Are Your Crypto Coins Safe Enough?

 

Human beings always dream of effortless earnings. When he sees an opportunity to achieve this, he dives into unfamiliar waters without thinking about it. It recently happened in Turkey as it is evidence of crypto currency market. Thodex’s boss disappeared with investors’ money. This market does not yet have legislation, no control, no credibility and no claim. What the investor had to do was download their digital wallet and request the passwords of the cryptocurrencies they received from the exchange and keep the cryptocurrencies in this wallet. Unfortunately, as I said before, those who try to swim in unfamiliar waters or even dive into these waters without even knowing to swim seem to have left their money to the initiatives of the managers of these exchanges. I told you to download cryptocurrencies to these wallets that should be done here, I think many exchanges will not give these passwords if they are requested, because perhaps most of them do not even have as much crypto money as they claim. That is, it will be for thousands of small investors who invest all their assets in money invested in something that is not there and in earnings never owned.

Block chain constitutes the infrastructure of the future money system. But there is still time for this. Each time a new technology arrives, until the financial market is in place, coyotes descend on the market and fall on their innocent prey. Now that we are entering the biggest financial crisis of the world step by step, the citizens who are trying to protect the value of their money in the face of the unlimited coins and the country currencies that have lost their value, have started to fall into these traps. Gold and silver have always been the strongest value preservation tools. Rowing in volatile markets with speculative effects is not for everyone.

Source: https://arzualvan.com/are-your-crypto-coins-safe-enough/

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Decentralized Finance DEFi

 

Decentralized Finance  DEFi, The system we are in, which we can also call the money economy, consists of centralized structures to a large extent. We see these central structures as large financial intermediary institutions both in factories with large production capacity in real production and in financial markets. In short, what we call money is a centrally managed exchange tool. This system is about to be left behind now. Thus, in an increasingly digital world, money has also started to be digitalized. Supported by digital infrastructures such as blockchain, crypto coins seem to be candidates for decentralized exchange tools in the system. The best known of these new forms of money is Bitcoin. Bitcoin is a decentralized money that can be transferred from one person to another without the need for intermediary institutions with its decentralization feature. In other words, many financial transactions such as lending, evaluation of savings, insurances, real estate purchases are carried out by intermediary institutions. In this central system managed by a single center or person / s, we witness that incidents such as fraud, mismanagement and corruption occur frequently.

On the other hand, we cannot see such problems in a decentralized system. The transactions listed above can also be performed in a decentralized system. The only difference is that there is no single manager or executive units in this system. In this system, transactions are made transparently in front of everyone and are recorded by everyone. In this way, there is no need for a notary public. Cryptocurrencies traded on decentralized platforms are decentralized. However, the very volatility of these currencies creates doubts about their reliability. Therefore, many cryptocurrencies are valued with the dollar, which is the most valid fiat currency in the system. In this way, they gain stability by being dependent on the dollar. In this case, considering the rapid pace of the system towards crisis, another question is how stable the dollar, which is the reserve currency, can remain. In the central system, the requirements such as opening an account and identity verification for financial transactions supported by infrastructures such as block chain are eliminated. In this way, besides the transparency given by decentralization, unnecessary procedures are eliminated. In decentralized systems, debt demanders and lenders can meet on the same platform without the need for another intermediary. Here, the cryptocurrency owned as collateral for debt is shown and debt dealing can be done in a very practical and autonomous way. Finally, the most important advantages of decentralized systems can be seen as the first steps of the future financial system, as they are open to everyone, flexible, transparent and every transaction is registered and approved by everyone.

Source: https://arzualvan.com/decentralized-finance-defi/

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Cryptocurrencies Energy Consumption

 Cryptocurrencies continue their adventures that started with Bitcoin in 2009 by accelerating. The cryptocurrency market has grown significantly. Blockchain technology, which came to the fore with Bitcoin, seems to have an important role in the transformation of the financial and economic system.

The system we are in ignores the feature of being the basis of the future financial system, seeing the blockchain technology that will transform itself and crypto money such as bitcoin as an environment where money laundering is more common. Although cryptocurrencies have become widespread in recent years, there are also common opinions that most of them will not be in the future.

On the other hand, the energy used in bitcoin mining has attracted the attention of environmentalists, and concerns that global warming will increase if it becomes widespread.

Bitcoin and Ethereum, pioneers of cryptocurrencies, are produced through a process called mining, which uses the computer process to solve sophisticated algorithms. Huge data centers are being set up that consume huge amounts of energy to mine Bitcoin. Miners moved to China and South Korea because electricity is cheaper than in the Midwest.

Source: https://www.statista.com/statistics/881522/bitcoin-energy-consumption-relative-to-select-countries/

In the chart, the ratios of the energy consumed in Bitcoin mining to the country’s energy consumption are given. Accordingly, the energy used in Bitcoin mining is approximately 1.25 times the total energy consumption of Czechia. When this rate is compared with the Netherlands, it is seen that it is about seventy-five percent of the total energy used by the country.

As can be seen from this, environmentalists are not wrong in their reactions. It is clear that the Proof of Work technology used in Bitcoin mining is increasingly causing high energy consumption.

Proof of Work is a system that validates functions and limits abuse by using computational resources to calculate algorithms. Mining uses more energy each year than several countries combined. This increase in energy consumption in the economy could open up a new market for utilities.

In fact, the population buys the application-specific integrated circuit (ASIC), an integrated circuit designed for specific mining use. Cryptocurrency mining data centers generate a lot of heat. Mining not only needs computational power to solve complex algorithms, but data centers also need energy to keep their servers comfortable.

In 2017, the Venezuelan authority closed the execution of the mining process due to the illegal operation of 11000 computers. The country suffered serious consequences as a result of the consumption of electricity, including blackouts. Companies around the world are investing in more sustainable technologies to reduce the harmful effects of bitcoin mining on the environment.

Proof of Work versus Proof of State.

The main difference is that proof of work requires a very powerful external source (“mining hardware”) because proof of work is not. Proof-of-work critics argue that fewer people will be motivated to mine as Bitcoin prices/rewards/fees fall. As a result, the protection of the system is reduced. Since staking/adding new blocks to the blockchain is free, critics of staking argue that you can use it to stake multiple identical coins at the same time.

As a result, Bitcoin is produced with blockchain technology, which will form the financial and economic infrastructure of the future, and for now, the energy needed by this technology is too big for the world to handle.

However, this does not mean that the technology will be abandoned. It only reveals the necessity of searching or producing new energy sources. Perhaps in the future, new technologies will be developed that are similar to blockchain but require much less energy.

Source: https://arzualvan.com/cryptocurrencies-energy-consumption/

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