Crypto Money is the new reality of payment systems that have been on the market since 2009, but have attracted even more attention from heads of state to giant investment companies for the last 5 years. The crypto money system, which has reached a wide audience even in the technology community, is still a great mystery for end users. In this article, I wanted to introduce more closely the cryptocurrencies that have not yet clearly penetrated into our lives for many of us, but I foresee that there will be much more in the near future.
In order to understand the concept of crypto money, it is first necessary to know what "crypto / cryptology" is. Cryptology is the science of encryption in its simplest terms; In other words, it can be expressed as all of the techniques used to transform a readable information into an unreadable form by unwanted parties.
Say hello to the cryptocurrency
The term "Cryptocurrency", created by combining the words "crypto" and "currency", means crypto, "cryptocurrency". Crypto money refers to the virtual currency that is used via the internet and is not connected to any central authority or intermediary institution. Cryptocurrencies take this name because they can only be used from virtual wallets where they are placed using certain passwords.
With cryptocurrencies, individuals or institutions can spend or receive money just as they do with real money. In fact, we have been familiar with this system for years because we use this system for our bank cards, virtual cards or every transaction we make in a virtual environment. For example, when we spend with our virtual card, we spend money virtually without physically leaving the cash of the bank.
Unlike real money, cryptocurrency is not a value carried in a leather wallet. No state or private organization has a say in the production of these coins, which have been developed with a decentralized system, and they are not affected by the economic situation of any country. To put it briefly, crypto coins are organic structures and they obtain a certain value by being produced by individual users without any government support or central authority. This ensures that the currency is referred to as more secure.
From Lydians to Cryptocurrency
Although there are many types of crypto currencies today, Bitcoin is the first to emerge and still the most common. So by whom and how did Bitcoin come about? As the founder of Bitcoin, all sources point to the name "Satoshi Nakamoto", but the interesting thing is that it is not known who or what this name represents.
Bitcoin is an open source software developed by Sahoshi Nakamoto alias. Although Bitcoin is the ancestor of crypto currencies, there are many types of cryptocurrencies that have a place in the crypto money markets and are adopted by users: Ethereum, Ripple, Tether, Litecoin, BitcoinCash, etc. some of these.
How Is Bitcoin Made?
As I mentioned earlier, Bitcoin is not a paper money minted in the mint. For the Bitcoin production phase, the term "mining" that works with the "proof of work" algorithm is used. In other words, just as digging is done to find gold, math problems are tried to be solved by software to find crypto money. Bitcoin mining "BTC Mining" operates with a structure and Blockchain technology that provides financial transfers, approves financial transactions and enables the production of new Bitcoins.
Bitcoin miners are called "miners". In Bitcoin (BTC) mining, miners use special software to solve math problems. The mining procedure, which ensures both the security, continuity and operation of the network, is the most important part of the Bitcoin network.
While a miner completes the transfer transactions he wants to take place, other miners confirm this transaction. In this way, the security of the transactions on the network is ensured and this transaction is added to the "blockchain data ledger" network as a new link.
Is it safe for the user?
In the use of crypto money, transactions that can be seen in all systems that have access to the network are more open, visible and transparent than all known and used systems.
Crypto money is a safe currency due to its organic structure and not being managed by any central authority, but this structure does not make cryptocurrencies completely safe.
The biggest risk of cryptocurrencies for users is that if the money on physical computers is not transferred to the virtual wallet, it can be lost if the computer crashes.
Another threat is that with a transaction volume exceeding billions of dollars, the risk of "hacking", ie cyber attack, is present, albeit low. The costs for "hackers" seem to be quite high even for organizing such an attack.
Is it risky for the state?
The events in Russia and Korea show that some organizations and individuals using cryptocurrency have developed their own fraud model. Crypto money is perceived as a threat by states because it can be used easily for illegal activities such as money laundering and tax evasion.
Since these coins are kept in virtual notebooks and these books are located on the computers of millions of users in a way, it poses a serious risk that they cannot be followed by a central authority, while banks and non-governmental organizations increase the pressure on the relevant states.
Goodbye to paper money, hello to digital payment systems
Today, when the world economic order is reshaped with the shocking effect of the pandemic, the structure of crypto money that is not affected by politics, the block chain that cannot be tracked and its rapidly profitable shares have become the favorite of the world countries.
While states want to control the money, which is a symbol of sovereignty, even digitally, through central banks, many states are taking action to issue their own cryptocurrencies; Dubai (Emcash), Japan (J-Coin), Venezuela (Petro), Estonia (Estcoin), Sweden (E-Krona), Russia (Crypytoruble) are performing their first cryptocurrency trials.
The People's Bank of China (PBoC), China's central bank, officially confirmed the news that the country's official digital currency will be tested, and stated that the tests will soon begin in the country's capital, Beijing.
Kenneth Rogoff, Professor of Economics and Public Policy at Harvard University, suggests that digital currencies may explode market size over the next five years. Rogoff claims that the volume of the markets will climb to $ 5-10 trillion in five years.
In the report of Oxford University examining the transaction volume in the crypto market; With the spread of Covid-19 cases around the world, it is seen that the volume of crypto money increased between January 1, 2020 and March 30, 2021. The researchers explain this by the decentralized nature of crypto transactions and the fact that investors turn to crypto to secure their money when they lose trust in government and banks.
In the coming months, we will see whether the rising trend of crypto money will continue.
Crypto will also be included in the new normal ♥