Home Global Village What is cryptocurrency and how can it help Pakistan?

What is cryptocurrency and how can it help Pakistan?

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Gulraiz Iqbal |

In the modern age, the advancement of the technology has shrunk the gaps of communication, which in the past had confined humanity. It would take days for a letter to reach one city to the other. This has however been replaced by email which now transmits a message in a matter of seconds.

More recently in the 21st century, at the disposal of a common man is the advent of social networking websites and it’s access is more and more personalized by the invention of smartphones. Human life is becoming more and more reliant on virtual modes of integration. At the end of the first half of the 2000s, we have witnessed yet another ground breaking technological invention that is ‘Cryptocurrency’.

It is beyond the confines of corrupt fiat money systems. We can certainly create an egalitarian society through blockchain. It is for sure the most valuable asset in human history. 

The Asian financial crises of 1997 where the Thailand baht and Malaysian ringgit lost its value, and the fall of U.S dollar in 2008 and of the euro during the Greek sovereign debt crises are all profound examples of this fact writes Jazib Nelson in his article published in June 2017.

A cryptocurrency and for that matter Bitcoin, is the first decentralized currency in the world. It enables digital transactions between two parties. It is not backed by any bank and has no intermediaries. Based on a peer-to-peer network, bitcoin was allegedly developed by a software engineer Satoshi Nakamoto in 2009.

Read more: Bitcoin | Soft and Vulnerable Underbelly

Bitcoin got everyone’s attention when it’s price recently started booming in the past few months. A famous story of a man is often heard who bought $27 of bitcoins in 2009 and forgot about it and now is practically a millionaire.

As of now bitcoin trades for more than $14000 and being volatile; the price may deviate when this article is published. In the words of the common man, it could be more or less compared to gold. Gold can be used as a medium of exchange but not necessarily for buying weekly groceries.  

the most important part of understanding cryptocurrencies is that it is meant more than money. It is the new economic system that diminishes our reliance on the state and makes us in charge of our assets.

However, even that can be possible where it is not practiced regularly but a website or for that matter an online service in Pakistan named BitcoinPk provides services such as Easyloads via bitcoins. In order to obtain bitcoins, they need to be mined by high-end computers consisting of various powerful GPU’s, which provides performance required for mining. Mining is a process in simple words that solves a mathematical equation in order to create a bitcoin.

As awareness spreads about bitcoin, it has paved its way into Pakistan as well. People here in Pakistan are using bitcoins in various ways, such as buying it online as well as building mining rigs. As far as its legality is concerned, there isn’t any law that prohibits the trading of bitcoins with a condition that the money used in it is not tax evaded or laundered.

Read more: Pak China trade set to replace dollar with yuan

FBR keeps track of those who indulge in such activities and in the past have traced people who have traded in bitcoins to evade taxes. The State Bank of Pakistan regards bitcoin as a commodity rather than a currency. The biggest trading platform for bitcoin or other cryptocurrencies is Urdubit, which is recognized by the State Bank according to its CEO, Danyal Manzar.

Cryptocurrencies are not controlled by any government in the world. They are the explicit wealth of an individual. They are much better at storing value compared to fiat currencies.

This being said bitcoin could also bring a lot of opportunities. According to a report published by World Bank only 13% adults in Pakistan are banked while the number of broadband subscribers according to PTA are 32.41 million (Source: Bitcoin.com).

Furthermore, Pakistan is the 3rd highest user of freelancer.com, a global community of more than 20 million freelancers. As freelancing is a billion dollar industry, Pakistan’s future in this sector looks bright for certain.

By using bitcoins in freelancing it would lower the costs and also increase their income by 2 to 5 percent. So being a high remittance market, a potential freelance industry and subscription to high end internet broadband services, Bitcoin can find a home market in Pakistan. (Source: Bitcoin.com).

Read more: Elimination of India’s high currency notes curtails corruption

The question of its sustainability is highly debated. Where JP Morgan calls it a fraud, at the same time CEOs of other multinational corporations are investing in it. At the same time countries like Japan give tourists the incentive of not paying commissions if they use bitcoins and Barclays became the first bank in the U.K to accept bitcoins as well.

Generally people have limited knowledge regarding bitcoin and those who have it take it as a quick method of making money, whereas it is the blockchain on which people need to be educated about.

It is increasing on a day-to-day basis in Pakistan where people are fascinated by the quick returns that they can avail on this and of huge margins if investments are done wisely. People are earning money from either direct or indirect investments from bitcoin, trading through other cryptocurrencies by investing bitcoins in it. I would like to mention a Youtuber here named Azam Riaz, who does a good job in explaining in how to trade in bitcoins and earn on a daily basis.

An impressive fact is that in Pakistan there is no service of Paypal, and the withdrawal process of bitcoin to actual money can be hectic, yet its growth here is a prospect of it being a potential hub of economic activities. The most concerning fact is its volatile nature which can be seen by its boom in 2017 jumping from $1000 to $15000 in matter of few months and its subsequent downfall when China put a ban on it.

Read more: Bitcoin to climb to $10,000

As the future of bitcoin is concerned, ‘the monetary policy designed by Satoshi is that there would be 21 million bitcoins in total, and as more and more bitcoins are mined, it becomes harder to crack the mathematical equation, making bitcoins to be mined at a diminishing rate. It is a rule based monetary expansion, notes Jazib Nelson. The future of cryptocurrencies is not only confined to bitcoin. It is the concept that has engulfed modern day finance systems and is here to prevail.

Pakistan is the 3rd highest user of freelancer.com, a global community of more than 20 million freelancers. As freelancing is a billion dollar industry, Pakistan’s future in this sector looks bright for certain.

Generally people have limited knowledge regarding bitcoin and those who have it take it as a quick method of making money, whereas it is the blockchain on which people need to be educated about. Cryptocurrencies are not controlled by any government in the world. They are the explicit wealth of an individual. They are much better at storing value compared to fiat currencies.

Read more: The sole reason behind the downfall of the USA

Finally, the most important part of understanding cryptocurrencies is that it is meant more than money. It is the new economic system that diminishes our reliance on the state and makes us in charge of our assets. It is beyond the confines of corrupt fiat money systems. We can certainly create an egalitarian society through blockchain. It is for sure the most valuable asset in human history. 

The views expressed in this article are authors own and do not necessarily reflect Global Village Space editorial policy. 


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