THE CHEAT SHEET. Drachma dilemma

This is about the big Greek default, isn’t it? Yes, it’s got the whole world in a tizzy. Will Greece or won’t Greece?

But they’re refusing to pay, aren’t they? Greece owes international creditors about €242.8 billion, according to Reuters. This includes lenders such as the IMF, the European Central Bank, other Euro Zone governments (like Germany) and private lenders.

And they’re not going to cough up. As you must know by now, they don’t have the resources to. Greece’s multi-year bailout expired on Tuesday, the same day it faced a deadline to repay a €1.6 billion loan to the IMF. Also hanging fire is Greece’s continued existence in the Euro Zone. Everybody’s waiting for Sunday’s referendum to see which way Greeks go.

What’s the referendum on? Greek Prime Minister Alexis Tsipras has called a nation-wide referendum where citizens will be asked whether they want to continue on the path of more austerity (as the lenders demand) or not. Creditors have warned that if Greeks vote against their proposals, the country might be forced to exit the Euro Zone.

Which it doesn’t want. Tsipras would probably like his fellow citizens to vote against the proposals and call their lenders’ bluff on a possible forced exit.

So what’s going on meanwhile? Well, for starters, the local banks and stock markets are shut. Early this week, news readers around the world woke up to pictures of Greeks queuing outside ATMs to draw cash. Withdrawals have been limited to €60 while transferring money abroad has been banned altogether. Capital controls are firmly in place.

So if they do exit the Euro Zone, what happens? No one knows yet, since this has never happened before.

Do they return to the old currency, drachma? Your guess is as good as anybody else’s.

A new currency then? Bitcoin.

The computer code? The official term is cryptocurrency. A video doing the rounds on the internet has Greek’s finance minister Yanis Varoufakis suggesting (before he became the finance minister, it seems) that the country should switch from the euro to “an alternative” to secure Greek democracy. In a blog post, he also proposed a parallel currency called the future tax-coin, with the same underlying principles as a bitcoin.

I’ll need a bitcoin refresher, please. A bitcoin is a digital currency mined by making computers solve complex mathematical problems. Alternatively, you can buy it from people who already own it, off an exchange. The currency is not backed by any country. The way bitcoins have been programmed, mathematically no more than 21 million units can be produced. This self-regulation is meant to paper over inflationary effects, though whether this actually works as intended, we still don’t know.

So was Varoufakis joking? In all likelihood, he probably wasn’t being serious. But that hasn’t stopped the online world from linking Greek woes to the sudden spike in the value of bitcoins. Tony Gallippi, the co-founder of bitcoin payment processor Bitpay, expects bitcoin to rise to between $610 and $1,250 if Greece exits the Euro Zone. On Monday, the currency was worth $250. Bitcoin payment processors have said enquiries from Greeks have shot up in the last few months, all wanting to know how exactly this bitcoin thing works.

Ah, salvation then? Not really. To buy bitcoin, you need to wire money through a bank account. Unfortunately, Greek banking services are currently out of order. But the conspirators carry on.

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