On Feb 9, 2021, Bitcoin (BTC) price soared to an all-time high of around Php 2.3 Million ($47,000). Yes, there’s no typo in there, it’s more than 2 million pesos. Interested? Here’s how to buy bitcoin in the Philippines.
So how did bitcoin reach its enormous value today? Well, let’s go back to the price history.
Table of Contents
Price History of Bitcoin
1 BTC to USD
No exchanges; users were mainly cryptography fans
less than $0.01
A man bought a pizza for 10,000 btc that would have been worth $448 million today!
Bitcoin valued at $1 (P50)
$350 - $1,242
Price rose from $350 (P16,000) in Oct to $1,242 (P59,000) in Nov
Broke $5,000 (P240,000) for the first time
$7,600 - $8,100
This surge of Bitcoin may be related to Zimbabwean coup d'etat
All time high; price reached more than $19,000 (P913,000)
Back to $3,300 (P158,000) 83% drop from previous year
230% increase in 19 months!
New all time high $34,800 (P1.6M)! 75% increase in 2 months!
New all time high $44,200 (P2.1M)! Price surged when Elon Musk announced $1.5 Billion investment to bitcoin and includes acceptance of bitcoin payments to Tesla
Bitcoin dropped to 50% in value at $18,958 (P1M) after 2018 due to war conflict between Russia and Ukraine.
Bitcoin started in Jan 2009 and it was created by a cryptographer with the pseudonym Satoshi Nakamoto. If you Google him you could not find a single verifiable source that would link him to any individual. Yes, it’s still a mystery why he chose to remain anonymous.
There are a lot of speculations as to who Satoshi Nakamoto is but none of them confirmed they’re identified as the Bitcoin founder.
Bitcoin’s value started with physically nothing. On May 2010, its value is around $0.01 (P0.48)! A man even bought 2 large pizzas from Papa John’s for 10,000 BTC! That would have been $448 million today! Think about that for a second.
More than 4 years later, it reached a value of $1,242 (P59,000)! And then, on Sep 2017 it broke $5,000 (P240,000) for the first time. It struck the $19,000 (P913,000) mark on Dec 2017 but one year later, it dropped back to $3,300 (P158,000).
I could still remember that time because I was mining Ethereum (ETH) back then and it was really painful because the ETH value dropped from P30,000 to P8,000!
However, after 7 months, in Jul 2020 Bitcoin bounced back to $10,944 (P525,000)! It’s worth noting here that Bitcoin continuously appreciates even with the pandemic going on and it always breaks records year after year!
On Nov 2020, it reached its new all-time high at $19,850 (almost a million at P953,000)! That value almost doubled after 2 months when on Jan 2021, its value peaked at $34,800 (P1.6 Million). That is a 75% increase in just 2 months!
But, things didn’t stop from there. On Feb 2021 Bitcoin reached yet another all-time high at $44,200 (P2.1 Million) when Elon Musk, the serial entrepreneur who founded Tesla and SpaceX, invested around $1.5 Billion in Bitcoin and started accepting Bitcoin payments for Tesla.
What is Bitcoin? How Does Bitcoin Work?
Bitcoin is a decentralized cryptocurrency. In layman’s terms, it is a digital currency or electronic money without a central bank or administrator and is protected by strong cryptography that could be used as a medium of exchange between two people.
Unlike any fiat currencies like the US Dollars, Swiss Francs, Euros, or Philippine Pesos, Bitcoin is not physically tangible. There are no paper bills or coins, it is purely digital and can only be stored thru a Bitcoin wallet.
There are no central authorities (like the Federal Reserve or Bangko Sentral ng Pilipinas) that govern the creation and exchange of Bitcoin. Rather, it relies on strong cryptography, with the help of computers, to validate millions of transactions every second.
Cryptography is about constructing and analyzing protocols that prevent 3rd parties or the public from reading messages. This is very important. Since no one is solely responsible for monitoring transactions, only computers with strong computational capacity can decode complex mathematical algorithms to validate transactions.
How to Buy Bitcoin in Philippines
To buy Bitcoin, Ether, or other cryptos, here are the steps that you can do.
1. Create a Bitcoin Wallet
You need to create a wallet first. This is where you store your crypto. This is very easy and you can do this automatically when you open a crypto or bitcoin mobile wallet. However, if you prefer to use a desktop wallet, you may do so since this is safer but is more difficult than a mobile phone.
2. Deposit Fiat Money Into Your Wallet
Once you created a bitcoin mobile wallet account, you can deposit your money to your mobile wallet.
3. Swap/Convert Your Fiat Money to Bitcoin or Other Crypto
Now you can exchange your fiat currency (for example USD, PHP, etc.) for any crypto that you want like Bitcoin. And that is it. It is easy and fast to own Bitcoin.
What is a Cryptocurrency
A cryptocurrency (or crypto) is a digital asset designed to work as a medium of exchange. Its transactions are stored in the blockchain or public ledger which is protected by strong cryptography to secure transaction records, control the creation of coins, and verify transactions.
Bitcoin, Ethereum, Litecoin, Bitcoin Cash, Ripple, and many others, are cryptocurrencies. They are developed independently from separate persons or groups of people. They may be designed for a different purposes but the main idea is that they are all decentralized which means no specific central authority controls the creation, monitoring, and distribution of coins.
A blockchain is a database or digital record of transactions. It stores data in terms of blocks and is connected/chained to each other hence called the blockchain.
It is worth noting that the blockchain is publicly available. You can browse how much BTC a certain wallet contains as well as the transactions. However, the most exciting feature here is that it promotes privacy as it doesn’t contain any name, email, address, or any sensitive information from the wallet owner.
Bitcoin, as an example, is the first cryptocurrency in history that uses blockchain technology. Here’s how it works.
The founder(s) created Bitcoin and decided how many Bitcoins are available for distribution. He then offers an initial coin offering (ICO). It’s similar to the stock market’s initial public offering (IPO) where a company goes public and looks for funds from investors. In this case, he’s also looking for investors who are interested to buy Bitcoins in exchange for fiat currencies.
The first few transactions of a cryptocurrency are called a Genesis block. This is the beginning of the distribution or transaction of crypto. The succeeding transactions then follow, created within a new block, and so on.
In Bitcoin, for example, there are 3,500 transactions for every block and 144 blocks are generated every day. That simply means a total of 504,000 (3,500 x 144) transactions are generated every day involving sending and receiving bitcoins. But since there are no central authorities, who will validate the transactions?
Well, this is the role of Bitcoin mining.
What is Bitcoin Mining? How to Mine Bitcoin?
There are only 21 million BTC available for distribution. Right now, Bitcoin’s market cap is almost a trillion dollars at around $987 Billion (21M x $47k). Around 18.5 million BTC are already circulating and only 2.5 million BTC are left to be mined.
Bitcoin mining is the process of validating transactions and at the same time generating new Bitcoins, thru a computer’s processing power. You either need a graphics processing unit (GPU) or an application-specific integrated circuit (ASIC) in order to set up a mining rig.
Through mining, you can earn Bitcoins without the need of converting fiat currency. You only need to invest an ASIC miner to mine Bitcoins. Miners get rewarded if they are the first people who validate block transactions in a form of a complex hashing puzzle.
If you have the mining power, which means you have a lot of computing capacity, you have a higher chance of completing the hash puzzle first and you’ll be rewarded with Bitcoins.
At the time of inception, the Bitcoin reward for every block was 50 BTC. The reward is halved every 210,000 blocks or approximately every 4 years. Right now, the BTC reward per block is 6.25 BTC which is very small as compared to 50 BTC but the value of BTC keeps on increasing so this is justifiable.
What is a Bitcoin wallet?
A Bitcoin wallet is like your digital wallet where your Bitcoins are stored. Your BTC wallet is identified by a wallet address which is a string of 26-35 alphanumeric characters and that is all it takes to send or receive BTC. It contains a private key for security and this key corresponds to the wallet address.
Types of Bitcoin wallets
There are 4 types of BTC wallets: mobile, web, desktop, and hardware.
Bitcoin mobile wallets
In the Philippines, there are quite a number of BTC mobile wallets for buying, sending, or receiving BTC. These wallets, in general, support other cryptos so you could jump on any altcoins that you wish to invest.
Mobile wallets are very convenient as you can buy and trade crypto on the go! I tried using these 4 wallets and tabulated the information I gathered. Here’s what I found.
For me, Abra has the best user interface among the 4 wallets. It is fast and easy to use. It also offers a low minimum deposit of P500. The functions are intuitive enough and you’ll never get lost in the app. Also, I love their “interest-earning crypto” feature where you can earn an average of 4% interest and it is paid weekly! Abra has the most crypto being traded so if you love altcoins, you are going to love Abra.
However, buying BTC is not that cheap as compared to Coins and it only allows you to cash out through your bank account or another crypto wallet.
If you like trading altcoins and you love various gift cards then you’ll probably love the edge wallet. There is a lot of crypto being traded on the platform. The app looks good and it’s easy to use.
You can cash in thru a debit or credit card and thru your crypto wallet. The minimum deposit of P2,500 is not that huge so everyone can join without friction.
Although this app is one of the winners in user experience, the only downside is the cash-out process. Currently, they only allow via a crypto wallet or gift cards such as 7-Eleven, Mobile Legends, Skype, etc. There isn’t enough flexibility in their withdrawal methods and not everyone likes gift cards. If bank transfer is added to their withdrawal options then I would consider using this app in the future.
eToro takes pride as the leading social trading platform. The number one feature that sets them apart from other crypto exchanges is their copy-trading capability. This means that you can find successful traders on the platform and copy their portfolios or trading activities. This is huge because you can interact with other traders on the platform itself – there is no need to go to Facebook or other social media sites.
Also, one of the tempting reasons to use eToro is that aside from crypto, you could also trade US-listed stocks, commodities, currencies, ETFs, and indices. If you’re an experienced investor with a diverse portfolio then eToro is there for you!
The caveat of this trading platform is that it needs a P10,000 minimum investment. This is quite a stretch as most of us prefer a minimum amount as much as possible. Apparently, this platform is intended for seasoned investors.
The pioneer e-Wallet in the Philippines is indeed one of the best mobile crypto wallets. I compared these 4 apps simultaneously and found out that Coins offers the greatest bang for your buck. Among the 4, it is the cheapest platform to buy BTC. Not only that, it has the lowest minimum deposit too at P15! Now nobody can beat that.
If you aren’t impressed yet, think about the convenience it offers as you can also send money to other e-Wallets like GCash, and Paymaya or perhaps pay your utility bills such as Meralco, PLDT, Maynilad, etc. This is truly unbeatable. The only downside for Coins is that it only offers 4 cryptos at the moment: Bitcoin, Ethereum, Bitcoin Cash, and Ripple. Sorry, Dogecoin lovers!
Bitcoin web wallets
I don’t really recommend using web wallets due to bad security. I would rather recommend mobile wallets, desktop wallets, or hardware wallets. But for the sole purpose of identifying this option, here’s what you need to know.
Web wallets are wallets that run on your browser similar to any other website. It isn’t safe because your private keys (which is your wallet password) are kept by a custodian (the person who owns the site) or are being encrypted with your password.
Unlike the other 3 wallet options, web wallets aren’t recommended because you are allowing someone to have access to your private keys. That is a big security threat and you might end up losing your crypto. That is not what we want to happen so we better run away from web wallets.
Bitcoin desktop wallets
Desktop wallets are more secure than mobile wallets because they are not prone to be stolen. In the Philippines, there are a lot of desktop wallet options. A word of caution, do not download any of these wallets from other sources other than their official website.
For a quick reference of these 4 wallet options, I created a table to compare them in terms of available platforms as well as features.
Electrum is the best overall wallet. Although the interface looks ugly like you’re in the 90s, it is one of the most robust and secure Bitcoin wallets out there. The interface looks simple but there are certain details that crypto beginners find daunting so it is not beginner-friendly.
The program is also open source which means a lot of developers participate to make the software safe and reliable. Since there are a lot of watchdogs on this software, this makes Electrum one of the safest wallets.
Exodus wallet is beginner-friendly and I strongly recommend this to friends who are just starting out with Bitcoin and crypto. I love the customizable skins, colors, and textures. The interface is pretty straightforward and at first glance, you would know exactly what to do and how to do it.
The only downside of this wallet is that it is not open source which means developers, to their liking, have the ability to add malicious code into the software without the knowledge of users. And since this program involves crypto or money, this would raise eyebrows among users.
But again if you are not comfortable using Electrum then this is the alternative wallet. Just make sure not to store large amounts of coins as the potential threat is always there.
Bitcoin is a full Bitcoin node. The other three wallets that I discuss here are all simple payment verification (SPV) wallets which allow users to verify that a transaction is included on the blockchain without the need to download the entire blockchain. They rely on other computers on the network to give them information about a transaction.
A full-node BTC wallet, on the other hand, means that you have to download the entire blockchain to your computer. Yes, that would be from 2009 until now! It could get pretty messy as the blockchain size is around a few hundred gigabytes and would take up significant space on your computer.
In my opinion, you don’t need to do this as you can easily use SPV wallets and they are perfectly fine.
If you are a hardcore crypto fan and you own more than 30 crypto and tokens, then the Atomic Wallet is for you. By far this is the best interface among the four and I love how it looks so easy even for beginners.
With your Atomic wallet, you can store more than 500 different coins and tokens! This wallet has the most comprehensive list of crypto being offered. This wallet also allows Atomic Swaps which enables you to exchange from one crypto to the other without the need for an exchange. This is truly amazing and I love this feature.
Bitcoin hardware wallets
Hardware wallets are the safest type of Bitcoin wallet in the sense that is “immune” from malware or any other form of hacking. It works offline so your private keys could never be hacked. It is a physical wallet that is so simple and its function is simply to store your keys and sign transactions.
A desktop wallet has an infinite risk of losing your keys and ultimately your coins. Say, for example, a program you are running contains malicious codes and steals your private keys, your Bitcoins will not be safe. A mobile wallet, on the other hand, is also not safe as you will lose your keys the moment your phone gets lost or stolen.
How do hardware wallets work?
First of all, hardware wallets are not free and you need to buy them. I personally recommend the two most trusted wallets: Ledger Nano X and Trezor Model T. These wallets have the most impressive reviews from crypto fans all over the world.
If you want to send a Bitcoin using a hardware wallet, this is how it goes. A hardware wallet is an extremely simple device and it could only sign transactions. Thus, you need a computer or a mobile phone to perform transactions. And with that, you need to install a program that will serve as a “bridge” between your hardware wallet and computer.
Once a hardware wallet received a transaction from the bridge program, it signs it on the hardware wallet and sends back the information to the bridge program. And that’s it, you are now sending BTC. The only thing that gets transferred between your hardware wallet and bridge program is the unsigned and signed transaction.
This is the flagship hardware wallet of Ledger and it supports more than 1000+ crypto assets. Aside from your computer, you could also connect Ledger Nano X to your mobile phone via Bluetooth.
The company behind Ledger has a great reputation and they have been around for years now. It’s a trustworthy company and they have gained its reputation through its high-quality and safe hardware wallets.
To access your Ledger wallet, you need to install a program called Ledger Live, which is a bridge program, that allows you to send and receive crypto across your ledger devices. Ledger Nano X costs around $119 without VAT (free shipping included).
Trezor was the first company to come up with an idea of a hardware wallet. And one of the company’s founders, Marek “Slush” Palatinus, created the first Bitcoin mining pool in 2010. So it is fair to say that they are the market veteran and its reputation is rock solid as compared to Ledger.
The only downside about Trezor wallets is that it always deletes the whole wallet every time you upgrade the wallet’s firmware. This is pretty annoying and most beginners would freak out but as long as you have the backup phrase ready and available, you can easily restore the wallet.
Trezor Model T is kind of a more advanced hardware wallet. It has a large touch screen and this is more advantageous, especially during setup or when you restore your wallet. Trezor Model T costs around $170 without VAT.
Pros and Cons of Cryptocurrency
I discussed a lot of good things about crypto but you have to consider also the dark side of owning one. Here are the pros and cons of cryptocurrency including Bitcoin.
Protection from inflation
Inflation reduces the purchasing power of physical currencies. In the Philippines, inflation averages 3% every year, which means that your earnings reduce their value over time.
Every cryptocurrency, on the other hand, has a limited and finite amount of coins released since the time of its launch. Bitcoin, for example, is programmed to have a fixed amount of 21 million Bitcoins. Right now, there are 18.6 million Bitcoins being circulated and only 2.4 million BTC left to be mined. Hence, as demand increases, its value also increases. Crypto will keep up the market and beats inflation in the long run.
Massive potential for returns
As mentioned, cryptos have a limited supply. While the demand increases, its supply decreases. As an effect, its value appreciates continuously over time. That is what is happening now. As more and more people buy BTC, its value increases and achieves a new all-time high.
If you bought P50,000 worth of BTC on Jul 2020, in 7 months that would be worth P151,500 right now! But what about other cryptos? Well, other cryptos are not that valuable as compared to BTC. With due diligence of research, you could earn by trading or purchasing shares of initial coin offerings (ICO).
Secure and private
Privacy and security are the main purposes of cryptocurrencies. You may be able to hold millions or billions worth of BTC and nobody will know. This is because you can create as many wallets as you want and it is NOT traceable to their owner. You can only see the transactions of that wallet address on the blockchain, but there is no way to trace the owner of that wallet. No emails, names, or transaction details are connected to the wallet.
The blockchain is extremely hard to decode. It is encrypted with complex hashing puzzles that only a computer with high computing power can decode. Although there were instances of hacking and security breaches in the past, it is very minimal. As a result, developers keep on improving the code to make it safe and robust.
Currency exchange is easy
With a lot of crypto exchange and mobile wallet options, exchanging your crypto is so easy. Notwithstanding the fact that a lot of merchants now accept crypto payments, it is becoming acceptable worldwide in any country.
Fast funds transfer
Unlike interbank transfers which normally take 24 hours, the crypto transfer is relatively fast and gets cleared within a few minutes. This makes it so convenient and instant to send money from the US to the Philippines, for example.
Can be used for illegal transactions
Bitcoin and other crypto have a bad rap because of illegal transactions involved. Again, due to the anonymity of users, it is being exploited by cybercriminals as a medium for ransom, drug dealing, and other illegal activities. Bitcoin is also rampant in various marketplaces on the dark web.
High volatility and price fluctuations
Crypto is riskier than the stock market and its price is totally volatile. While it is very rewarding when the value appreciates, it is extremely risky on the other side and you would end up burning your money in the worst cases. Thus, you need to be monitoring the market movements so you can act quickly if unforeseen situations happen.
Data loss means financial loss
According to a report, around $140 Billion worth of Bitcoins are lost or cannot be accessed due to account lockouts or forgotten private keys. This is really scary and it could happen to anyone. Keeping your passwords safe from hackers is the most important thing to do especially if your crypto assets are of significant value, but making sure that you don’t forget your passwords is another thing.
Adverse effects of mining on the environment
Mining is the lifeblood of the crypto community. Crypto operates with miners and it wouldn’t run without a network of computers validating global transactions.
Some people say that a single block of Bitcoin uses energy that is enough to power your house for a week! That single block alone which contains 3,500 transactions, could be mined in 10 minutes.
As Bitcoin’s value soars to $55,000 (Php 2.5 Million), a lot of people are investing in crypto mining farms. These mining farms have tens of thousands of GPU or ASIC miners which consume a lot of electricity. As the demand for electricity increases, the carbon footprint also increases as electricity sources use coal, natural gas, and petroleum.
No protection from fraud or hacks
I’m one of the victims of fraud/scams. At one time I sent 1 ETH to a certain firm that promised to return 2 ETH as part of their promotion. I was so ecstatic, I sent it and then nothing came back. I begged them to return it to me but there was no response at all. Later I found out that that fraudulent firm scammed a lot of people and its ETH wallet address was tagged as a phishing wallet. I know, I was so dumb.
So that’s my story and the sad thing is that I couldn’t ask for help from someone and no one can help me. If it were a bank transaction, that would be easy to retract as I could just go to the bank and report the scammer’s bank account.
But in the case of crypto, there are no central authorities so you’re all on your own and you should always think twice before you act anything stupid.
Crypto has a huge potential for earning and it should be considered as part of your investment portfolio. Therefore learning how to invest in cryptocurrency is vital for investors. There are some risks, yes, but if you act safely and make sure your account’s secure, nothing bad happens. Investing is kind of a complex game but the big upside to that is massive returns on your investments.
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