London, UK, Binary News Network, The first thing that comes to mind when thinking of cryptocurrency is the phenomenon known as Bitcoin. However, there are many other cryptocurrencies out there, with Litecoin and Dogecoin probably being among the more notable ones. Cryptos are gaining momentum and, more importantly, they are seen by some as the currency of the future. They are especially attractive to those that fear inflation or simply don’t trust their government-issued money anymore.
TrueNorthBit Broker Richard Walton says that the recent bitcoin hype paints a picture of a perfect investment opportunity. However, investing in cryptocurrencies is not for everyone. It has significant risks and the value of a single bitcoin can drop at any time – something that has already happened several times before. A lot of people also fear that bitcoin is just another bubble. It’s possible that it is, but it might be a long-term investment as well – nobody really knows where cryptocurrencies will stand in a few years from now. The appeal of cryptocurrencies might not immediately jump at you if you don’t completely understand the concept behind them.
Cryptocurrencies are network-dependent currencies that use cryptography to secure transactions and control the creation of new units. Cryptography has been around for more than half a century, so it’s not something invented by some shady guy in his garage. It can be considered safe enough for governments, banks and major companies to use. After all, we already trust them with our money and personal information.
More about crypto
Cryptocurrencies are, essentially, limited entries in a not-so-public database that no one can change without fulfilling specific conditions. They operate as peer-to-peer payment systems, so there is no central authority that regulates them – although most of the biggest cryptocurrencies have some non-profit organization behind them.
Cryptocurrencies can often be traded on various online exchanges that deal with real money. The value of these currencies is the same no matter where you are in the world. You can buy or sell them just like any other currency. There are many ways to acquire cryptocurrencies aside from buying them on an exchange. You can try mining them or receiving them as payment for a service you’re providing. There are also several charities that accept bitcoins, so it’s possible to donate to them anonymously and let others know that you’ve done well without getting all the glory.
Walton says that many countries are still not sure how to deal with cryptocurrencies. Some have created some regulations that are more or less friendly towards bitcoin users while some others have banned digital currencies altogether. You should always look up the legal status of cryptocurrency in your country before getting involved in exchanges, mining pools or any other activity that deals with cryptos.
Crypto in Pakistan
Cryptocurrencies are not officially banned in Pakistan. However, the State Bank of Pakistan (SBP) warns its citizens against using unregulated currencies like bitcoin, saying that these are “vulnerable to be used for money laundering /terrorist financing”. As such they do not qualify as legal tender. Transactions involving digital currencies can be risky due to the lack of any official authority to complain to if something goes wrong. This contradicts SBP’s previous statement against the use of illegal, unregulated and unlicensed virtual currencies issued in Pakistan.
The stance on cryptocurrencies is not very clear at this point – perhaps mainly because nothing has been officially banned, either. People who live in the country might still be subject to legal consequences for using them, but it’s possible that the government just wants to warn citizens against using them. Until the SBP issues some sort of regulation or sets up an agency that will oversee cryptocurrency activity in Pakistan, people are free to use them as they please.
It should be noted that no matter how unregulated cryptocurrencies might appear, Pakistanis are highly interested in the area. According to a report, Pakistanis hold around 20 billion dollars in cryptocurrency accounts. It was revealed that in a period of 1 year, the market growth went up by 711% allowing the country to climb to the third position on the crypto adoption index. Walton thinks that the number might be more than this because the peer to peer deals do not form a part of the record.
What does it show?
The statistics suggest that people are mainly interested in investing money in digital currencies because they want to make quick, easy money without much effort. But it should be noted that the volatility of cryptocurrencies is significant enough to ruin any chances for investors looking for secure and steady returns. Mr Walton says that in a country like Pakistan, where the economy is already in a bad state and people are struggling to find any positive avenues, cryptocurrencies can easily cause more damage than good if not used properly. This is mainly because of their low liquidity, lack of any central regulating authority and high transaction fees.
The market for cryptocurrencies in Pakistan is still very young and it’s difficult to predict what will happen with the future of digital currencies there. There are no specific rules about cryptocurrencies at this point; however, some people can still be subject to legal penalties.
Disclaimer: Our content is intended to be used for informational purposes only. It is very important to do your own research before making any investment based on your own personal circumstances. You should take independent financial advice from a professional in connection with, or independently research and verify, any information that you find on this article and wish to rely upon, whether for the purpose of making an investment decision or otherwise.