This topic is increasingly appearing in the media, and not just those reporting on finances.
Almost everyone has heard about so-called cryptocurrencies
Still, many do not understand how this market works and what exactly cryptographic currencies are. Their popularity and public access mean that some identify them with the traditional measure of value, i.e. currency.
In today’s text we will answer the most common questions related to this matter. We will also consider whether cryptocurrencies can be collateral for loans, i.e. are loans against cryptocurrencies possible?
Cryptocurrencies, because of their diversity and fairly abstract model of functioning, are black magic for people who are not interested in this issue. Many wonder if, at a time when they begin to be equated with real value, are they considered as such by banking and non-banking institutions granting loans and credits?
What are cryptocurrencies?
Despite the growing popularity, they are still a bit mysterious concept. They do not function in the legal system, they do not have one official definition, many supporters, but also opponents.
Some refer to them as virtual money. Meanwhile, cryptocurrencies are a distributed accounting system that stores information about the state of ownership in contractual units. They are based on peer-to-peer networks. The system is not controlled in any way, nor does it have a central base.
How do cryptocurrencies work?
Cryptocurrencies are acquired through the exchange of transactions. Elements of the network are simply people who use it. Everyone belongs to the so-called cryptocurrency wallet, which has assigned the appropriate units owned by the user. Each unit can have only one owner who has a so-called private key to it.
When describing the entire process of cryptocurrency emerging, it is impossible not to mention their extraction. It involves the use of cryptocurrency excavators, i.e. simply electronic equipment such as a computer or graphic card. The most important in this regard is the use of the computing power of these devices.
The most popular cryptocurrencies
The market is developing dynamically. The statement that there was a cryptocurrency craze in the world will not be exaggerated. Many see cryptocurrencies as a source of wealth. New cryptocurrencies are being extracted every now and then. Anyone can become their creator.
The most famous is of course bitcoin, introduced in 2009 by a person or organization nicknamed Satoshi Nakamoto. Other cryptocurrencies that achieved a total capitalization of $ 5 billion at the end of last year are, among others: litecoin, ethereum or ripple.
Has the world accepted cryptocurrencies?
Most countries do not recognize cryptocurrency as a means of payment or a type of money. So it is a mistake to identify it with the traditional currency.
You can look at it from two perspectives. First, thanks to the fact that cryptocurrency is not a monetary unit, its extraction is legal. On the other hand, in a given country and market, there is no legal force, and hence, nothing can be bought for it.
The collateral of the loan may, of course, be a pledge or mortgage. And what about the situation when we want to use the cryptocurrencies we have for this purpose? Platforms offering this type of service can be counted on one hand.
For many experts from the economy market, bitcoin or ethereum is a bubble that will burst soon. It is similar with all financial products with which cryptocurrencies are associated in any way. Institutions that grant loans against cryptocurrencies should in particular be sought in the United States.
What is the situation in Poland?
In our country, cryptocurrencies have been approached for a very long time with great reserve. Some time ago, the media reported that some banks operating in Poland are closing the accounts of cryptocurrency trading companies.
In accordance with the regulations of these institutions, such practice is tantamount to violation of the principles of the bank account agreement. Cryptocurrencies are often equated with illegal or unethical activities. Importantly, banks close their accounts to companies operating cryptocurrencies, and not to private clients who run this type of business.
Lack of supervision
Cryptocurrencies have bad press in Poland that companies do not offer loans against their collateral. The Polish Financial Supervision Authority periodically appeals to management boards of banks or owners of non-banking institutions for common sense and caution. He also points out that cryptocurrencies are not an official measure of value, much less a currency.
Will it be possible to pay with cryptocurrency?
It will certainly be possible in the near future. In particular, bitcoin is likely to become a full means of payment. If such times come, it will probably also be possible to pledge cryptocurrencies as a form of security for the liability.
Will we see it in Poland? The current policy regarding this system shows that it will take a long time for changes in this area. And certainly longer than in the West.