Nepal Police recently arrested some people involved in Bitcoin and Cryptocurrency trading. Bitcoin, Ethereum, Blackcoin are examples of such currencies. They are new generation online digital currency. Globally the scenario is changing and many people are attracted to it. Some are investing because it shows bright future, security and trust. Nepali people are also mining, trading and investing in such currencies. But currently, Nepal Rastra Bank has stated them as illegal.
NRB states the trading of these currencies illegal. CIB is prosecuting under the NRB Act of 2058. Many people are interested toward this new technology. The main reason above all is rising price. The price is rising exponentially since last five years. Traders make money be selling and investing in such coins.
These are digital so there is no physical existence whatsoever. Mining is the process of generation of such coins. The value however is related to real physical world money. Many countries see the future in cryptocurrencies due to security and paperless transaction. Global Graphics card price hike and crisis is also caused by excess purchase from miners.
It all seems good to hear but NRB is making this illegal because it is very hard to regulate this. Nepalese people mainly tech lovers are very furious about this policy. This whole new cryptocurrency is based on concept called Blockchain. Its root theme is in decentralization.
This makes it hard for Central banks to regulate the transactions. When people start trading in such digitally unregulated way, government can’t enjoy tax. Next reason is that, it is illegal to send money out of country electronically for now. Basically, this is the main reason of banning such activities. Many global industry leaders are attracted towards this technology. Central bank of many countries are looking into this in-order to integrate the technology.
People, business, industries are starting to embrace this rapidly. Many tech leaders see it as the inevitable future. The reasons mainly include decentralized system, security and cross checks. There are many sensitive things related to this technology. But the pros outweighs cons easily.
How Cryptocurrency Mining Works?
We mentioned Bitcoin mining and many people don’t know how the value or money is generated. People say that computer generates them. Well there needs to be something, some value addition or work to have a value in such coins. Simply the answer is computer does some calculation and the coin is generated.
In simple words, blockchain system consists of cross checks. Whenever a transaction is done, the details or records are sent to network. This Peer 2 Peer (P2P) system has computers which keeps records or such actions. This needs resource like processing and electricity. For doing this resource demanding tasks, mining computers are awarded money. As stated above, as all computers in network get the record, fraud and forgery also can’t be done which provides security.
There are benefits in this new technology. This is why whole word is now embracing this. But in Nepal, it is currently illegal. Our advice is to be a law abiding citizen and follow the rules. The penalty includes triply fine and 3 years jail time. Maybe in future, the NRB becomes flexible and releases the claw. Surely, Nepali system will adapt the new technology in future. For now, lets all just follow the system.