Crypto for Dummies: All You Need to Know About Crypto in the Philippines
Almost a decade ago, digital financial innovations like GCash were virtually unheard of. Bank transfers and remittances meant long queues at banks and malls. It also often spelled more than a few days “clearing time,” where you would think that your money was passed around in limbo. Today, fintech developments like these have become part of everyday life, even more so essential during lockdowns and community quarantines because of the pandemic.
At present, the use of cryptocurrency and earning in cryptocurrency has been limited to a minority of Filipinos who have access to the knowledge and technical expertise regarding its use. Others have even fallen victim to get-rich-quick schemes and scams that have solicited investments through the misrepresentation of Bitcoin. While the need to use cryptocurrency and the technology that powers cannot yet be considered mainstream, the Philippines ranks as one of the most crypto-friendly and crypto-ready nations among a global community.
Capitalizing on the capacity for profit from investing in Bitcoin is but one aspect of cryptocurrency. Crypto presents possibilities for revolutionizing financial transactions as we know it. So where do we start?
Most prospective traders and investors or anyone who has just picked up the term Bitcoin and cryptocurrency would want to know the answers to the following common questions.
What is it?
How does it work?
Is it legal?
Who can take part in it?
While the name crypto suggests mystery and secret information, the answers to these questions are the opposite of hard to find. After all, cryptocurrency represents public access and inclusion on a scale that many would even consider counter-cultural. After all, while no one knows who created Bitcoin, the forerunner of all cryptocurrencies and cryptocurrency technologies today, the innovation he, she, or they have created have become a paradox for transparency and anonymity. The screen name of the person or persons who publicly released the software in 2009 was Satoshi Nakamoto.
Cryptocurrency is a form of digital currency that is not government-backed, unlike the US dollar or the Philippine peso.
Not unlike the Philippine peso, cryptocurrencies like Bitcoin, which is just one out of many cryptocurrencies, can be used just like any other currency. It can be used to pay for goods and services, remitted to friends and family, and has a value that is equivalent to other currencies. Unlike the Philippine peso, cryptocurrencies are digital currencies. They do not take the form of cash or physical coins and its value and supply are not dependent on a national bank, unlike fiat or government-backed currencies.
Because of this, cryptocurrencies are decentralized, with no oversight from a government or private institution, available for use across any national border. The security that users rely on in the absence of such regulations is in the method of cryptography that ensures that the amount of money you have, spend, and trade─all of which are pieces of data─are accurately represented on a network.
Cryptocurrencies are created and stored in this network, called a blockchain.
Blockchain is a public ledger where transactions, like cryptocurrency trades, can be recorded as blocks of data that are permanently added to the chain.
The blockchain network is a database, where data can only be added. Previously encoded data cannot be amended. Its security is attributed to cryptography and certain algorithms that make it virtually impossible to alter the blockchain to the sole knowledge of the one who does so. Naturally, financial transactions are but one aspect of the capacities of a blockchain network. In the Philippines, service providers ranging from those in the power sector to real estate have been exploring blockchain-based platforms. Moreover, universities have begun developing research labs for further applications.
The Philippine government regulates cryptocurrency exchanges but the public and private sector have started utilizing blockchain technology.
The main objective of why the Philippine government, through the Bangko Sentral ng Pilipinas, aims to regulate the establishment of cryptocurrency or virtual currency trading platforms─also known as exchanges─is to discourage money laundering and protecting citizens from cryptocurrency scams. This caution has not stopped the BSP and other government agencies from exploring how to use blockchain technology to better and further their services for the Filipino community.
Finally, anyone can start cryptocurrency trading.
Anyone with access to a secure internet connection, a device like a smartphone or a laptop, some basic proof of identification─trading in a cryptocurrency exchange may mean having to submit personal information as required by anti-money laundering regulations─can start investing in cryptocurrency. Trading is also not the only way to receive Bitcoin and other cryptocurrencies. Some institutions pay for services in tokens and you can even win some from gaming platforms.
But, cryptocurrency exchanges are where the bulk of cryptocurrency trading happens. Have you chosen one yet? Log into one today and buy crypto now.
Since its launch in October 2019, Binance’s P2P platform has supported approximately 31 fiat currencies, including the Philippine Peso. It was also able to process trades of more than $1 billion. For their Global P2P Merchants Program, the company now actively searches for local merchants with reliable crypto and fiat access. Here, verified merchants enjoy a lot of benefits—exclusive support for customers, VIP discounts, ad transactions and postings, and security deposits without any fees.
With its zero transaction fees, Binance offers an escrow service—which aims to ensure that all of the cryptos will go to the users’ wallets. Its P2P platform also lets users gain more access to various financial services, likespot, margin, lending, and futures trading of Binance.com.