Digital Currencies' Possible Effects and Impact on ADSAC Students'

Financial Awareness

A Research Paper

Presented to the

Faculty of the Junior High School Department

ACADEMIA DE SAN AGUSTIN CALBAYOG – INC.

Calbayog City

In Partial Fulfillment for the Course

Requirement in Research

Researcher:
Sean Maverick U. Jao

DATE OF SUBMISSION

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 Digital Currencies' Possible Effects and Impact on ADSAC Students'
Financial Awareness

Chapter 1

Background of the Study

A cryptocurrency is a digital or virtual currency that denotes a unit of

currency. This cryptocurrency can be exchanged online for a variety of goods

and services. It is monitored and organized by a peer-to-peer network called a

blockchain (TrendMicro, n.d.). The blockchain also serves as a secure ledger of

transactions like buying, selling, and transferring. Now, an NFT or Non-Fungible

Token is a currency similar to cryptocurrencies. An NFT is a digital asset that

links ownership to unique physical or digital items, such as works of art, real

estate, music, or videos (DeNicola, 2021). Most NFTs are also bought using

cryptocurrencies, so these two things are interrelated. The main difference

between the two is that NFTs cannot be traded for each other as they are unique

representations of real-world assets. Meanwhile, cryptocurrencies can be traded

for one another and there will be no loss to their value.

This study helps identify the importance of digital literacy in the digital

world, and to raise awareness to ADSAC students (Al Sanots, 2017). The results

of this study should show that digital literacy should be further exposed to the

JHS students, in preparation for technological advancements in the digital

environment. Another topic worth discussing are digital currencies. Digital

currencies are currencies that are only accessible with computers or mobile

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phones because they only exist in electronic form. Digital currencies do not have

physical attributes and are available only in digital form. Although digital

currencies do not have physical attributes, they have utility similar to that of

physical currencies. They can be used to purchase goods and pay for services.

(Frankenfield, 2022).

It is also worth noting the different risks and benefits of engaging

ourselves in digital currencies. Though cryptocurrency is deemed to be a risky,

speculative investment, if you already own it or are planning to buy, experts

agree that a buy and hold strategy is usually the best practice. (Locke, 2022). But

this strategy has its pros and cons. One of its pros is that simply it works. Quite

simply, the buy and hold strategy had been prove time and time again to return

exponential gains on invested capitals. A list of the top buy-and-hold practitioners

is a veritable who’s-who of the greatest investors of all time. Warren Buffett, Jack

Bogle, John Templeton, Peter Lynch, and along many others are examples of

successful investors who practice the buy-and-hold strategy. Buy and hold, and

investing in general, is what is taught in academia and various portfolio

management curriculums, because B&H is based almost entirely on fundamental

analysis (Tun, 2021).

In connection to the buy-and-hold strategy, one of the cons of digital

currencies is that it takes time to grow. Buy and hold is entirely time-intensive.

Even if you have held the asset for 10 years, it does not mean that you are

entitled to a large reward for your time and capital invested. Market crashes are

also common in the crypto currency market. While solid, well-selected stocks can

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and have bounced back, there are stocks that go down for the count and wipe

out a portfolio in the process. (Tun, 2021).

According to the Bank of England Quarterly, digital currencies could, in

theory, serve as money for anybody with an internet-enabled device, at present

they act as money only to a limited extent and only for relatively few people. This

implies that digital currencies maybe the new norm for making purchases not

only online but also in the real world. This further solidifies the relevance of digital

currencies and why it should be a part of this generation’s curriculum.

Considering all this, digital currencies are a worthwhile investment and

should be taken in consideration when looking for other alternatives in digital

banking and online transactions.

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Statement of the Problem

This study aimed to determine the possible risks and benefits you may gain

going into NFTs and cryptocurrencies. Specifically, it sought to answer the

following:

1. What are the possible effects in investing into these digital currencies?

2. How relevant will this knowledge be to ADSAC students in terms of

financial awareness and digital literacy?

3. Do the students of Academia De San Agustin understand the concepts of

digital currencies?

Significance of the Study

NFTs and cryptocurrencies are very valuable resources not only in the

crypto market but in different digital transactions made online. One reason that

may be the cause of this is because of its fungible characteristic. This fungibility

characteristic makes cryptocurrencies suitable for use as a secure medium of

transaction in the digital economy. NFTs shift the crypto paradigm by making

each token unique and irreplaceable, thereby making it impossible for one non-

fungible token to be equal to one another (Sharma, 2021).

The NFT and cryptocurrency space is huge. In it thrives a community

where people invest time, share ideas, collaborate, support, and buy into each

other’s projects. In simple terms, it is an online community that come together

around a core concept like cryptocurrency where you can discuss anything.

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There are different types of cryptocurrency communities out there. Each specific

community only discuss specific things like specific coins and topics.

Cryptocurrency communities work very similarly to online communities in the

sense that they also utilized the pre-existing framework laid down on the internet

in the form of platforms, social media platforms, and other avenues of discover-

ability (Quora, 2019).

School

NFTs and cryptocurrencies will play a huge role in a school when it comes

to teaching students about digital literacy and financial awareness. Students will

be more financially aware when it comes to digital currencies and it will teach

them about the different processes that goes into online transactions and

purchases.

Community

Digital currencies have helped communities in small areas around the

globe. Local currencies are a special from of digital cash that are used for

payments within a contained geographical area. They are made feasible today

with the aid of blockchain technology that assures their security, solves the

double-spend problem and offers incentives for consumer participation. They can

be attractive for small businesses, encouraging members of the community to

engage in commercial transactions within the area. Consumers are motivated to

support local merchants, while enjoying a simple way to pay and the possibility of

earning rewards based on cryptocurrency (Shaw, 2018).

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Researchers

One of the contributions made by digital currencies and NFTs to our

researchers is the transformation of our monetary system. Since the first

cryptocurrency, Bitcoin, introduced in 2009, many new developments have

challenged the use of traditional payment instruments and financial contracts.

Current examples include Diem (former Libra), an initiative led by Facebook to

challenge national and international payment arrangements, the USD Coin, the

official coin of the crypto exchange Coinbase, and other private sector initiatives

that are attracting ever more investment and rattle traditional financial regulation

(Digital Currencies Academy, 2022).

Scope and Delimitation

This study focuses on the students of Academia De San Agustin

Calbayog. This study will involve surveying and gathering information about the

student’s knowledge and interests when it comes to online banking and digital

currencies.

This research is designed for ADSAC students to have a better

understanding of what it means to invest into these digital currencies and to

address any problems they may face exploring this topic.

Limitation

Digital Literacy

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To understand digital currencies and how they work, the respondents must have

prior knowledge of the digital world and the online sphere. Without background

knowledge, some terms and concepts discussed may not be fully understood

and must need further explanation.

Uncertainty of the Respondents

The general consensus is that NFTs and cryptocurrencies are risky and is an

unstable source of income. This may scare the respondents and make them

skeptical of the study. This will cause less possible respondents for the sample

survey and make the study less reliable.

Unstable Connection

Unstable connections and slow internet speeds have always been a problem,

especially here in the Philippines. This doesn’t change when tackling digital

currencies. To access the sites needed to view the crypto market, you will need a

stable connection. Without a stable connection, it will be difficult to observe the

market and check for any changes in the values of the different digital currencies.

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Definition of Terms

Blockchain – a system in which a record of transactions made in bitcoin or

another cryptocurrency are maintained across several computers that are linked

in a peer-to-peer network.

Buy-and-hold Strategy – is a passive investment strategy in which an investor

buys stocks and holds them for a long period regardless of fluctuations in the

market.

Cryptocurrency - a digital currency in which transactions are verified and

records maintained by a decentralized system using cryptography, rather than by

a centralized authority.

NFT – or non-fungible token, is a one-of-a-kind digital asset that belongs to you

and only you and cannot be replaced with anything else.

Paradigm – a typical example or pattern of something; a model.

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Related Literature

International

Modern electronic payment systems rely on trusted, central third parties to

process payments securely. Recent developments have seen the creation of

digital currencies like Bitcoin, which combine new currencies with decentralized

payment systems. As with money held as bank deposits, most financial assets

today exist as purely digital records. This opens up the possibility for distributed

ledgers to transform the financial system more generally (GP Dwyer, 2015). This

shows that online security for digital currencies is now becoming on par with

physical banking. Slowly, digital banking will take over physical banking, and

digital currencies may become the staple for making online transactions.

Any currency must prevent users from spending their balances more than

once, which is easier said than done with purely digital currencies. Current digital

currencies such as Bitcoin use peer-to-peer networks and open-source software

to stop double spending and create finality of transactions (R Ali, J Barrdear, R

Clews, 2014). Similarly, to the first article both authors agree that Bitcoin and

other digital currencies have the same level of digital security as real, physical

banking. This shows that almost all risks of digital currencies and digital banking

has been reduced and is always improving with the passing years. We can say

that digital banking in a few years from now we’ll be secure and open to many.

That’s why learning about the importance of digital currencies and digital literacy

is as relevant as ever.

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Research Design

This study used both qualitative and quantitative research techniques that

were employed. A descriptive research design was suitable to study and

investigate how many students in ADSAC are knowledgeable about digital

currencies.

Firstly, the study took place in a real-life situation, which implied that the

process (determining the possible risks and benefits of digital currencies) is

connected to the setting (ADSAC) and cannot be separated. This connection and

inseparability show that the researcher has no control over the flow of events.

Secondly, digital currency is an on-going process, which means that the

process of determining the possible risks and benefits of digital currencies was

relatively new. This opened up opportunities to develop the study and allowed

lessons and findings found from the research to be used in the formulation of

theories and hypotheses.

The application of a descriptive research design in the formulation of a

hypothesis made it an essential research design, making it a key ingredient to

answer the many different hypotheses about digital currencies, and to disapprove

existing hypotheses.

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 Descriptive research design also gave a new perspective on many

different variables found in the research which could be worth testing in a

quantitative manner. Therefore, by taking a descriptive research design in a

quantitative way, it was useful in figuring out which hypotheses were worth

testing.

Under descriptive research design, this study employed the use of survey

research design and historical research design. Survey research design entailed

collecting data from the school’s population to determine the current state of the

variables in the population, and historical research design to determine other

variables in past researches that may be useful in the study.

Time and Locale of the Study

This study was conducted in the vicinity of Academia De San Agustin

located in Brgy. Matobato, Calbayog City, Samar. The respondents were the JHS

students of ADSAC.

Respondents of the Study

The respondents of the study were the JHS students of ADSAC with ages

ranging from 13-19. The survey was held face-to-face through distribution of

questionnaires.

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Population

The participants of this study were the JHS students of ADSAC. The

researcher distributed surveys to 40 people. They were selected from each of

their class, where the researcher would come into contact with them. They were

handed face-to-face and the participants were asked to fill out the survey. Most

of the respondents were people who the researcher was familiar with. The

respondents were told to complete the survey immediately and send it as soon

as they can.

Research Instrument

The tools to be used in the collection of data from the sample selected

was surveying by use of survey, observation, and questionnaires.

Questionnaire Design

The researcher took into consideration all the key factors needed to create

a good design for the questionnaire. The questionnaire design is something very

crucial because the validity and reliability of the data which will be collected and

response rate depends on the design and structure. Each question has to be

planned carefully and crafted in a way that the respondents can easily

understand and does not intimidate them. The researcher also kept in mind to

avoid any technical jargons or phrases that may confuse the respondent. The

author proofread and reviewed the questions multiple times to make sure that it

is clear and does not contain any grammatical errors.

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 The questions were carefully planned and written with the help of the

statement of the problem, following the researcher’s objectives and aims, so that

relevant questions will be made, essential to collecting the right data. The

researcher focused on right data, because irrelevant data gained from the

questionnaire is useless and will not aid to the objectives of the research.

The flow of the questions was arranged in a way that each question

flowed smoothly and correlated to one another, in a way that does not confuse

the respondent. The first few questions were mostly general and got more

specific in the leading questions.

Questionnaire Distribution

The researcher decided to distribute the questions through the use of a

survey questionnaire. This was the most effective and readily available way to

collect data easily and efficiently.

Constraints

The questionnaire was designed in a way that respondents could easily

understand the questions and it worked well with other students. However, some

respondents were hesitant to answer because of their uncertainty and the doubts

that came into their mind because of the topic of the research. Although the

questions were crafted in a way that doesn’t intimidate the respondent, this is

something that cannot be avoided.

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Data Gathering Procedure

The researcher sent the survey questionnaire face-to-face through the

teachers. The researcher thought that sending the questionnaires face-to-face

would be more efficient in distributing the questionnaires because not everyone

has a computer/laptop to be used to answer the questions. Another factor to

consider is that distributing these surveys face-to-face would be more time

efficient, since these can be distributed easily since most of the respondents are

present at school. This way, the data gathering procedure will be faster and

simpler. The questions were placed in question and table form and the results

were tallied by the researcher. The researcher calculated the percent for each

question using the standard formula.

Procedure

The researcher began his research in the middle of November. The

survey was designed on April 2022. During the month of March, the survey was

being planned out and the questions were just being made.

Respondent’s Profile

The table shows the number of people who participated in the survey. The table

also indicated the number of respondents and age.

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Respondents Gathering of data Questionnaire
ADSAC JHS By use of surveys, About digital
students; Ages 13-19. questionnaire. currencies and their
possible effects and
impacts.

Survey
Process Exposure
Data is collected from
Analysis of data and Results are revealed the target population,
processing of to the researcher. surveyed face-to-
information. face.

Conclusion
This is the final part of the research. This is to state and answer
the main research question and make the reader understand why
the research is important and why it matters.

Conceptual Framework

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