Cryptocurrency (commonly known as “crypto”) is a digital payment system that does not rely on verification from any central monetary authority, like a bank, or the government.

The currency being traded isn’t physical like ordinary currency, instead, it exists only as a digital entry stored on an online database that records transactions. It’s called cryptocurrency because it’s created using cryptographic processes that allow users to purchase, sell, and trade them safely.

How it works

Cryptocurrencies run on the “blockchain”, a distributed public database that keeps track of all transactions and is updated by currency holders. Cryptocurrency “coins” are created through a process known as mining. Which involves using a computer’s processing power to solve complex mathematical problems that generate the currency.

This doesn’t mean that you have to mine your own cryptocurrency. You can buy your own cryptocurrency from the available brokers and exchanges and then store it in a crypto wallet. The crypto wallet can either be your own personal wallet which you maintain and keep safe yourself, or a third-party wallet which is hosted by a third party, usually the exchange that you’re using.

Examples of known cryptocurrencies

The cryptocurrency that started it all is Bitcoin (BTC). Its current price is PHP 1,893,039.32. Founded in 2009, Bitcoin was the first cryptocurrency and is still the most commonly traded.

Ethereum (ETH) is the most popular cryptocurrency after Bitcoin. Ethereum was developed in 2015, and is a blockchain platform with its own cryptocurrency, called Ether (ETH) or Ethereum. Its current price is PHP 136,578.50.

Binance, one of the biggest crypto exchanges in the world, issued their own cryptocurrency called Binance Coin (BNB). Its current price is PHP 18,862.20.

A much more affordable cryptocurrency is Cardano (ADA), which was created by the co-founder of Ethereum. Cardano is the cryptocurrency platform behind ADA, the name of the currency. Its current price is PHP 53.13.

One of the cryptocurrencies with a more interesting history is the Dogecoin (DOGE). Originally created as a joke after the run-up in Bitcoin, Dogecoin takes its name from an internet meme featuring a Shiba Inu dog. Unlike many digital currencies limiting the number of coins in existence, Dogecoin has unlimited issuance. Its current price is PHP 7.07.

The volatility of the crypto market

The cryptocurrencies used as an example in the earlier segment were worth much more last year, with BTC peaking at PHP 3,127,999 just last November. However, its current price is still incomparable to its price in 2011, where it was worth roughly $1.

If you’ve been following crypto for a while, you’d know that this is nothing new. The prices of crypto tend to heavily fluctuate, with some cryptos like DOGE going from PHP 0.18 then spiking up to PHP 30.37 within just a few months. From this, we learn that good times don’t always last, and DOGE gradually crashed down to its current value of PHP 7.07.

Another good example would be the Smooth Love Potion (SLP) cryptocurrency, which comes from the game Axie Infinity. It rose up from PHP 0.3 in 2020 to PHP 17.24 in 2021, and now it’s worth PHP 0.47.

Where you can invest

If you’re interested in purchasing crypto in the Philippines, there are many places to start. Known crypto exchanges provide easy ways to buy and sell different types of cryptocurrency as well as providing you with your own crypto wallet. They also allow you to move crypto to and from your online wallet, although some charge a fee for doing so.

A good place to start is Binance. Binance is an extremely accessible and user-friendly platform and has been in operation since 2017. It offers a wide selection of trading options and has lower fees compared to other exchanges, but they’ve gotten into regulatory trouble in several countries, so access to the site is restricted in certain parts of the world.

You can also try Coins.ph, which is a local crypto wallet that is regulated by the Bangko Sentral ng Pilipinas (BSP). This wallet is very convenient for living in the Philippines as it allows you to pay bills, buy load, send/receive money, as well as allowing you to purchase and store cryptocurrency.

Another crypto exchange is Coinbase. It’s a very popular exchange for cryptocurrency, which is very accessible and supports a large amount of cryptocurrencies. They even insure your cryptocurrency in case the site gets hacked, but because of this, their transaction fees are a bit on the higher end.

If you’re interested in investing in cryptocurrency, take the volatility of the market into account, and know when to cash out.