VIRTUAL CURRENCY.pdf

VIRTUAL CURRENCY CRYPTOGRAPHY Cryptography is the foundation of virtual currencies, securing transactions and protecting data. It involves encoding information with algorithms, making it unintelligible without a decryption key. This ensures the integrity and privacy of transactions. ...

VIRTUAL CURRENCY CRYPTOGRAPHY Cryptography is the foundation of virtual currencies, securing transactions and protecting data. It involves encoding information with algorithms, making it unintelligible without a decryption key. This ensures the integrity and privacy of transactions.  Fiat money vs. E-money FIAT MONEY E-MONEY Fiat money is goverment-issued currency E-money is a digital money stored that is not backed by any commodity. It electronically. It is a form of digital derives its value from the government’s payment that represents value stored in guarantee and the trust of the people. a digital form. Examples include PayPal, Examples include the US dollar, the Euro, Venmo, and Apple Pay. and the Japanese Yen. VIRTUAL CURRENCY EXCHANGES The Philippines has witnessed a surge in popularity of virtual currency exchanges, with several platforms operating within the country. These exchanges offer a wide range of services, including spot trading, margin trading, and derivatives trading. The Bangko Sentral ng Pilipinas (BSP), the central bank of the Philippines, regulates virtual currency exchanges. The BSP has issued guidelines for virtual currency exchanges, requiring them to obtain a license, comply with anti-money laundering regulations, and ensure robust security measures. ANTI-MONEY LAUNDERING (AML) AND DATA SECURITY AND PRIVACY KNOW YOUR CUSTOMER (KYC) COMPLIANCE Exchanges are required to implement strict Exchanges must maintain secure systems to AML and KYC procedures to prevent money protect customer data and prevent laundering and terrorist financing. unauthorized access. FINANCIAL TRANSPARENCY AND CONSUMER PROTECTION REPORTING Exchanges are required to maintain Exchanges must adhere to consumer transparent financial records and submit protection regulations, ensuring fair and regular reports to the BSP. transparent trading practices. BLOCKCHAIN TECHNOLOGY The blockchain is a distributed ledger that records transactions in a secure and transparent manner. Each block contains a record of transactions and is linked to the previous block, creating a chain of data that is difficult to alter. HOW CRYPTOCURRENCIES WORK ON THE BLOCKCHAIN Cryptocurrency transactions occur on the blockchain through peer-to-peer networks. Users can send and receive cryptocurrency by creating transactions that are validated and added to the blockchain.  Centralized vs. Decentralized Cryptocurrencies CENTRALIZED CRYPTOCURRENCIES Centralized cryptocurrencies are controlled by a single entity or organization. The entity has the power to make decisions and manage the currency's supply and distribution. DECENTRALIZED CRYPTOCURRENCIES Decentralized cryptocurrencies are controlled by a network of users. Decisions are made collectively through consensus mechanisms, and the currency's supply is often governed by a predefined algorithm.  TOP 6 5-STAR RATED DIGITAL CURRENCIES 1. ETHEREUM (ETH) 4. STELLAR (XLM) 2. BITCOIN (BTC) 5. CARDANO (ADA) 3. RIPPLE (XRP) 6. DOGECOIN (DOGE) Ethereum: The Programmable Blockchain Ethereum is a decentralized platform that enables the creation and deployment of smart contracts and decentralized applications (dApps). Its blockchain technology allows for secure and transparent execution of code. Bitcoin: The Pioneer of Cryptocurrencies Bitcoin is a decentralized digital currency that operates on a blockchain network, providing a secure and transparent system for peer-to-peer transactions. It was the first cryptocurrency to gain widespread recognition and adoption. Ripple: The Global Payments Network Ripple better known as XRP, is the “odd duckling” of the cryptocurrency world, but XRP is the largest currency to have 10x potential for 2021. It is a global payments network that facilitates fast, low-cost international transactions. It uses a consensus mechanism to validate transactions, ensuring their speed and security. Stellar: The Financial Inclusion Platform Stellar is the fifth biggest in the top six 5-star cryptos in terms of market capitalization. Stellar is a blockchain platform designed to facilitate financial inclusion, providing a fast and low-cost way for individuals and businesses to send and receive money across borders. Cardano: The Sustainable Blockchain Cardano is a proof-of-stake blockchain platform that emphasizes sustainability and research-driven development. It aims to address scalability, security, and energy efficiency concerns. Dogecoin: The Lighthearted Cryptocurrency Dogecoin is a cryptocurrency that started as a meme-inspired project. It's known for its active community and playful nature. Despite its lighthearted origins, Dogecoin has gained significant popularity and value.