Our latest article “Blockchain Technology, Cryptocurrencies and their legal status in Turkey” by Sera Somay and Ceylan Necipoğlu is published on Lexology.
Blockchain technology is one of the driving forces of the recent digitalisation trend. Blockchain technology refers to a distributed ledger system where each transaction is engrained in a digital “block”, the succession of which form a “chain” information which cannot be altered, corrupted or deleted retrospectively. In addition to storing data in a secure form, other advantages of the blockchain system is that it is decentralised and transparent. These advantages make blockchain ideal for use in financial transactions based on cryptocurrencies.
Cryptocurrency is an encrypted string of data or a “hash”, encoded as a unit of currency.1 The cryptocurrency phenomenon begun with Bitcoin, defined as a “peer-to-peer electronic cash system” by its founder Satoshi Nakamoto.2 Bitcoin is a cryptocurrency (or a digital coin) based on blockchain technology. Currently, the market of blockchain based cryptocurrencies is developing rapidly.
Unlike the technical advantages presented by blockchain technology, its legal qualification remains ambiguous. With respect to application of blockchain technology, while some countries are explicitly against the use of cryptocurrency, in many others the use thereof is not regulated.
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