Cryptocurrency is a fully digital, encrypted, virtual currency that can be used in clearing transactions. According to some, it is the currency of the future.
Today, cryptocurrencies are a phenomenon that has been heard by many people, with a lot of unknowns that have attracted a lot of attention from everyone from heads of state to giant companies. Cryptography is used to verify and securely perform swap transactions. It has no physical counterpart.
Money originally spent and transferred by debit and credit cards is also virtual money, because as a result of these transactions, only changes in System data occur. Cryptocurrencies also have the principle of working in the same logic. But there is a system that is not managed by any authority or government, i.e. decentralized, which makes the system safer.
What is cryptology?
Cryptology is a science of encryption. Data is encrypted according to a system. Cryptocurrencies are transferred through the creation and decryption of passwords on the medium. Algorithms such as Hash functions are used.
History Of Cryptocurrencies
There have been many attempts to create a digital currency since the 90s, the jumping-off age of technology. Systems such as Flooz, Beenz and DigiCash were developed, but these attempts failed due to fraud, financial difficulties, internal disputes. All these studies developed a reliable, third-hand approach thinking.
Bitcoin, the first cryptocurrency, was developed in early 2009 by a person or persons who came up with the codename Satoshi Nakamoto. Although it was said to have been developed by Satoshi Nakamato, it was shared as open source software by a person(s) who or who is unclear. This network proceeds through a concept platform similar to end-to-end encrypted file sharing platforms.
Security of cryptocurrencies
One of the most important problems with payment systems is the possibility that the same money is spent twice. The traditional method used to prevent this is to put a central intermediary (banks) that keeps a record of the transactions made. But this method means that an authority that can control all capital is involved. This reduces reliability.
But in a decentralized, distributed network-such as Bitcoin – every part of the system must give approval for the transaction to take place. These transactions are made through blockchain, so every transaction is seen by everyone.
All transfer operations are carried out with the wallet addresses of the sender and recipient and the amount to be sent. The swap or shipment process must be verified by the sender and then approved by the system. Assertion can only be performed by miners by solving a cryptographic puzzle. If a transaction is approved, it is irreversible. The biggest risks for cryptocurrencies are the possibility of hacking and attack.
How is cryptocurrency produced? What is cryptocurrency mining?
The production of cryptocurrencies is carried out through a distributed system like themselves. So it’s user-based. Cryptocurrencies have a production limit, so as the amount of cryptocurrencies produced increases, the transactions that need to be solved to produce cryptocurrencies become more difficult.
The production process occurs through mining, even if it is not physical mining, operations based on solving mathematical problems are performed. In other words, if you have processing power and internet connection, you can take on the mining task without being assigned by someone.
Is cryptocurrency legal?
The legality of cryptocurrencies varies from country to country. In some, the status of legality is still unclear or variable, while some countries allow its use and trade openly. Some countries have banned or limited the use of cryptocurrencies.
“Is Bitcoin legal?”such questions are asked by many. Currently, there are no laws or restrictions on the use of Bitcoin by the state of the Republic of Turkey, so you are unlikely to be punished for keeping, buying or selling Bitcoin or other cryptocurrencies in your wallet.
Is mining legal?
Bitcoin or cryptocurrency production, that is, mining, is not a crime. A non-legal case it is not.
Can your earnings from cryptocurrency be taxed?
If regular money inflows are detected into your account, tax may be charged on your earnings. If finance questions your earnings, you can indicate that you received this income from cryptocurrency clearing or mining, and if necessary, you can verify these transactions using your account dumps.
What are the advantages of cryptocurrencies?
It is not affected by the economic situation of countries as it is not connected to any central bank.
It is not possible to freeze or confiscate the account.