The growing use of the digital currency has generated a great deal of controversy in the recent period and has raised many questions about the nature of these currencies, their characteristics and mechanisms, the position of governments, and the potential opportunities and risks associated with these currencies. Especially the rapid developments in cybersecurity applications. This controversy took place in Egypt after the promulgation of Dr. Shawki Allam, the Grand Mufti of the Republic, on 1 January 2018, a fatwa prohibiting the use of the currency "digital" composition of the high risks to individuals and States, and said in a statement that " The trading of the currency of the bettukeen or dealing in it through sale, purchase, leasing, etc., but it is prohibited to participate in it, because it is not considered as an acceptable mediator for exchange from the competent authorities, and because of the damage caused by jealousy, ignorance and cheating in its bank and its standard and value. On the nose Ed and states. "
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Evolution of virtual currencies
Historically, currency users prefer safe operations within a stable, flexible and easy to use system. Gold coins have been used for a long time as a store of value, a unit of account, and an intermediary of exchange, a commodity of value in itself. The world's gold supplies were abundant enough to keep them used as currency. Although most commodity-based currencies have maintained stable values, they have been subject to fluctuations in value beyond the control of any monetary authorities, since the basis of the currency value reflects the supply and demand of the commodity. Over time, most countries converted their currencies from commodity-based to paper-based currencies. These currencies are official currencies issued by the central authority to be legal currencies that have no intrinsic value and are convertible into commodities such as gold at the discretion of the central authority. Thus, the value of paper currencies is based on the confidence of its users that the central authority will be able to maintain the value of the currency. The stability of paper currencies depends on the macroeconomic policies of governments, but they may face large fluctuations - during periods of inflation - they are at times totally worthless.
The first progress toward virtual currencies was made by the "David Chaum" encryption expert, who used unencrypted encrypted "e-gold" coins in 1996. Virtual currencies have become increasingly common in recent years, but so far have not These currencies are denominated in paper currencies and not adopted as official currency. However, they are designed to serve as a store of value, a unit of account, and a medium of exchange within a society that does not necessarily occupy a single geographical or political unit. Its core idea is thus to create a system that creates a climate of trust necessary to exchange transactions bilaterally between individuals through the use of technology without recourse to a central authority.
Virtual currencies are characterized by many characteristics, the most important of which are: global; they are not related to a specific geographical area, do not belong to a particular country, and are not printed by a particular central bank. Unlike regular bank transactions, buying and selling transactions are confidential and secure, and can not be monitored or interfered with. Many accounts and portfolios can be owned without being associated with a name or address. An important feature of this type of currency is also the speed of money transfer and lower fees. Instead of the need for a money transfer broker, which deducts a percentage of money, this process is done through the currency code without an intermediary called P2P or peer to peer. In addition, it can not be frozen or confiscated and can be exchanged in paper currencies such as the dollar and the euro through online encrypted operations. In addition, the difficulty of tracking is one of the most important features that make this type of currency attractive to terrorist elements, organized crime groups, money laundering, drug and arms trafficking, where it is difficult to trace such transactions in order to identify parties, customers and the ambiguity of goods and products used in the process Exchange.
Bitcoin, which has been on the financial markets since 2009, has been the most widely circulated virtual currency to date by a person who called himself the symbolic name Satoshi Nakamoto, which is an encrypted digital unit that does not physically exist. They are not covered by tangible assets, do not need to be issued any conditions or controls, and have no financial dependence in any central economic system, and are not subject to the powers of regulators and financial institutions; because it relies on trading on the Internet (Internet). A dollar-weighted financial instrument. The value of the dollar was $ 1,000 when it was issued in 2009, and exceeded $ 1090 to close to the price of gold. In late 2017, it reached about $ 20,000 for young people, but quickly fell to 13 thousand dollars after successive warnings of the use of this currency, in addition to electronic piracy, which led to a significant decline in value.
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The currency is issued through a process called Bitcoin Mining, which in turn relies on fast-paced electronic computers through the use of certain programs linked to the Internet (Internet), through which a series of mathematical steps sequence (Algorithms) And complex and documented calculations; to handle a long series of numbers and letters and stored in electronic portfolios (applications) after digitized with special codes, the stronger the processing and increased the greater the user's share of them according to the specific ceiling of the number to be traded, For circulation is 21 million formation.
The exchange of this currency to the network "peer to peer" P2P between users from one portfolio to another without an intermediary or observer through the electronic signature by sending a message conversion ID code for this currency and recipient address, and then sent to the network "Albtkwin" until the process is completed and reserved in A distributed account book known as the Block Chain, without requiring any data or information that discloses the customer's personal identity.
In contrast, there are other major currencies, the most notable of which are the Latinoin, which has a market value of about $ 19.53 billion, and rose more than 9% until December 19, 2017. Lithoquine is called "silver fortification", which was established in 2011 to produce more coins With a maximum of 84 million currencies, while the composition has a maximum of 21 million currencies. While the value of the "Bitquin Cash" to 37.08 billion dollars, although recently joined the virtual currency, specifically in August 2017. Of the currencies that have also attracted attention recently, "New" called "Ethrium China," and the value of New The market was $ 5.01 billion, and in 2017 it rose by about 69%. Currently, 65 million coins out of 100 million are being traded on the market. Monroe's currency was created by an anonymous party, like the Betquin, with a market value of $ 5.9 billion and a rise of 3.03 percent in December 2017. It is characterized by its high encryption system as it is difficult to detect the identity of the sender or recipient or the size of the transaction, which most likely believes that this currency will be exploited in illegal transactions. Unlike "Latinoin" and "Bitquin", "Monroe" does not have a specific size of the currency offered. RIBAL's market capitalization reached $ 29.66 billion, and in 2017 it increased by 12 percent. RIBL is used to link banks, payment services, digital asset exchanges and companies. Currently, about $ 38.7 billion of the total available amount is exchanged for $ 100 billion, much more than the rest of the virtual currency.
Interestingly, this revolution in the area of virtual currency if it continues - a potential candidate strongly due to increasing numbers of investors - may actually cause concern about bank deposits as it encourages investors without paying attention to the risks related to the option of buying these currencies, which are affected by supply and demand factors. The Cambridge Alternative Finance Report estimated the number of active users in the electronic currency industry at 3 million around the world in the first half of 2017.
Another factor that controls the price of the virtual currency is that many investors in the currency sector resorted to it as alternative currencies and safe haven in the event of fluctuations in the prices of traditional currencies, which contributed to the rise in value, the large form that has occurred and continues.
Different positions
Germany was at the forefront of the countries that officially recognized the currency as a form of electronic money, which allows the German government to tax the profits of the companies that deal with the development, while exempting individual transactions from these taxes. The same is true for Japan, which strengthens the position of these currencies and opens the door for further regulation. While most countries - primarily Russia and China - prohibit this currency as "speculative material" and tax evasion, and insist on the application of all rules against illegal transactions, especially as they are used in suspicious transactions. Most Arab countries have announced measures against these currencies, either by preventing their circulation or by issuing religious fatwas from some authorities to discourage individuals from using them or investing in them. However, some of these countries have recently begun to use the form of minting. They have announced the acceptance of this currency for the first time in Jordan in a café in the capital Amman, in a pizza restaurant, in Dubai, In Palestine, and also in the Ambassador market in Kuwait. In general, the facts do not indicate any movements other than warnings, and take action to prevent trading of these currencies only, while the ministries of finance or central banks have taken no steps at least to calculate the value of transactions, or the extent of investment in these currencies and the feasibility of benefiting from them.
While some believe that the official recognition of these currencies has a positive aspect of legitimizing them, others believe that this could open the door for further regulation of the currency and linking it to official government policies, which is contrary to the philosophy of the virtual currency of non-subordination to any party. Thus, the different considerations of the nature of Pitcuen worldwide as a currency, commodity, financial asset or investment instrument are often based on the nature of its use within the country.
These currencies are waiting for government decisions, at the head of these countries (Britain, Austria and India), which have declared that they are on the verge of introducing regulated digital currency legislation, and also need to establish legal controls to prevent the use of digital currency in illegal acts Or as a means of tax evasion.
Opportunities and challenges
The virtual currency has imposed a new reality on the international investment scene as investors 'opinions varied between supporters and opponents of the "mint" virtual currency trading amid investors' enthusiasm for quick profit on the one hand and warnings and fears of experts on the future of trading, Traditional investments, and the potential for a price bubble, will have economic crises with them as a result of a drastic change in value, instability and uncertainty in other currencies, and mining is a very difficult process that requires time, cost and high efficiency.
Encouraging the adoption of virtual currencies may face major challenges in terms of accepting the society as a new currency with no historical background, and thus may lack legitimacy as a currency that has no tangible representation in the form of paper or money in societies where it used to be money. Changes in attitudes may occur when the technology on which these virtual currencies are based becomes more common and reliable. In addition, where the default currency is the only way to make transfers, economic need may force people to accept default currencies.
Although it may be natural to have hypothetical currencies that benefit economic transactions at the moment, especially as electronic transactions are increasing substantially; however, dealing with a hypothetical currency issued by anonymous persons, in the absence of any financial authority to monitor them leads to their use in money laundering or Drug trafficking or the transfer of funds resulting from organized crime, thus contributing to increased fraud and financial fraud, as well as the economic risk of threatening monetary stability in countries where the use of Here it is.
While the value of traditional currencies is based on gold or silver, the value of the "composition" is determined by the volume of speculations, and the demand of people to trade this currency and deal with each other as an alternative to ordinary money; Although the market is the largest financial market risk, it is also the highest in profit rates, and this feature is used by brokers and their agents in attracting dealers and investors to use these currencies, which weaken the ability of countries to maintain their currency and control the movement of cash , Its stability and its authority to tighten control, as well as significantly affect the state's fiscal policy and the size of the expected tax revenues, while opening the way for tax evasion.
In addition, the technical challenges facing the deployment of a virtual currency and the extent of technological knowledge required for development, networking skills, computing, encryption techniques. While the computer may be sufficient to perform some virtual currency conversions, users of the default currency will need to make daily conversions more mobile devices through which conversions are made. In contrast to paper currency conversions, the complex composition of these complex transfers is an impediment to deployment, since the average user may not have the material means that allow him to perform day-to-day conversions, especially because technical weakness due to delayed transaction confirmation leads to more From time to other operations, during these few seconds, an unfair person can also make a second payment or the same amount to another user and get an unfair share, unlike conventional banks, which are partially insured losses to customers.
There is no doubt that the use of virtual currency increases the smuggling of money and used as a cover for money laundering operations and also expose users to electronic piracy, so the risk of using the currency large, but if organized by central governments or even the establishment of an international body to regulate and control Currency, duties, taxes and other protectionist measures, the virtual currency will be transformed into a fully secure currency that contributes to creating a new business environment that facilitates faster and safer trade operations.
The key elements that require development are the currency itself, including important and multiple design options, currency acquisition, preservation and conversion as part of financial operations, including financial means that can support such transfers as smartphones, adequate financial services for subsequent payment, To support all services in a secure and flexible manner.
In sum, the phenomenon of virtual currencies still needs to be studied in depth, given the precise technical dimensions; in addition to the strong need to adjust the conditions of this treatment and correct adaptation to them, as well as the exchange market of these currencies from other financial markets from being the most risky markets The risk is high in transactions where there is an increase - if not impossible - in predicting prices and value; they are left to uncontrolled uncontrolled factors, such as consumer tastes, making them volatile and highly ambiguous.
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