Gotangco: Is PH ready for Bitcoin and cryptocurrency?

By Jerome Gotangco

Last year, a new technology buzzword became mainstream: cryptocurrency. And with it a hot product called Bitcoin.

In a nutshell, cryptocurrency is a digital medium of exchange that is designed to be a replacement of money in its current physical form and can be used not just for online, but physical transactions as well (imagine using your phone to pay for an item at a convenience store but what you paid in digital form is widely accepted as money and not just tied up with a bank or credit card account).

In simpler terms, cryptocurrency is a new form of money designed for the digital economy. Except that only the community of users who believe on that Bitcoin is driving the value, not like traditional fiat money.

Bitcoin started in 2009 but only became wildly popular (and getting more valuable) in 2012 when intrepid online stores started accepting them as payment. Since the transaction or payment charges for Bitcoin is way smaller than that of a bank, it makes more sense for retailers to use it.

Of course, any currency is only useful if it can be equated in value with an existing, globally accepted form of exchange, in this case the US dollar. As of January 21, a single Bitcoin (or BTC) is worth $963 in the market (from Mt. Gox exchange in Japan). Its possible to own only a fraction of a Bitcoin with a Satoshi as the smallest fraction equivalent to 0.00000001 BTC (or in simpler terms, 100,000,000 Satoshi = 1BTC).

What is amazing with Bitcoin is that all this value is being driven by the community of users in the Internet, with very little intervention from governments and monetary authorities.

Because of Bitcoins decentralized nature, there is no governing authority over it except the actual community of Bitcoin users itself who dictate demand and supply in a global scale thanks to the Internet.

But its decentralized nature is also Bitcoins weakness (and cryptocurrency in general): it is highly susceptible to fluctuation in value.

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Gotangco: Is PH ready for Bitcoin and cryptocurrency?