Cryptocurrency
Digital currencies are money that can be exchanged and stored digitally using blockchain technology, which uses cryptography. The majority of virtual currencies are controlled by decentralized networks and are not backed by powerful banks or governments.
1- Bitcoin is the first widely known digital foreign currency. It was created on January 3, 2009, by an anonymous person or group of individuals under the pseudonym Satoshi Nakamoto after the release of the founding announcement titled "Bitcoin: A Peer-to-Peer Electronic Currency Machine". peers.
2 - Since the value of Bitcoin took a while to get past $1 and then rose steadily to its current value of tens of thousands of dollars, it took Bitcoin several years to achieve an amazing feat. The popularity of Bitcoin prompted the emergence of a number of competing digital currencies that sought to replicate its success and expand its uses and features. In particular, the Ethereum coin and network, which have added the power of smart contracts and enabled the creation of decentralized applications (dApps), now have the second largest market capitalization after Bitcoin.
3- Many currencies are worth more than $1,000 today, and the market value of all digital currencies is expected to reach $2.3 trillion by the end of 2022, making them an important component of the global financial system. In addition to their primary benefit of anonymizing the sender and receiver, digital currencies are widely used to transfer money today, especially international currencies. Many people also buy cryptocurrencies as investments with the aim of making money by reselling them at a higher price in the future.
The digital currency business The majority of digital currencies are based on blockchain technology, eliminating the need for a central intermediary or institution that plans and executes transfers by storing a database of ownership and cash transfers on the various devices of network users. The goal of digital currencies is to record transactions and transfers between network members and then publish new transfer and balance information to all network members, rather than relying on banknotes or coins used in national currencies to prove each person's ownership or balance.
4 - New blocks are validated and created (new copies of transaction history) for each coin, known as the consensus mechanism. Its goals are to prevent double spending, protect the coin network from hackers, and create (or mine) new coins. Proof of Work (PoW), which is based on the need to use a large amount of total computing power to create blocks, and Proof of Stability (PoS), are the two most popular consensus mechanisms.
5- Digital currencies cannot grow or shrink in response to the state of the economy because, unlike national currencies, they are created through processes that are not related to actual economic activity on the ground. This makes it the ideal tool for carrying out illegal acts and operations such as money laundering, drug smuggling, terrorist financing, and the like.
6- Energy consumption and e-waste, especially for currencies that use a proof-of-work mechanism, where mining and the computing power it requires consume a huge amount of energy, sometimes equivalent to the consumption of entire countries of a single currency, and miners often resort to countries with low energy prices that produce exorbitant prices in unsustainable ways (like coal), as well as requiring miners to constantly update their machines and get rid of old machines, which leads to energy consumption and electronic waste.