The pace of cryptocurrencies accelerated last week in particular after renowned firms, such as Mastercard and Tesla, voiced their interest in adopting cryptocurrencies as a mode of payment.
This move is expected to trigger a cryptocurrency revolution across the world and could lead to a wider acceptance of digital currencies as well as pave way for the development of required infrastructure to adopt such currencies.
Nowadays, everyone wants to become rich by investing in digital currency. However, the point is people don’t know that digital currencies experienced many ups and downs in the last few years. Moreover, investing in crypto isn’t risk-free as well, but first, we have to know what is cryptocurrency and is it legal to trade such currencies.
What is Cryptocurrency?
Cryptocurrency is a digital asset that is created and transferred with the help of cryptographic methods, mostly based on blockchain. Due to this cryptography, no one can forge cryptocurrency.
Digital currencies can be understood as ones that have no physical form. The cryptocurrency is a medium of exchange that is digital, encrypted and decentralized. Unlike the U.S. Dollar or Rupees, there is no central authority that manages and maintains the value of a cryptocurrency.
You may be familiar with the most popular version, Bitcoin, but there are more than 5,000 different cryptocurrencies in circulation, according to CoinLore. You can use crypto to buy regular goods and services, although many people invest in cryptocurrencies as they would in other assets, like stocks or precious metals.
Blockchain
When we defined cryptocurrency we said it is based on blockchain technology. Blockchain is a growing list of records called as blocks which are connected using cryptography. It is kind of digital ledger which stores the record of the transaction between two parties.
Blockchain is an efficient and verified system. Moreover, it does not allow modifying data. In simple words, it is an open and distributed digital ledger that you cannot modify.
Mining digital ‘gold’
The amount of cryptocurrencies available in the market depends on its mining. Mining, with regard to digital currencies, is a technique of using advanced computers to produce more cryptocurrencies and add it to the ledger or blockchain.
Mining helps regulate the prices of cryptocurrencies because it is the supply mechanism of digital currencies while demand is generated from the general public.
According to the WB report, if honest participants own most of the computer power, the expectation is that they will create the longest chain, as the probability that they add new blocks is proportional to their computer power. As a result, the longest chain can be considered the consensus view.
Is Bitcoin legal in Pakistan?
As we have discussed all the details about cryptocurrency and blockchain, now we will discuss the main thing, “Bitcoin”. It is one of the first and most valuable cryptocurrencies in the world right now. In 2017, Bitcoin experienced skyrocketing price increase. Now 1 Bitcoin is equal to 9,092,441.63 Pakistani Rupee.
The daily volumes of trades are increasing in Pakistan despite the government’s ban on bitcoin and other cryptocurrencies. Bitcoin is being traded heavily on peer-to-peer exchanges like Paxful and LocalBitcoins in Pakistan.
Other chunks of trades are happening in social media groups and online communities where freelancers sell their bitcoin in exchange for cash-to-money exchangers who later sell it on a 5 percent to 10 percent premium.
At present, digital currencies are not considered legal tender in the country by the central bank. Yes, you heard it right. In a statement in 2018, the State Bank of Pakistan stated that virtual currencies like Bitcoin, Litecoin, Pakcoin, OneCoin, DasCoin, Pay Diamond, or Initial Coin Offerings (ICO) tokens are not legal tender, issued or guaranteed by the government of Pakistan.
How to trade?
Despite being ban, mining and trading in cryptocurrencies thrive in Pakistan, with apps like Binance and Coinbase among the most popular downloads in the country, according to web analytics company SimilarWeb. To trade Bitcoins using these apps you need to create an account.
Users can easily buy Bitcoin and other cryptocurrencies using a wide range of payment options, including bank transfer, credit or debit card, and cash. Once you have purchased a cryptocurrency from Binance, you may trade it to make money in the form of cryptocurrency by trading for profits.
You may choose to exponentially increase your money by trading the currency and profiting if it goes up or down. While doing so, you can also be confident that with time the value of cryptocurrencies like Ripple (XRP), Litecoin (LTC), Ethereum (ETH), and Bitcoin (BTC) will only increase as blockchain becomes more popular. If you do not wish to take the risk of trading, you can convert your currency to a stable coin and earn up to 15% interest annually risk-free.
