This is a giant leap towards digitization that might help Pakistan stand among the big dogs of digital world. Special Credit is due to TMP who have been advocating for legalization since a long time.
Gone are the days when paper money used to be the trading medium because in today’s world Cryptocurrency has taken that space and it’s pretty much catching on. Since the advent of internet, the world that we know is changing at an unprecedented pace and the revolutionary technology has helped us create new opportunities and beneficial returns. The aim of any invention or for that purpose, innovation, is to make lives better but the inability to comprehend these innovations is hindering growth.
For Pakistan that has been to Not Legalize Cryptocurrency. Everywhere in the world, governments are jumping onto such opportunities form the digital paradigms to create better lives for their citizens. Recently news has come in that Khyber Pakhtunkhwa (KP) provincial assembly has finally passed the bill for legalizing Cryptocurrency. However, the technology enthusiasts are worried about what might follow.
In order to fully realize the importance of this news you need to first understand what are talking about.
What is Cryptocurrency?
Cryptocurrency is in short digital money that can be basically used for different transactions in between people who own that currency or accept it as a form of payment to ensure that no transaction is out of the ledger and can be easily seen by anyone who wishes to. These records are stored in a system spanned over millions of computers worldwide and are therefore quite safe and secure. Read more about cryptocurrency here:
What is bitcoin?
Bitcoin is a form of Cryptocurrency or one could say the first Cryptocurrency ever introduced to the existing digital market back in 2008-2009. The implementation of this currency was then released as open source software. Back then it was worth literally nothing, nowadays bit coin values over $22000, which surely is a lot of money!
What is blockchain technology?
Blockchain is the technology behind these digital transactions which makes it possible for people to trade bitcoins and other Cryptocurrency. The main concept behind this technology is to kick out the 3rd financial party in order to enable two people to send or receive money from each other sitting in different parts of the World. The transactions are secured in a block which are infinitely secure and hence the name Blockchain.
The concept of open ledger
You can understand this better with the help of an example.
If A wanted to send money to B, an open ledger will be created which will then allow A to send a given amount of money to B. Now B wants to send money to C and the amount of money B sends to C will be connected with that open ledger. This way, A, B, and C will be able to easily see who sent money to whom because of the open ledger. If A tries to send a substantial amount of money to C directly, B will be immediately notified because of the open ledger.
This way blockchain and open ledger removes the dependence on 3rd party, ensures safe and clean transactions, helps validation, is cheaper than other alternatives, and last but not the least, is time saving.
Concept of mining
There are people involved in the blockchain technology whose job is to validate transactions and in return they earn a financial reward which is in the form of Bitcoins. This way no single transaction goes off the record because everyone is searching for a specific key to validate that transaction all the time. Miners add that transaction to ledger keeping the digital world safe and open.
Economic incentive of miners is to ensure the true open ledger with the help of computational power so that the main objectives of blockchain technology are achieved ethically. Mind you that these are just surface basics of the method and true implementation is complex and detailed.
With blockchain and Cryptocurrency the possibilities are endless which can be further expanded for the people of Pakistan so that the citizens too can enjoy the benefits. We hope and believe that other provinces will also follow in the footsteps of KPK.