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Why This Guide Exists

���ճԹϺ��� may feel complicated when you are first getting started. Headlines swing between hype and skepticism, and prices can move quickly. This guide is here to give Canadians a plain-language starting point on what crypto is, how it works, and what to watch out for. It is not investment advice. It is simply to help you stay informed, especially as the terminology can sometimes feel like learning a new language.

This Q4 2025 edition of Newton Learn reflects the most current regulatory context, Canadian developments, and terminology updates. We publish refreshed guides regularly to help Canadians stay informed as the digital asset landscape evolves.

Digital assets can be used as a way to exchange value online. Blockchains make peer-to-peer transactions possible by letting them be recorded across a network of participants. Traditional finance puts one group, like a bank, in charge of the ledger. Decentralized finance (DeFi) spreads that record across a network of computers.

Most blockchains stay open to the public. People can join, secure the system, or create new applications. Others are closed. Permissioned or consortium blockchains restrict access to chosen participants, often in industries that want more oversight.

Key crypto features include:

• Decentralization: Most cryptocurrencies are not controlled by a single authority, enhancing resilience and user control.
  
• Transparency: Public blockchains allow anyone to verify transactions, fostering trust and real-time auditability.
  
• Scarcity: Some cryptocurrencies have predefined supply limits, contributing to their value proposition.
  
• Divisibility: Many cryptocurrencies can be divided into smaller units, enabling participation with modest amounts.
  
• Open Source: Most permissionless blockchains publish their code, allowing developers to build directly on the network’s base layer.

A ledger is a list of transactions for accounting and record-keeping. Whether carved into clay tablets, kept in a bank’s books, or recorded on a blockchain, ledgers have always been at the core of how humans track value.

A distributed ledger is essentially a database that stores data about transactions across a network. They can be public or private and don’t always involve cryptocurrency. A blockchain is an example of a distributed ledger.

Think of it like a shared record book that lives online. Most blockchains keep the pages open so anyone can read them, which makes the system transparent. Others close the book to everyone except approved members. In either case, transactions still have to be checked by independent computers, called nodes, that agree on what gets added.

A node is a computer or participant on a blockchain network that helps keep the system secure. Nodes maintain a full copy of the blockchain and communicate with other nodes to stay up to date. They also verify that any block being added meets the network’s rules.

Layer-1 refers to the base layer of a blockchain. The Bitcoin, Litecoin, and Ethereum networks all exist as layer-1 blockchains. Layer-1s are platforms which smart contracts and other services can be built upon. 

Used together with a layer-1 blockchain, layer-2 is a scaling solution that enables better transaction throughput while maintaining the security of the base layer-1 blockchain. Layer-2s are built on top of a layer-1 blockchain and aim to provide more flexibility, lower fees, and higher speed when it comes to transactions.

Bitcoin is the first to market the original layer-1 blockchain. It was launched in 2009 by an individual or possibly a group under the pseudonym Satoshi Nakamoto. After being active, chatting on early forums, Satoshi disappeared, and the wallets believed to be his (with an estimated 1 million BTC and scattered between addresses) have never been touched. This has been a critical design feature that has driven its adoption.

The network was likely launched in response to the global financial crisis and American bank bailouts. It was designed for its divisibility and scarcity; it presents a remedy to fiat money printing by central banks. This view is tied to a message embedded in Bitcoin’s first block suggesting its purpose as a capped decentralized digital currency. It reflects the intentions of early participants, not necessarily the current regulatory view.

Why Bitcoin is unique:

• Hard cap of 21 million coins.
  
• Every transaction is recorded permanently (immutability, once confirmed, it cannot be changed).
  
• Proof-of-work with thousands of independent nodes enforce the rules.

The very first block in Bitcoin’s blockchain is called the genesis block.

The sticker shock of Bitcoin’s market price can be misleading. Like a Canadian dollar that breaks into 100 cents, each Bitcoin divides into 100 million satoshis so you do not need to buy a whole coin. Holding a fraction such as 0.1 BTC or 0.01 BTC is enough to participate in the blockchain’s network, and before spending anything you can start by learning how it all works.

Fifteen years ago, an early Bitcoiner named Laszlo Hanyecz had tens of thousands of Bitcoins that he had mined and was looking for a way to actually use them. He also happened to be craving pizza. He offered 10,000 BTC in exchange for two large pizzas, marking the first known real-world purchase using crypto. Hanyecz's pizza is celebrated online every May, marking a notable moment in the timeline of digital asset payments. At today’s prices, those two pizzas would be worth approximately CAD$ 1.4 billion.

Canadians can still use cryptocurrencies to buy goods and services, even though they are not legal tender. Users should remember that crypto assets such as Bitcoin have unique features when compared against the Canadian dollar. 

In 2025, the question is often: what can’t you buy with BTC? While big box retailers still do not accept Bitcoin or other digital assets directly, you can spend your crypto at many places by using services that let you pre-purchase gift cards or load crypto-friendly credit cards.

Ethereum has a very different origin story that started when a Russian born Canadian by the name of Vitalik Buterin met co-founders Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin, together launching the chain. These names have become key opinion leaders (KOLs) in the sector. Unlike Satoshi, Vitalik remains actively involved in Ethereum. He commands substantial influence and mindshare. When he posts to social platforms or speaks at conferences, it sparks debate. This visibility gives him a kind of soft power that contrasts with Satoshi’s anonymity.  ETH is the native cryptocurrency of the Ethereum platform.

Ethereum has long been called the “world computer,” powering everything from DeFi apps to Non fungible tokens (NFTs). Leadership now sees its future as something even more foundational, a “world ledger” that safeguards ownership, value, and agreements across the globe. ETH, the network’s native token, is the economic backbone that keeps the system running. 

Ethereum takes a different path than Bitcoin. Its leadership is visible, with Vitalik Buterin still active in the community, while Bitcoin’s creator has remained anonymous and disappeared. Ethereum was built to be more than money: it runs smart contracts and decentralized apps. Unlike Bitcoin, it does not have a fixed supply cap, though upgrades now “burn” some fees to help manage supply. In 2022, Ethereum moved to proof-of-stake (PoS), cutting its energy use by more than 99 percent. Its native token, Ether (ETH), is what you need to pay for transactions and power activity on the network.

One of the reasons Bitcoin is considered valuable is the increased energy required to secure its network. Its proof-of-work model has been compared to the effort involved in mining gold or drilling for oil. Value comes from many decentralized global participants contributing resources to maintain the integrity of the distributed ledger.

Bitcoin and Ethereum lead the market by size, but they are not the only players. More than 10,000 cryptocurrencies and blockchain projects are now listed around the world.

Smart contracts embed both the terms of an agreement and the originally intended outcome directly into computer code. The code executes deterministically, carrying out the agreed terms automatically when specific conditions are met. These contracts run on blockchain networks storing data and the terms of the contract on immutable ledgers. 

With no intermediaries required to determine or confirm whether a pre-condition or requirement for a contract has been met, the code’s logic of the smart contract’s terms determines the outcome. Oracles, which are external data feeds that provide real-world information, assist in automated network execution. Once triggered through a wallet-based transaction, the result is final. 

How they work:

• Conditions are written in code
  
• When conditions are met, the contract executes automatically.
  
• Oracles feed in real-world data if needed.

Risks:

• Coding bugs or hacks.
  
• Oracle manipulation.
  
• Limited legal recognition in Canada today.

• Non-Fungible Tokens (NFTs): are digital assets that live on-chain. They often represent things like art, music, videos, or even tickets. You can view them online but unlike a painting or sculpture, you cannot hold them in your hands.
• Decentralized Autonomous Organizations (DAOs): A DAO is a blockchain-based organization governed by smart contracts and its members. There is typically no CEO or executives. Instead, for most common DAO structures, token holders vote on proposals, and if approved, the contracts execute decisions automatically.

• Decentralized Physical Infrastructure Networks (DePINs): offer a new way for people to repurpose their unused digital resources by turning them into crypto rewards. Individuals contribute physical resources such as internet bandwidth or data storage in exchange for token rewards. Instead of letting unused capacity go to waste, DePINs make it possible to redirect what already exists. This creates a more efficient and potentially regenerative approach to building decentralized infrastructure.

• Tokenized Real-World Assets (RWAs): digital versions of traditional assets such as Treasury bills, real estate, or commodities. Institutions are exploring these to improve efficiency.
• AI-focused crypto tokens: reflect the growing convergence of artificial intelligence with blockchain technology, powering use cases such as supply chain tracking, data verification, and decentralized Oracles. By merging AI with blockchain we can minimize vulnerabilities and strengthen the security of various systems. 

• Volatility: prices can swing sharply in short periods.
  
• Technology: software bugs, security breaches, or upgrade failures may cause losses. One extreme example is a 51% attack, when a single group controls more than half of a network’s computing power and can disrupt transactions.
  
• Regulation: Canadian securities regulators (CSA and CIRO) classify some tokens as securities or derivatives. Others, such as Bitcoin, are generally treated as commodities. Classifications may change as rules evolve, and investors should recognize this uncertainty.
• Rugpull: a type of scam where insiders promote a new token, build hype, then suddenly sell their holdings and drain liquidity. The token price usually collapses, leaving late investors “holding the bag.”
  
• Custodian risk: some Canadians prefer to have a custodian hold their crypto, a third party that stores assets on your behalf. While convenient, it introduces counterparty risk if that custodian fails.
  
• Quantum risk: “Q-Day” is a nickname for the hypothetical moment when a quantum computer becomes powerful enough to break the cryptography behind and other blockchains. Depending on who you ask, it’s either imminent, years away, or something that may never happen.

As you can see crypto is more than prices and headlines. It is a set of technologies experimenting with new models for money, ownership, and coordination. Today there are thousands of tokens. Some will succeed, others are destined to fail.

For beginners, the key is to start with the basics, know the risks, and ask good questions. At Newton, our goal is to support Canadians with education so they can stay informed, not influenced.