LESSON 2:

 Cryptocurrency or virtual/digital currency is any type of digital

unit that is used as a medium of exchange or a form of digitally stored
value generated by agreement within the community of virtual currency
users. It is referred to as "digital gold." It is also calle d "altcoiris."
Cryptocurrency is digital money-it is virtual and has no physical form.
 Fiat currency or cash, on the other hand, is the real currency.
Coins and.. paper money (bills) issued and printed by the central bank of
a country are fiat currency, fully-backed by the government of a country
and is acceptable as payment for public and private debts.
 E-money is a digital representation of fiat currency stored in
digital wallets or e-wallets. Any amount of currency stored in an electronic
wallet (such as GCash, PayMaya, Coins PH, GrabPay, and the like) is e-
money, which can also be accepted as a "card payment" or can be
withdrawn right away as cash.
 Cryptocurrencies work through blockchain technology. Blockchain
is a special kind of database, a “distributed ledger” or a “global ledger”
built on a data structure known as “blocks.” Blockchain allows all
participants to view the records and all the changes that happen in the
database. Your transaction data will be stored in a block, which is
 technically a list of other transactions made by other people. The block
where your transaction is listed will then be chained to previous blocks.
Cryptocurrencies use electronic coins as their form of exchange, which are
nothing more than slots in the blockchain.
 Cryptocurrencies use cryptography, the process of protecting
information by using codes, for security. It is also used to control
transactions and increase the supply. With this feature, cryptocurrencies
have become self-governing and self-regulating. It provides routine escrow
mechanisms that could easily be implemented to protect buyers.
 However, having no intrinsic value, there are also significant
risks associated with cryptocurrencio intrinsic value, there are also
signifers. The more users a coin has, the more useful it becomes, and the
higher its price goes. Cryptocurrencies only serve to transfer wealth from
one party to another. But when a coin falls out of favor, there is nothing to
stop it from going to zero and that is the risk.
 China has already developed a Central Bank-backed crypto, and
in the US it was discussed as part of the C-19 stimulus. In other words,
unregulated cryptocurrencies will one day compete against state-
sponsored ones, too.
 When it comes to cryptocurrency exchange websites, however,
centralization remains a core concept. Centralized exchanges are run by
companies that manage and earn revenue from transactions on the
platform.
 Decentralized cryptocoin markets run through a blockchain
relying on a peer-to-peer protocol. So trading altcoins is done through
dozens or even hundreds of independent nodes and masternodes.
Transactions occur only when the nodes come to a consensus based on
the exchange’s verification rules.

UNDERSTANDING VIRTUAL CURRENCIES

 Virtual currencies are a form of digital currency. They are issued

by private parties, such as a group of developers or organizations, and are
intended only for online use they do not have a physical incarnation like
paper money. Thus, they are different from digital representations of
central bank-issued currency, also known as central bank digital Currency
(GBDC).
 The term virtual currency came into existence in 2012, when the
European Central Bank (ECB) defined it to classify types of “digital money
 in an unregulated environment, issued and controlled by its developers
and used as a payment method among members of a specific virtual
community.” The Internal Revenue Service (IRS) in the United States
describes virtual currencies as “digital representations of value that
function as a unit of account, a store of value, and a medium of
exchange.”
 Both definitions, though broad enough to encompass multiple
attributes of virtual currencies, may not be entirely correct today.
 The universe of currencies that may be considered virtual has
expanded considerably since 2012 to include various forms of money that
do not adhere to the ECB’s definition of the term. For example, certain
cryptocurrencies, which are considered a form of virtual currency, like
Ripple’s XRP, are not strictly controlled or used by a virtual community.
 Virtual currencies have also failed to take off as a payment
method or medium of exchange in mainstream society. They have
restricted usage, sometimes in gaming communities and other times as a
speculative investment asset. Whether they have emerged as a store of
value, like gold, also remains questionable.
 There’s also the question about regulation. Though virtual
currencies remain unregulated in the vast majority of financial
jurisdictions, that situation is slowly beginning to change. Bitcoin, the
cryptocurrency with the biggest market capitalization, is legal tender in El
Salvador.
 In the United States, home to the world’s most sophisticated
financial markets, virtual currencies are unregulated. But regulation is
seriously being considered by authorities. The trading watchdog Securities
and Exchange Commission (SEC) wants to bring cryptocurrency
exchanges under its supervision. Regulation for stablecoins, another form
of virtual currency, is also in the cards. The IRS taxes trades that involve
certain types of virtual currencies, such as cryptocurrencies.

Types of Virtual Currencies

Depending on their operating network, virtual currencies are classified as

follows:

 Closed virtual currency

A closed virtual currency, as the name suggests, operates in a

controlled and private ecosystem. It cannot be converted into another virtual
currency or into a real-world fiat currency. Examples of closed virtual
currencies are currencies in gaming systems. Though such currencies can be
used in their respective environments (in this case games), they cannot be
converted into real-world cash. Another example of closed virtual currencies
is airline miles. They are issued by private parties, can only purchase
additional miles, and cannot be converted into their associated monetary
value

Advantages of Virtual Currencies

 The advantages of virtual currencies are as follows:

 Virtual currencies do not have expensive manufacturing and physical
storage costs.
 The technology rails of virtual currencies increase transaction speeds
and eliminate geographical boundaries.
 Decentralized virtual currencies can eliminate intermediaries during
monetary transactions and establish a direct connection between two
transacting parties.
 Virtual currencies can be programmed to complete automated
transactions. For example,-[Link] on Ethereum’s blockchain
can hold and release money in escrow accounts without human
intervention.
 Virtual currencies are digital repositories of value and can assign value
to disparate sets of objects, from gaming tokens to artwork

 Electronic money refers to the currency electronically stored on

electronic systems and digital databases used to make it easier to
transact electronically. It is popularly referred to by many names,
including digital cash, digital currency, e-money, and so on.
 Fiat money, simply put, is a legal tender, whose value as a
currency is established by an issuing government and consequently, is
also regulated by it.
 Electronic money can be classified into two broad categories:
hard and soft.

ADVANTAGES OF ELECTRONIC MONEY

Electronic money offers several advantages for the global economy,

including:

1. Increased flexibility and convenience

The use of electronic money brings increased flexibility and convenience to
the table. Transactions can be entered into from anywhere in the world, at
any given time, with one click of a button. It removes the hassle and
tediousness involved with the physical delivery of payments.

2. Historical record

The usage of electronic money is becoming increasingly popular because it

stores a digital historical record of each and every transaction made. It
makes tracing back payments easier and also helps with making detailed
expenditure reports, budgeting, and so on

DISADVANTAGES OF ELECTRONIC MMONE

Electronic money comes with the following disadvantages:

1. Necessity of certain infrastructure

To use electronic money, the availability of certain infrastructure is

necessary. It includes a computer or a laptop, or a smartphone, and a stable
internet connection.

2. Possible security breaches/hacks

The internet always comes with the inevitability of possible security breaches
and hacks. A hack can leak sensitive personal information and can lead to
fraud and money laundering.

3. Online scams

Online scamming is also possible. All it takes for a scammer is to pretend to

be from a certain organization or a bank, and consumers are easily
convinced to give away their bank/card details. Despite the increased
security and presence of authentication measures to counter online scams,
they are still something to be looked after.

 Blockchain technology is an advanced database mechanism that

allows transparent information sharing within a business network. A
blockchain database stores data in blocks that are linked together in a chain

How Does a Blockchain Work?

  You might be familiar with spreadsheets or databases. A
blockchain is somewhat similar because it is a database where
information is entered and stored. But the key difference between a
tradifional database or spreadsheet and a blockchain is how the data is
structured and accessed
 A blockchain consists of programs called scripts that conduct the
tasks you usually would database. Entering and accessing information and
saving and storing it somewhere. A blockchain is distributed, which means
multiple copies are saved on many machines, and queuer they must all
match for it to be valid
 The blockchain collects transaction information and enters it into
a block, like a cell in a spreadsheet containing information Once it is full,
the information is run through an encryption algorithm, which creates a
hexadecimal number called the hash
 The hash is then entered into the following block header and
encrypted with the other information in the block. This creates a series of
blocks that are chained together

Bitcoin Mining
 The process of verifying transactions on the Bitcoin blockchain by
solving mathematical puzzles, for which miners are rewarded with new

bitcoin.
LESSON 3: INTERNATIONAL BUSINESS ENVIRONMENT

WHAT IS THE INTERNATIONAL BUSINESS ENVIRONMENT?

 The International Business Environment (IBE) refers to all

the external factors that influence businesses operating across national
borders. These factors differ from one country to another and affect how
companies produce, market, finance, and manage their operations
internationally.
 Unlike domestic businesses, international firms must deal with
different governments, cultures, laws, currencies, and economic systems.

SIMPLE DEFINITION

 The international business environment is the collection of

external conditions, influences, and institutions that affect companies
doing business in foreign countries.

WHY IS UNDERSTANDING THE INTERNATIONAL BUSINESS ENVIRONMENT

IMPORTANT?

 Businesses expanding internationally face many opportunities and

risks.

Importance
 Helps companies identify business opportunities.
 Reduces business risks.
 Improves decision-making.
 Helps companies comply with foreign laws.
 Builds competitive advantage
 Improves relationships with international customers.