between thumping techno and eerie ambient pieces.
For those who don’t know about it already, Bitcoin can be thought of as the currency equivalent of email. Think about the bureaucracy email helps users circumvent: instead of buying a stamp from a corner store and using the Canada Post distribution network, an email account lets a user send an electronic letter directly to its intended recipient for free, cutting out the middle man. It’s a crude example, but essentially that’s what Bitcoin does for its users. It’s an electronic way of handing someone cash.
Money in any denomination can be sent directly between two people without it needing to pass through a bank, where it would be subject to fees and charges. For merchants, that means never having to trade a cut for the privilege of accepting credit-card payments. Bitcoin can be cashed out for regular currency or stored in an online wallet.
Near the back wall of the show floor, artist Mark Kellett was selling paintings and prints inspired by (and priced in) the electronic currency. In one of his pieces, the moon over downtown Toronto has been replaced by an outsized 3D representation of a Bitcoin. “I carved the moon out of a circular piece of plywood then I gold-leafed it,” he said.
Close by, another company, Ethereum, has an all-black booth and a diamond logo that wouldn’t look out of place in a world dreamt up by Philip K. Dick. The company’s programming language, which is based on the Bitcoin concept, promises to help developers build applications that will let users trade practically anything—mortgages, web domain names, intellectual property—without a central exchange. The system operates on a peer-to-peer basis, like downloading a movie with BitTorrent.
“We don’t know what people are going to come up with,” spokesman Stephan Tual said, excitedly. “They might come up with things we haven’t even thought of.”
Most people choose to buy Bitcoins from a broker, and there are special ATMs—one of which has already debuted in Toronto—that accept Canadian money and print out the digital currency. But that’s not the only way of becoming a cryptocurrency tycoon.
In the back corner, a black cube about the size of a fist silently “mined” Bitcoins for its owner. This is how new bitcurrency is made and doled out to the market. The machine, built by Butterfly Labs, uses all of its considerable computing power to attempt cryptographic puzzles set by the Bitcoin network. A correct answer yields a reward of 25 bitcoins, about $11,600 Canadian at time of writing. Because Bitcoin mining is a slow and resource-intensive process, devices mine alone; even the little box, which displays its yield on the screen of a tablet, works in a pool and splits its winnings.
Bitcoin still has a long way to go before it gains widespread acceptance. Right now, there are only a handful of businesses in Toronto that will take the currency, among them Smoke Bourbon BBQ on Harbord, the Downtown Dental Hygiene Clinic on Spadina, and Ark Army Surplus near Downsview. Alas, even the sushi stand in the middle of the expo hadn’t signed up. “I still don’t understand it,” said one of the workers.
Wild market fluctuations are one of the reasons people are hesitant to trade their Canadian dollars for Bitcoin. In April 2013, the currency dropped half its value in six hours amid trading delays at Mt. Gox, a Tokyo-based exchange. A similar crash occurred a few months later in December.
As if to illustrate the point, outside the entrance to the expo floor, a little blower kept a giant inflatable balloon in the shape of a Bitcoin logo full of air. Every so often, it stopped, and the coin began to deflate and collapse in on itself. At the last second, the machine would spring back to life, rescuing the symbol of the fledgling currency from flopping to the ground.