If dissected word for word, cryptocurrency comes from the word cryptography which means secret code and currency which means currency. In other words, cryptocurrency is a virtual currency protected by a secret code.
In simple terms, crypto money is a currency that has quite complex secret codes that function to protect and maintain the security of this digital currency.
Definition Of Crypto Money
Quoted from Investopedia, crypto currency is digital currency that is guaranteed by cryptography, which makes it almost impossible to counterfeit or double spend.
Cryptography itself is a method used to protect information and communication channels through the use of code.
The concept of cryptography has actually existed since World War II. At that time, Germany used cryptography to send secret codes so that they were not easily read by the allies.
This use of cryptography makes the use of cryptocurrencies very difficult to manipulate. In other words, cryptocurrency cannot be counterfeited.
Many cryptocurrencies are a decentralized network based on blockchain technology. Blockchain itself is a "ledger-like technology that is distributed and enforced by a network of different computers.
How Cryptocurrancy Currency Work
There are three keys attached to how cryptocurrency works, namely digital, encrypted, and decentralized.
This means that it is not the same as conventional currencies such as US dollars, Euros and even Rupiah. Crypto is not issued by any central authority, which makes it theoretically immune to government interference or manipulation.
Thus, the task of controlling and managing this currency is fully held by crypto currency users via the internet.
Bitcoin is the first cryptocurrency. The principle of cryptocurrency has been explained by Satoshi Nakamoto in an article entitled "Bitcoin: Peer to Peer Electronic Money System" which you can access via the bitcoin.org page.
In the article, Nakamoto describes the cryptocurrency asset project as an electronic payment system that is based on cryptographic evidence, so it's not just trust.
The cryptographic evidence exists in the form of transactions that are verified and recorded in a program called the blockchain.
Crypto Currency Types
If you are interested in trading cryptocurrency assets or crypto money, you need to know in advance, that there are at least 10,000 types of crypto currency currently being traded.
However, currently some countries do not apply the term cryptocurrency. This is because the term tends to think of crypto as a digital currency that can be used as payment. In fact, not all countries accept crypto as legal tender.
So far, the country that has legalized crypto as a means of payment is El Salvador. Many other countries are still struggling with crypto regulation.
In Indonesia alone, there are 229 crypto investment assets that have been registered with the Commodity Futures Trading Supervisory Agency (Bappebti).
The following are the most popular types of crypto currency or have the largest market capitalization in US dollars, namely :
• Bitcoins
• Ethereum
• Binance coins
• Cardano
• Dogecoins
• Litecoins
Each of these crypto assets has unique characteristics. Like crypto bitcoin which is a crypto currency with the largest market capitalization or valuation in the world. At present, the total bitcoin market valuation has reached US$671.78 billion or around IDR 9,673.63 trillion (exchange rate of IDR 14,400).
The second order of the crypto money market is ethereum. Actually, ethereum itself is a software or software based on a blockchain network that can be accessed freely or open source.
Well, this blockchain network-based application has a crypto asset called ether. The ethereum software was created to extend blockchain uses beyond bitcoin and can be used for a wider range of applications.
Unlike bitcoin, which is limited in number, the supply of crypto ethereum is not limited. Currently, ethereum is trading around 2,200 US dollars per chip.
Some countries consider crypto as an investment asset or can be called a crypto asset. In Indonesia alone, crypto is considered a commodity that can be traded.
Crypto has been declared legal in Indonesia since 2019 by the Ministry of Trade (Kemendag) through CoFTRA. Even though it is legal, crypto in Indonesia is considered a commodity that can be traded, not as a means of payment.
The CoFTRA regulations stating that crypto trading is legal in Indonesia are listed in CoFTRA Regulation Number 5 of 2019 concerning Technical Provisions for Organizing the Physical Market for Crypto Assets on the Futures Exchange.
Conversely, crypto is prohibited or illegal as a means of payment referring to the regulations in Law no. 7 of 2011 Concerning Currency which in the articles explains that the currency issued by the Unitary State of the Republic of Indonesia (NKRI) is called Rupiah.
In Indonesia, based on data from the Ministry of Trade, until the end of May 2021, the number of investors in cryptocurrency assets or cryptocurrencies has reached 6.5 million people. This number has increased by 50 percent compared to 2020, which was 4 million people.
Cryptocurrency is a digital asset designed to work as a medium of exchange that uses strong cryptography to secure financial transactions, control the creation of additional units, and verify asset transfers.
MUI Fatwa Regarding Crypto Currency
The Indonesian Ulema Council (MUI) officially forbids the use of crypto money or cryptocurrency as currency. The legal fatwa on crypto money was ratified at the VII Indonesia-wide Ijtima Ulama Forum.
As a consequence of the MUI's haram fatwa, crypto money is illegal to trade. Cryptocurrencies are considered to contain gharar, dharar, and are contrary to Law (UU) Number 7 of 2011 and Bank Indonesia Regulation Number 17 of 2015.
One of the reasons why the MUI forbids crypto is that cryptocurrencies are gharar, that is, they have something that is uncertain.
That is an explanation of crypto currency and its explanation.
Source : https://www.cnbcindonesia.com
