By The Bit: A Study on Bitcoin Usage in the Philippines Submitted by: Calangian, Sherlyn R. De Dios, Ian Joshua T. De Guzman, David Miguel R. Fernandez, Marianne Camille A. Rutor, Unagh Rose B. Sanchez, Zeus Keyns E. Tejada, Loudette Remirose C. Submitted to: Prof. Erik Paolo Capistrano
I. Introduction Ever since Satoshi Makamoto’s paper was published on cryptocurrency and the first ever of its kind was mined, the Bitcoin industry has grown to a total of 16,355,360 Bitcoins in circulation. With its 1906 US-dollar value today, May 19, the Bitcoin industry is valued at 31 billion US dollars. (coindesk.com, 2017) The value of the industry will definitely and significantly change by tomorrow. The system, with the absence of a centralized authority, is driven by trust, supply and demand, speculations and other socioeconomic factors that drive people to accept this currency as any other. The nature of Bitcoin poses many questions on why it is readily accepted by many and how it functions and sustains itself without any centralized server. While other virtual currencies have gradually come to the full understanding of the public, Bitcoin, despite its large market, does not have the same situation. In the Philippines, only a total small part of the population use the currency: medium and small-scale businesses do not generally accept them as payments, nor do majority of Filipinos use the currency. In this paper, the group tries to understand the nature of Bitcoin and identify the factors surrounding its current acceptability, use, and public perception in the Philippines. II. Virtual Currency A. Definition Virtual currency, also known as virtual money, is a type of uncontrolled, digital money, which can be traded digitally and acts as (1) a legal tender and/or (2) a unit of account and/or (3) a store of value without any legal jurisdiction (“Virtual Currencies”, 2014, p. 4). Unlike regular money, it is not issued by a central bank or any authority. B. Types of Virtual Currency 1. Convertible (or Open) Virtual Currency and Non-convertible (or Closed) Virtual Currency: It has a proportionate value in real currency and can be substituted back-and-forth for real currency (“Virtual Currencies”, 2014, p. 4). Examples include Bitcoin; e-Gold, Liberty Reserve, and Second Life Linden Dollars. Non-Convertible (or Closed) Virtual Currency is designed to be specific to virtual communities or world and under the rules governing its use. In contrast to the convertible virtual currency. it cannot be exchanged for fiat currency (“Virtual Currencies”, 2014, p. 4). Examples include: League of Legends Points
2. Centralized Virtual Currency vs. Decentralized Virtual Currency Non-convertible virtual currencies are centralised in nature. By definition, closed virtual currency are issued by a central authority that authorizes rules causing them to be non-convertible (“Virtual Currencies”, 2014, p. 5). In contrast, convertible virtual currencies can further be classified into two sub-types: centralised or decentralised.
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- Spring '19