SUNDAY February 28, 2021 LAW & JUSTICE SCIENCE & TECHNOLOGY EDUCATION Page 4 $1.43t Page 3 Page 8 I don’t recall a case where DNA tests proved was the global crypto market cap on ere is a norm here. Policies are based on Prosperity is directly linked to the state of charges against suspects — Imtiaz Somra February 27, 2021 personal experiences — Badar Khushnood higher education — Dr Ijaz Ali cryptoMISSING OUT ON THE REVOLUTION Story by: Omar Qureshi Design by: Mohsin Alam As A handful of big-ticket firms have signalled wider acceptance for digital currency, Pakistan may seem to lag behind. But experts say the road to cryptocurrency is fraught with risks and measured caution may be a healthy approach ith the novel coronavirus pandemic account holders to transact in virtual networks based on blockchain technology, Permissioned blockchains can also be cryptocurrencies on the application. encouraging cash averse economies, currencies/ICO tokens. Any transaction in which is a distributed ledger enforced further divided into two subcategories. Open Since cryptocurrencies do not exist in physical W cryptocurrencies have gained this regard shall immediately be reported by a disparate network of computers. or public permissioned blockchains, which forms, they are stored in digital wallets called significant traction. Long seen with some to financial monitoring unit (FMU) as a Distributed ledgers are a way to record and can be accessed and viewed by anyone, but coin wallets which are quite similar to digital scepticism on account of their mysterious suspicious transaction,” SBP concluded. share data across multiple data stores that where only authorised network participants bank accounts. These wallets offer the facility to technological nature, this has been especially Pakistan is not alone either in its blanket ban each have the exact same data records and can generate transactions and/or update the store and exchange cryptocurrencies as well as to true over the past few weeks as a handful of big- on digital currencies. Six other nations, namely are collectively maintained and controlled state of the ledger, and closed or ‘enterprise’ convert them to cash. Coin wallets are encrypted ticket firms pledged their support for using digital Bangladesh, Nepal, Egypt, Algeria, Morocco by a distributed network of computer permissioned blockchains, where access to protect user’s privacy and investment. currencies as a payment mechanism. and Bolivia have a complete prohibition on servers, which are called nodes. is restricted and where only the network The pace of global digitalisation accelerated cryptocurrency at the moment. An even larger According to a European Union paper on administrator can generate transactions and Mining digital ‘gold’ last week in particular after renowned firms, number of nations, including Canada and cryptocurrencies, blockchain is a mechanism update the state of the ledger. The amount of cryptocurrencies available in such as Mastercard and Tesla, voiced their China have placed significant usage restriction that employs an encryption method known the market depends on its mining. Mining, interest in adopting cryptocurrencies as a mode on the technology as well. While it is legal to as cryptography and uses a set of specific Massive volatility with regard to digital currencies, is a technique of payment. This move is expected to trigger hold cryptocurrency in these nations, banks mathematical algorithms to create and verify a of using advanced computers to produce more a cryptocurrency revolution across the world operating in them are not allowed to open or continuously growing data structure that takes cryptocurrencies and add it to the ledger or and could lead to a wider acceptance of digital maintain accounts or have a correspondent the form of a chain of transaction blocks. Data 3,200% blockchain. Mining helps regulate the prices currencies as modes of payment as well as pave banking relationship with companies dealing in can only be added to this structure and existing of cryptocurrencies because it is the supply way for development of required infrastructure virtual currencies unless they fulfil a set of strict data cannot be removed, providing a complete is the growth recorded by one mechanism of digital currencies while demand to adopt such currencies. legal formalities. and secure transactional history. particular digital currency over a is generated from the general public. In order Even as it has made strides in the digital Blockchain is an essential component to keep track of past transactions without a side of things in recent years, Pakistan, like in of cryptocurrencies as it helps collect data period of three months trusted intermediary, most cryptocurrencies rely other aspects of the sector, seems to lag behind Pakistan is not alone pertaining to transactions and store it on an automatic process to achieve consensus when it comes to cryptocurrencies. electronically on computer systems. In practice, among a majority of participants, according to in its blanket ban on the EU paper describes it as “a technology with Crypto wallets and exchange a World Bank report on digital currencies and Illegal tender many faces” that can exhibit different features A defining feature of cryptocurrencies is that blockchain. To solve the so-called ‘distributed At present, digital currencies are not considered digital currencies. Six and cover an array of systems ranging from fully they are generally not issued by any central au- consensus problem’ that arises from this legal tender in the country by the central bank. open to permissionless. thority, rendering them theoretically immune to process, participants are allowed to compete for In a statement in 2018, the State Bank of Pakistan other nations have a On an open, permissionless blockchain, a government interference or manipulation. It is a permission to add a new batch of transactions to stated that virtual currencies like Bitcoin, Litecoin, person can join or leave the network at will, relatively newer form of digital asset based on a the decentralised database. Pakcoin, OneCoin, DasCoin, Pay Diamond or complete prohibition on without having to be pre-approved by any central network that is distributed across a large number This is achieved by letting participants use Initial Coin Offerings (ICO) tokens are not legal cryptocurrency as well entity. All that is needed to join the network and of computers. Some of the most prominent and their compute power to solve a difficult puzzle, tender, issued or guaranteed by the government add transactions to the ledger is a computer on widely circulated cryptocurrencies around the the solution of which is impossible to find of Pakistan. “SBP has not authorised or licensed which the relevant software has been installed. world include Bitcoin, Ethereum, Ripple, Bitcoin analytically and can only be reached through any individual or entity for the issuance, sale, Demystifying crypto There is no central owner of the network and Cash and EOS. trial and error. The first person that solves the purchase, exchange or investment in any such What is a cryptocurrency and how is its software, and identical copies of the ledger are Just like different currencies can be bought on puzzle can add a block of new transactions virtual currencies/coins/tokens in Pakistan,” the price regulated? According to prominent distributed to all the nodes in the network. at currency exchangers, cryptocurrencies can to the chain of existing transactions and central bank announced. cryptocurrency expert Jan Lansky, it is a kind The vast majority of cryptocurrencies currently be purchased from dedicated digital currency broadcast the new block to the network, so “In view of the foregoing, all banks/ of payment mechanism that does not require in circulation are based on permissionless exchanges or physical cryptocurrency ATMs. that all participants can update the blockchain development financial institutions/ a central authority and its state is maintained blockchains. The largest cryptocurrency exchange in the in their own copy. microfinance banks and payment system through distributed consensus. Moreover, On a permissioned blockchain, the nodes United States by trading volume is Coinbase Although the puzzle is difficult to solve, its operators (PSOs)/payment service providers cryptocurrency is an intangible asset and it does that serve as validators of transactions must which offers users the facility to purchase solution is easy to verify, allowing the nodes in (PSPs) are advised to refrain from processing, not exist in a physical form. be pre-selected by a network administrator digital currencies through its application. a cryptocurrency network to easily determine if using, trading, holding, transferring Because there is no institution backing who sets the rules for the ledger. This Lately, a few brokerage firms have begun a proposed block is valid and should be added value, promoting and investing in virtual cryptocurrencies, they are prone to price allows a way to easily verify the identity offering cryptocurrency exchange services as to the chain. Even if a node goes offline for a currencies/tokens. massive volatilities. In fact, one particular of the network participants. However, well. Robinhood, an application that helps period of time, the network is not jeopardised. Furthermore, banks/ development financial digital currency recorded 3,200% growth over a at the same time it also requires network retail investors pour money in stock market,