Cryptocurrency is a virtual, digital and encrypted currency that can be used in barter transactions. It is widely believed that it can be used quite widely in the future.
Today,
cryptocurrencies attract a lot of attention from individuals to giant
companies. Cryptography is used to verify exchanges and execute this process
securely.It has no physical counterpart.
In fact, money
spent with credit cards or transferred between bank accounts are also virtual
currencies. Only system data changes in this process. Cryptocurrency has
similar working logic. However, there is no authority in this system. There is
also a different decentralized system that is not managed by the government.
This makes the system more secure.
Cryptocurrency
What is cryptology?
Cryptology is a
science of encryption. The main principle of a system is the encryption of
data. Cryptocurrencies are transferred by creating and decrypting passwords in
the environment. A wide variety of algorithms are used. At the beginning of
these are Hash functions.
History of Cryptocurrencies
Since the 90s,
when technology developed rapidly, many attempts have been made to create a
digital currency. Leading systems such as Flooz, Beenz and DigiCash have been
developed. However, problems such as fraud, financial difficulties and internal
conflicts arose due to problems in these systems. At the end of all this work,
the idea of a reliable, third-hand approach was developed.
The first
cryptocurrency, Bitcoin, was developed in early 2009 by the person or people
using the code name Satoshi Nakamoto. Although it is said to be developed by
Satoshi Nakamoto, it was shared as open source software by an unknown person or
persons. This network runs on a platform with a method similar to file sharing
platforms with end-to-end encryption.
Security of cryptocurrencies
One of the most
important problems that occur in payment systems is the possibility of spending
the same money twice. This can be avoided by using the traditional method, such
as installing a central intermediary (banks) that keeps track of transactions
made. However, this method reduces reliability because it implies the intervention of an authority that can control all capital.
However, in a
decentralized network such as Bitcoin, the transaction cannot take place
without the approval of every part of the system. Because these transactions
are made through the blockchain, every transaction is publicly visible.
All transfer
transactions are carried out by determining the amount to be sent, using the
wallet addresses of the sender and the receiver. After the exchange or shipping
transaction is verified by the sender, it must be approved by the systemConfirmation
is accomplished by miners solving a cryptographic puzzle. Once the transaction
has taken place, it cannot be undone. The possibility of hacking and attack is the biggest risk for
cryptocurrencies.
How is cryptocurrency
produced? What is cryptocurrency mining?
Cryptocurrencies
produced through a distributed system like themselves are user-based. Cryptocurrency
has a production limit. Therefore, as the amount of crypto money produced
increases, the transactions that need to be solved to produce crypto money
become more difficult.
The production
process is done by mining. Even if there is no physical mining, operations
based on the solution of mathematical problems are carried out. If you have
processor power and internet connection without being assigned by anyone, you
can undertake the mining task.
Is cryptocurrency legal?
Cryptocurrencies are legal in some countries, while
in others they are prohibited. In some countries, use and trade are expressly
permitted, while in others the legal status is still unclear or volatileThe use
of cryptocurrencies is prohibited or restricted in some countries.
According to a report by the Law Library of
Congress's Directorate of Global Legal Studies, 50 more countries have banned
cryptocurrencies. According to the report, Algeria, Bangladesh, China, Egypt,
Iraq, Morocco, Nepal, Qatar and Tunisia are among the countries that have
banned cryptocurrencies. The broadcast was first reported by Decrypt, which
reported on Bitcoin and Ethereum news. The number of countries banning
cryptocurrencies appears to have risen significantly. nine countries currently
follow a policy that makes crypto illegal.
China, the world's second largest economy, caused the
crypto markets to turn upside down with the restriction it implemented earlier
this year. While the country has been taking strides against digital assets for
years, pressure on financial institutions trading crypto and crypto mining in
May and June brought a sharp drop in the prices of cryptocurrencies.
According to data
from CoinGecko, the crypto market has reached over $2.5 trillion this year,
surpassing $3 trillion this quarter. With explosive growth, more countries are
enacting laws aimed at countering money laundering and terrorist financing, in
addition to introducing cryptocurrencies into the tax regime, the report said.
The United
States, which is still struggling on how best to regulate the market, has both
tax law and anti-money laundering and terrorist financing laws, the report
pointed out.
Cryptocurrency advantages and disadvantages
The fact that the central authority does not have the authority to set the
rules in cryptocurrencies is among the most important advantages of
cryptocurrencies. Those who have a device that can access the Internet can
create a passbook and use their account whenever and wherever they want. Since
cryptocurrencies are not under the control of any central bank, international
transactions can be made easily, in seconds.
Those who think that traditional markets are low-yielding see
cryptocurrency trading, which can be done 24 hours a day, 7 days a week, as a
good investment option. Cryptocurrency trading; It attracts the attention of
investors with its features such as not requiring a long and complicated
registration process, being globally accessible and having no transaction
limits.
Due to the complexity of digital currency technology, it is important to be
careful before investing and not lack knowledge of cryptocurrency mining
(performing certain tasks to obtain cryptocurrency). Investing can be risky due
to excessive fluctuations in prices. The fact that cryptocurrencies are not a
legal official institution, which is the assurance center, prevents them from being
fully accepted and makes it open to cyber attacks. Using reliable crypto money
sites ensures keeping the security at a high level. If the wrong wallet address
is entered during the supply of crypto money or the same mistake is made while
sending, the person to whom the crypto money was sent incorrectly is not
detected, and there is a financial loss.
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