Istanbul
- Many companies in Turkey are active in the field of investing in digital currencies and mining, and some say that this industry represents the destination for investors in the coming decades, although there is still "ambiguity" surrounding its working mechanisms and how to convert digital currencies into bank balances.
According to investment experts in digital currencies, the lack of information or the spread of false information about the performance of its companies causes the audience of this investment sector to confuse dealing with it, and it is one of the most important challenges in the field of investing in digital currencies.
The experience of Energico, which specializes in renewable energy and digital mining, is a model for investment companies' tendency towards this sector, which it considers an important entry point for promoting the decentralization of the cryptocurrency sector.
The company provides investors with the opportunity to purchase the computer hardware needed to carry out mining operations and operate them in trusted mining locations around the world and connect them to the Internet through appropriate software. It also follows up on the technical, accounting, legal and administrative procedures, and in return it obtains a percentage of the net returns obtained by the owners of the devices.
trends and mechanisms
The company asserts that recent years have witnessed an increase in the interest of many in the cryptocurrency mining sector, due to the more stable and continuous returns that it brings to them, unlike currency trading, which may achieve significant gains but within the range of high risks.
Bilal Eid, founder and director of Energeco, explains that many businessmen are more interested in continuous and more stable returns, even if they have lower financial values, while the youth segment tends to quick returns even if they are high-risk.
According to Eid, the investment in digital currencies is done by buying them or by purchasing the hardware that you mine, as mining operations represent an alternative to the central authorities in the case of traditional banks.
He says, "Through the mining process, thousands of computer devices connected to the Internet check the operations on the blockchain network (block chain) to ensure the correctness and implementation of the operations, and the mining process is what controls the process of issuing and extracting new currencies to become available in the market for trading, and in exchange for the computational effort. What the devices do gets returns through the currency they mine, and these returns are known and determined by a precise system to which all devices connected on the same network are subject.”
Investing in Turkey
Eid told Al Jazeera Net that the Turkish people are one of the most people using digital currencies, as statistics estimate their circulation by 5 million people, due to the ease of transferring paper money such as the lira into digital currencies such as Bitcoin, Ethereum, and others, in addition to the fact that transfers are carried out in a regular manner. Almost instant through the official state banks.
On the other hand, Eid believes that Turkey does not compete in the cryptocurrency mining sector due to the high cost of electricity needed for mining in it, in addition to the lack of clarity in the legislation governing this activity yet.
The head of the Turkish Informatics Association, Rahmi Aktaba, had announced that more than 3,500 digital currencies that can be bought and sold are traded on digital platforms that are not subject to government regulation, and these platforms are known as "cryptocurrency exchanges."
Eid expects that investment in buying digital currencies will continue to grow, especially with the increase in youth demand for it, in light of the decline in the value of most paper currencies around the world, while the lack of clear legislation is the most important impediment to the growth of digital mining.
The United States of America is at the forefront of bitcoin mining countries, while many Western countries such as Canada, Russia, Germany, Ireland and Sweden are in the top ten countries in this sector.
Growth indicators and obstacles
For his part, the academic researcher in Turkish economic affairs, Muhammad Abu Alyan, believes that Turkey has become one of the leading countries in the region at the level of digital currency trading platforms.
Abu Alyan explained that the dynamics of the Turkish market resulted from the concentration of many local and international platforms that provide trading opportunities in both Turkish and English.
He points out that the project to issue a digital lira based on the Turkish lira and have a tangible financial return - which the Central Bank of Turkey announced earlier - represents an important indicator of the growing growth of this sector in the country.
Abu Alyan tells Al Jazeera Net that these steps coincide with the launch of a research platform by the Turkish authorities to develop the local digital currency, and the start of preparing a draft law to control the cryptocurrency markets.
But he indicates at the same time that the continued fluctuation of Turkish officials' statements between encouraging the trading of digital currencies and warning of the dangers of this casts a negative atmosphere on the performance of this sector.
Faruk Fatih Ozor, the manager of a cryptocurrency platform, fled Turkey in April 2021, causing a shock to about 400,000 investors in the Thodex platform, whose losses amounted to about two billion dollars at the time.
As for researcher Abdel Halim Al-Abadla, he summarizes the challenges facing investing in the cryptocurrency sector in Turkey as follows:
High opportunities for fraud and fraud due to the absence of controls such as those available in traditional markets and stock exchanges.
Not specifying a responsible party that can be resorted to in case of fraud.
Lack of sufficient information and technical knowledge of the concept of investing in digital currencies.
Absence of integrated legislation on crypto or digital currencies at the global level.
The digital currencies do not exit the real market, which keeps them trapped in trading platforms, fake speculative operations, and so on.
technological revolution
Cryptocurrency experts consider the blockchain technology as a new technological revolution similar to the fundamental transformation that the world has witnessed since the advent of the Internet, due to the availability of many advantages that address some of the challenges facing the business sector related to the preservation, processing and protection of transaction records, speed of completion, verification and efficiency of implementation, and finally the level of transparency and reliability. and constancy.
Al-Abadla defines blockchain technology as a decentralized account record that includes all the transactions that take place, such as transactions or deals over a peer-to-peer communication network using this technology, so that participants can certify the ongoing operations, such as financial transfers, deal preparation, voting and many more uses. other without the need for a central certification authority.
Al-Abadla told Al-Jazeera Net that the information is recorded in the blockchain technology in a sequential archive, and it is encrypted to prevent tampering and forgery in the original input, and it is stored in the form of blocks, each of which contains detailed information about one of the operations that were performed on the network.
He explains that the stored encrypted data is closed with a hard-to-crack lock called "hash", indicating that this process is repeated several times, and the information is stored and encrypted to be in the form of an endless chain of blocks.
Al-Abadla points out that digital currencies appeared for the first time in history in 1983, but their circulation did not succeed due to the lack of a central network structure and its lack of regulatory standards, until the emergence of Bitcoin, which is the most famous digital currency in 2008, after which several digital currencies appeared, which are Electronic money that is traded through a decentralized network.
He explains that many central banks in the world have begun to adapt to the blockchain to own the digital version of their currency to benefit from its benefits.
Al-Abadla believes that the goal of mining is to obtain new units of electronic currencies, as the mining process works to document the previous bitcoin transfers that took place in the network in the last minutes, rejecting the false and duplicate ones, and keeping the correct one and recording it in the unified record that exists in all Bitcoin users’ devices network connected.
He also believes that the most prominent mechanisms for investing in digital currencies are through local or international trading platforms, to take advantage of price differences and market conditions, or by promoting and developing blockchain technology to issue new units of digital currencies.