Can Bitcoin Revolutionize Your Wallet?
If you’ve been anywhere near the internet for the past year, you’ve probably heard of Bitcoin, the internet cryptocurrency. And in the last 12 months, Bitcoin has been making a splash in the Filipino market, with online wallets launching in the country. More and more merchants in the Philippines are accepting Bitcoin as payment, from cupcakeries to even funeral homes.
But how can Bitcoin revolutionize your wallet? We interviewed Ron Hose, CEO of the Bitcoin exchange company coins.ph, and asked him the most important questions about Bitcoin that you need to know the answers to. Below, read on to find out exactly what Bitcoin is, how you can use it to skip the middleman and send remittances without any fees, and how Bitcoin can help the 75% of Filipinos with limited access to traditional financial services.
So what the heck is Bitcoin anyway?
“Bitcoin is a digital currency that makes it possible to transfer money over the internet without going through banks or credit card companies,” says Hose. Because of its status as “virtual currency”, it is not issued or guaranteed by a central bank. The value of 1 Bitcoin (BTC) against a “real” currency can change dramatically, from $130 (P5,847) in May 2013 to $1250 (P56,225) in November 2013 to $367 (P16,700) in November 2014.
But what really makes Bitcoin appealing is the possibilities for innovation on the platform, which you can read more about in a bit. “Just as the internet decentralized information, the system powering Bitcoin is decentralizing trust,” Hose says.
How many pesos in a bitcoin?
At the time of writing, you can buy 1 BTC for P16,700. But you don’t have to buy one whole bitcoin: if you only want P500 worth of bitcoin, for example, you can buy 0.029980 BTC.
What advantages does Bitcoin have for the Filipino consumer?
- Fewer fees when sending money. Remittances made through Bitcoin are almost instantaneous (they take around 10 minutes, usually) and have very low fees, unlike services like Western Union which charge a percentage on the money you’re sending. “There’s a strong need to make the whole system for sending and receiving money more efficient. Bitcoin is stepping in to give people a better option. The huge market means that the new technology could bring a real and immediate impact to Filipinos,” Hose says.
- No bank accounts needed. Bitcoin helps those who don’t — or can’t — have bank accounts send and receive money with ease. With Bitcoin wallets like coins.ph, you can easily send Bitcoin online, and pick up your money from major banks (for no fees, and with no account needed), outlets like Cebuana Lhuillier or LBC (for a small fee), or even via 2GO Quikcash or Globe GCash (also for a small fee). You can also easily convert Bitcoin to pesos through Bitcoin wallets or online exchanges like BuyBitcoin.ph. An increasing number of merchants now accept Bitcoin online, so you can pay for purchases directly with Bitcoin without having to convert to pesos, and without a credit card.
- Financial services for the unbanked. Filipinos are on their cellphones all the time — their money being accessible from their cellphones as well would be a great fit. “You see many people in the provinces who have little access to basic services, yet check Facebook on their Android phones every day,” Hose says. “As a digital currency, Bitcoin could extend financial services to these people in a scalable way. Once it becomes more mainstream, it could also unlock its potential as a quick and easy way for Filipinos to pay for online purchases.” For those people who can’t access banks or lack the funds for an initial deposit, Bitcoin could be a real alternative. Companies like 37coins are trying to bring this technology to the Philippines.
What are some examples of Bitcoin usage?
- Cheaper, faster international remittances. This is the main use for Bitcoin in an economy like the Philippines’. If someone from the US wanted to send $1,000 (P44,980) to the Philippines via Western Union, they’d have to pay $9.00 (P404.82) if it’s for pickup at agent location, and $50 (P2,249) if they deposit it into the recipient’s bank account (which then takes three days to process). Sending the same amount in Bitcoin (2.7280 BTC) has no fees if it’s delivered to a recipient’s bank account (and takes 8 business hours to process) or via Smart Money, and P400 if the M Lhuillier Kwarta Padala method is chosen.
- Easier, safer payments for buyers AND merchants. While the number of merchants currently accepting Bitcoin is still quite small, three big merchants are already testing out Bitcoin: Bench, CashcashPinoy, and Metrodeal. For small businesses looking for a fast, safe way to receive payments, companies like bitmarket.ph allow anyone to accept payment in Bitcoin and receive it in Philippine pesos the same day, bypassing the need for credit cards or bank accounts.
- Speculation for those with high risk appetites. The volatility of Bitcoin makes it exciting for investors. Bitcoin can have high return potential, but because it’s still in its infancy, there are a lot of risks involved, and anyone seeking to invest in Bitcoin should educate themselves before diving in.
What is holding Bitcoin back in the Philippines?
- Difficult technology. Around the world, it’s mostly early adopters who have taken to Bitcoin, with their greater knowledge of technology. For the regular person, getting started on Bitcoin isn’t easy. Before Bitcoin wallets were available, there wasn’t an easy way for people to store Bitcoin and convert them to pesos. Now it’s getting easier, but there are still barriers to entry, like internet access.
- Low market awareness. According to Hose, “many people haven’t heard much about Bitcoin beyond the widely-publicized collapse of Mt. Gox and the shutdown of online black market Silk Road.” If people don’t know what something is, they’re obviously not going to use it. But now, with more Bitcoin wallets and services, it’s becoming easier for people to use Bitcoin, and it’s got great potential to become widespread.
- Trust. If something involves money, it naturally involves trust. “That will take some time to build,” Hose says. Since Bitcoin is still pretty new to the Philippines, it’s going to take a while before consumers and merchants trust it enough to use it for transactions.
How can Bitcoin succeed despite these setbacks?
For Bitcoin to succeed in the Philippines, focus should be put on the benefits Bitcoin could bring for Filipino users. “We’re solving a pain point that is real. 75 percent of Filipinos have limited access to any form of financial services. If they want to send or receive money to relatives, they have to pay very high fees to middlemen. The Philippines is traditionally seen as a follower and not a leader for new technologies, but it could change for Bitcoin.”
What’s the future of Bitcoin in the Philippines?
“We want Bitcoin to be recognized by the mainstream population as a superior option for remittances,” Hose says. “Money transfer is the low-hanging fruit, but ultimately our vision for Bitcoin is to provide the benefits of financial services to the unbanked without the hassle and the costs.”
Hose is optimistic about the future of Bitcoin in the Philippines. “Eventually, we want the Philippines to be a leading example of Bitcoin usage worldwide, a template for how digital currency can be used to accelerate financial inclusion and make people’s lives easier.”
Leave your comment