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ALRAQABA . ISSUE 15
as a ledger that records all transactions and
holds the value of cryptocurrencies inside the
blockchain wallet of a user’s account on the
network until needed for future transactions.
Users should first register to the Blockchain
network in order to start sending and receiving
funds using their digital wallets.
This digital ledger is managed by “miners”.
Those parties shall be responsible for updating
the ledger following each cryptocurrency
transaction. Miners should also verify data
and ensure proper and secure processing of
each transaction with the aid of high-powered
computers.
Digital accounts are super professional and
secure. The accounts are very difficult to be
hacked as long as the user has his/her own
strong password, which shall not be shared with
anyone else. Upon registration of the accounts
on the Blockchain network, cryptocurrencies
may be earned through a very complex
process, generally referred to as “mining”.
Mining of digital currencies:
“Mining” refers to the process over which digital
currencies are earned via the internet using free
software to perform complex and documented
algorithmic operations. The user needs to
solve a sequence of mathematical and rational
steps (i.e., algorithms) to detect a long series
of numbers and letters. The mining process
requires fast-processing devices, such as
modern computers or servers usually used by
major companies.
Blockchain miners shall install and run special
mining software on their personal computers.
The mining software shall be connected to
the cryptocurrency network while being used.
Afterward, the computer will start performing
complex calculations and decoding the block.
The digital currency will then be produced and
converted to an asset in a digital fund wallet in
order to be used via the internet, just like any
other currency across the world.
Blockchain technology:
The blockchain serves as an immutable digital
ledger for recording economic and financial
transactions as well as any other valuable
assets. Those transactions are encrypted under
a block, which shall then be clumped and linked
with other blocks to form a blockchain.
This technology involves a range of servers
and computers responsible for confirming
transactions performed by individuals using
special software and a database. This database
shall include the history of all transactions
conducted in this particular cryptocurrency.
It is noteworthy that both the National Bank
of Kuwait (NBK) and Kuwait Finance House
(KFH) have adopted Blockchain technology
and joined the RippleNet. This gesture enables
bank clients to promptly perform cross-
border financial transactions using digital
techniques with greater accuracy and lower
remittance costs.
Pricing mechanism for cryptocurrencies:
Similar to the pricing of stock exchange shares,
the market prices of cryptocurrencies are
entirely derived by market forces of supply
and demand. The pricing is determined by the
active purchases taking place around the clock
and across the entire world.
Theme Four: Legal aspects of trading with
crypto /virtual /digital currencies
(1) Countries banning crypto / digital currencies:
The law in many countries, such as Russia,
China, Bolivia, Iceland, India, Ecuador, and
Research
