Waqar Zaka, popular social media icon, recently took to his Facebook page to declare his love for Bitcoin in a discreetly Photoshopped image. However, this isn’t the first time Zaka has expressed his interest in cryptocurrency. He has been posting about Bitcoin on social media since last year, urging people to start investing in it. He has also been regularly conducting live video sessions guiding people on Bitcoin and other cryptocurrencies.
This past weekend when most of us were indulging delicious BBQs, Waqar Zaka was setting up a cryptomining rig in the UK. As we’ve explained before, Bitcoin/Crypto mining is sort of like digging for gold and bringing it to the market. Bitcoin mining requires high-powered computers and can take several weeks before you’re able to discover a new Bitcoin. Nonetheless, people are it and markets have seen a significant surge in the sales of GPUs as a result.
Waqar Zaka’s setup in London will allow him to mine Ethereum, another kind of cryptocurrency.
Waqar Zaka has also promoted OneCoin despite the fact that he has been known to call it a scam in the past. He even joined the OneCoin OneLife network, the announcement for which was made on the OneCoine Pakistan page.
A large understanding among people is that OneCoin is a cryptocurrency when the truth is completely different. It is essentially a Ponzi scheme disguised as a cryptocurrency with its own blockchain. OneCoin has been surrounded by controversy since its inception. A few weeks ago its promoters were fined 2.6 million euros in Italy and authorities in Germany have banned it completely and in India, regulators declared it a Ponzi scheme.
Earlier this month, undefeated boxing champion Floyd Mayweather endorsed the Initial Coin Offering (ICO) for Hubii Network and Norway-based telco Telenor also expressed its interest in Blockchain. While the hype around cryptocurrencies has reached a peak, we advise you to keep your eyes open and learn as much about it as you can before investing. Earlier today, we even shared a feature that gives a detailed guide on how to invest in Cryptocurrency wisely.
To understand more about Blockchain, Bitcoin, how they are created, and how to buy/sell them in Pakistan, read our detailed guides on Cryptocurrency in this section.
In the wake of the cryptocurrency boom, Waqar Zaka emerged as a cryptocurrency advocate and began using his social media influence to demand the legalization of Bitcoin in Pakistan with an ongoing hashtag trend – #cryptokolegalkaro. The famous ‘Living on the edge’ host has since gone on to establish a crypto mining operation in London, promoted a controversial cryptocurrency – Onecoin, and established a paid Facebook group to assist aspiring crypto investors with the so-called “trading signals.”
Waqar Zaka also filed a petition in the Supreme court to legalize cryptocurrency in Pakistan while also crediting himself for the legalization of cryptocurrency in KPK. However, one of his recent statements includes claims that Pakistan could have become a debt-free country in December 2020 had the government chosen to invest Rs. 1 crore (10 million) in Bitcoin in April 2016.
In a YouTube video titled, “Waqar Zaka ROCKED | Government Shocked,” he called it a once-in-a-lifetime opportunity and that the government had missed this golden chance of freeing the country of its debt. Waqar Zaka made a comparison of the Bitcoin prices between both periods and used the 100% gain in the currency’s valuation as a basis of his claim.
Farooq Baloch, a business journalist at SAMAA Digital, has disproven Waqar Zaka’s claim with a math-based factual analysis. The journalist analyzed several scenarios based on the price quoted by Waqar Zaka to see whether buying Bitcoin at that price could have resulted in a profit substantial enough for Pakistan to pay off its debt.
1- Buying Bitcoin at $268 for 1 crore PKR
The Bitcoin was priced at 1 BTC = $268 in April 2016, which reached $5,310 in March 2020. However, the dollar price in April 2016 was $1= Rs. 105/-. Buying Bitcoins at the prices in 2016 would mean Pakistan could purchase 356 BTC 35, for Rs.1 crore or $ 95,238, considering the exchange rate.
But, 356 BTC X 5,310 (Bitcoin’s price in 2020) = a profit of only $1.9 million, not even close to the gigantic amounts Pakistan owes to foreign entities, including the IMF. According to Farooq Baloch, Pakistan’s debt stood at $70 billion, and the Bitcoin profits Pakistan could have made represent only 0.03% of that amount.
Apart from the timeline given by Waqar Zaka, even if we take into account the Bitcoin prices in Dec 2020 or Feb 2021, the resulting profits still fall short of Pakistan’s total debt.
2- Buying Bitcoin at $268 for 1 billion PKR
Since Waqar Zaka had also suggested investing a larger amount to generate greater profits, another scenario was also tested. Once again since 1 BTC = $268 on April 2016 and $1= Rs. 105/-, Pakistan could have purchased 35,537 BTC for Rs. 1 billion considering the exchange rate of Rs.1 billion = $9.5 million at that time.
But, considering 35,537 BTC X $51,500 (Bitcoin’s price in Feb, 2021) = a profit of only $1.8 billion, representing a mere 2.5% of Pakistan’s debt.
Waqar Zaka’s theory of using Bitcoin investments to pay off Pakistan’s debt is not supported by basic math, even in the best-case scenario. It may appear to be feasible if we consider larger amounts such as $10 billion or $100 billion. Still, it might not be possible for a government to invest such vast amounts of taxpayer money in a volatile digital currency that has yet not seen full acceptance worldwide.
According to Farooq Baloch, Waqar Zaka declined to comment on the findings and stated that he had answered these concerns multiple times.
To understand Blockchain, Bitcoin and how to buy/sell them in Pakistan, read our detailed guides on Cryptocurrency in this section.
Source: SAMAA Digital
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