And you offer it in a special financial market to buy real currency in return, and it turns into assets that are traded in this virtual financial market.
Cryptocurrencies work on the principle of removing the intermediary, i.e. the bank, especially in foreign transfers, as these exchanges are recorded in a distributed ledger known as the blockchain, according to the Encyclopedia
investopedia, the blockchain system works on networks of computers that are not connected to a central operator (server), and anyone can employ his device and add it to the network in exchange for a material reward in digital currency, which is known as mining. Since decentralized networks suffer from the problem of integration between them, it is not allowed to modify the recorded exchanges, but only to add information. In order for the transaction to be recorded, there must be agreement between several computers to ensure that this process is not subject to any change during its decoding, and hence the word encryption in the names of currencies.
Creating illusions from creating criticism
For a decade, several “advantages” of this decentralized system have been touted, such as its ability to combat inflation caused by printing money, to strip the central banks of exclusive financial control of the major countries that control the global economy, or even to hide the identity of the party conducting money transfers. In reality, digital currencies do not provide solutions to the dilemmas of money and money, but rather pose additional problems and create more illusions.
First, about the illusion of creating cryptocurrencies to combat inflation. Currency is a monetary unit whose purpose is to employ money in the economy, i.e. it is a means of exchanging products, services and properties, and therefore money is supposed to maintain an acceptable stability that ensures the process of trade exchange. Therefore, governments seek to maintain monetary stability, i.e. prevent inflation to preserve the value of capital. Hence, inflation is acceptable as long as its rates do not rise significantly, as it is an indication of achieving growth in the economy. The more growth is recorded, the higher consumption, and with it wages, work levels and production, as well as prices. However, crises occur when inflation gets out of control and prices rise to high levels and cause a recession, which prompts official monetary institutions to intervene by raising interest rates and controlling the printing of currency, leading to adopting austerity policies in government budgets, the price of which is often paid by the most vulnerable groups in society.
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