From niche technology to mainstream market

The 2008 financial crisis was the most severe economic disaster since the Great Depression, wreaking havoc on big and small investors alike. It first hit headlines with the collapse of Lehman Brothers, one of the largest investment banks in the United States. While economies have largely recovered, many people never regained their trust in the institutions that failed them.

Boulianne says this disillusionment, paired with widespread internet adoption, has elevated cryptocurrencies from a niche technology to a thriving market that topped $3 trillion USD in November 2021. They have also branched into other assets that don’t exist in traditional finance, such as the digital art of non-fungible tokens (NFTs).

The genesis of blockchain-based currency can be traced to a nine-page paper published in 2008 by the mysterious Satoshi Nakamoto, the pseudonym of the person or people who created Bitcoin.

“The initial intention of cryptocurrency was not to replace the American or Canadian dollar — it was an experiment,” says Boulianne.

“It became a revolution for those who disagree with the established financial system.” 

Bitcoin was issued in 2009 as the world’s first digital currency. As of February 2022, more than 10,000 cryptocurrencies have been created, often by companies seeking to raise money through initial coin offerings (ICOs).

Boulianne, along with Melissa Fortin, professor at Université du Québec à Montréal, was the first researcher to study how Montreal-based Impak Finance raised money through a legal ICO with Quebec’s financial regulators providing a fast-tracked “sandbox” system.

“The old, regulated system was very involved, very complicated and took a lot of time. But if you do it unregulated, you could go to jail,” notes Boulianne. “What our research suggests is that there is a possibility to make it legal and work with financial regulators.”

No longer science fiction

Jeremy Clark, associate professor at the Concordia Institute for Information Systems Engineering, has a background in studying cryptography for voting systems and authored one of the earliest academic papers on Bitcoin. He also holds the NSERC/Raymond Chabot Grant Thornton/Catallaxy Industrial Research Chair in Blockchain Technologies.

“[Raymond Chabot Grant Thornton] is an auditing firm, so customers come to them holding cryptocurrency and wanting a financial audit,” he says.

“Cryptocurrencies aren’t science fiction anymore. There are real companies in Quebec that have them on their balance sheet.”

In just over a decade, a single Bitcoin went from being worth a slice of pizza, to being worth a new Tesla.

Clark says that while it is hard to speculate on the future of the cryptocurrency landscape, the astronomical valuations of some blockchain-based currencies do remind him of the dot-com bubble — which eventually popped in 2001.

“There were all sorts of legitimate internet companies that are still successful and here today. There are also a lot that aren’t around anymore.”

Cash, card or crypto?

Many aspects of cryptocurrency still need to be ironed out before it becomes ubiquitous in everyday life.

For one, it’s slow. Mahsa Moosavi, MASc 18, is a Concordia PhD student whose research under Clark’s supervision focuses on how to securely reduce the onerous transaction times that accompany decentralized finance.

“You can’t go to a café and buy a cup of coffee with Bitcoin because it’s not practical to wait 20 minutes for a transaction to go through,” she says.

Through her research and part-time work as a software engineer at Offchain Labs, Moosavi is helping to develop security measures for order books that allow more and faster transactions at a lower fee.

“Every transaction on blockchain takes some time to be confirmed, because it has to be executed by every node in the network,” she says, referring to the computers that validate each block and transaction before adding it to the blockchain database — also known as the permanent digital ledger. “And it’s expensive because you are paying for every node to execute your transaction.

“You might get a result instantly in your account, but that’s not really what’s happening in the background.”

A new way to trade

Though crypto is still fraught with uncertainty, practitioners from all walks of life aren’t waiting for a perfect system before wholeheartedly pursuing this nascent sector.

Jason Dolgy, MBA 16, bought his first cryptocurrency in 2016, only to watch it plunge 50 per cent the next day. Rather than be deterred, Dolgy saw exciting new possibilities beyond what was available in traditional finance.

“It took a month to break even and I figured that if this volatility exists, and it is liquid, this can be the greatest transfer of wealth for my generation,” he says.

Now head of research at the Credo Ventures hedge fund, Dolgy trades in a variety of cryptocurrencies, as well as even newer financial instruments in the form of derivatives like crypto futures, options and swaps.

Jason Dolgy, MBA 16, bought his first cryptocurrency in 2016, only to watch it plunge 50 per cent the next day. Rather than be deterred, Dolgy saw exciting new possibilities beyond what was available in traditional finance.

“It took a month to break even and I figured that if this volatility exists, and it is liquid, this can be the greatest transfer of wealth for my generation,” he says.

Now head of research at the Credo Ventures hedge fund, Dolgy trades in a variety of cryptocurrencies, as well as even newer financial instruments in the form of derivatives like crypto futures, options and swaps.

“We are able to take advantage of the volatility on both sides of the market. In my opinion, crypto moves at four times the speed of traditional markets, and as such requires an active approach.

“I don’t think Bitcoin will ever disappear. Not all [blockchain-based assets] will survive, but the ones that do will become part of most people’s lives.”

One sign of that potential staying power? In February 2022, Warren Buffett — Berkshire Hathaway’s legendary CEO and the world’s most famous crypto-skeptic — invested $1 billion in a Brazil-based digital bank focused on crypto.

People and passion

As with any growing industry, these trail-blazing enterprises constantly seek new talent with the right skills.

Nako Mbelle, BA 95, was already actively recruiting for the technology and finance sector as founder of FinTech Recruiters when, in 2017, a client offered to pay in Bitcoin.

“I realized this is a legit industry with people working at companies. It’s not just for drug dealers,” she says.

Mbelle reports that around 90 per cent of blockchain sector job-seekers are computer engineers by training, even if that experience is in traditional common programming languages. The rest, she says, work in marketing, business development and even content for social media.

“A lot of the skills are highly transferable and [blockchain sector workers] don’t need unique blockchain skills or experience,” she says.

“The best people are those who are entrepreneurial and can pivot very easily.”

Fauve Altman, BA 16, who has a background in public affairs, was drawn to blockchain’s ability to break down barriers and bring people together.

“I saw crypto as something that needed people with a soft-skill approach in a space that was initially very hard tech,” says Altman, who works as a blockchain and cryptocurrency consultant and has presented at ETHDenver and other major conferences.

Mbelle says she has also seen cryptocurrency’s ability to offer a more even playing field for well-paying jobs than traditional finance.

“I interview people in Nigeria, Russia or Brazil who probably would not have the same opportunities in any other industry,” she says.

“I’ve come across a 17-year-old who is self-taught. While the COVID-19 pandemic was detrimental to a lot of young people, there are also kids who learned how to code and immersed themselves in this ecosystem.”

This socio-technical experiment has grown so fast that it’s easy to forget that cryptocurrency is little more than a decade old. The technology and its users will mature and evolve, but whatever their fate, they have already transformed not just the global financial system, but the nature of money itself.

“Canada has an unprecedented opportunity for global conservation leadership in the 21st century,” affirms Fraser. “We can do this by maintaining the country’s relatively high proportion of intact natural areas and by doing it the right way — by fostering Indigenous-led conservation.”