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Cryptocurrency, or crypto, is a digital form of currency that exists only virtually and uses cryptography for transactions. Cryptocurrencies are not regulated by any authority. When you transfer cryptocurrency, transactions instead are recorded in a public ledger. As cryptocurrency is virtual only your currency will be stored in a digital wallet.
Why is it called cryptocurrency? It got its name due to the use of encryption to verify the digital transactions. Encryption is used to provide security when transferring data between wallets and ledgers. Individual units are known as coins or tokens. If you own cryptocurrency, it's important to understand that you don't own anything tangible, units are entirely virtual.
Cryptocurrency first came to light back in 2009, with the first coin being Bitcoin. Today, Bitcoin is still the most well-known currency available and the reason for cryptocurrencies success with many early investors making high profits in the early days.
The most common form of creating cryptocurrencies is through crypto mining. This process is used to create Bitcoin for example. But what is crypto mining? Crypto mining is a process in which mathematical equations are used to create units of cryptocurrency.
Other cryptocurrencies can use different methods to create coins, these are generally without miners but instead use the help of nodes. These private blockchains are thought to be more energy-efficient when adding blocks. But unlike public blockchains, private blockchains can only be accessed by the verified users who have received an invitation from the network starter. Private blockchains must also be hidden and as such usage is highly limitied.
Most cryptocurrencies, such as Bitcoin, run on a distributed public ledger known as blockchain. This technology helps to maintain a tamper-proof record of transactions. Why is this important? It allows us to keep tabs on who owns what.
Blockchain was essentially the glue to hold the launch of cryptocurrency together. Previously, there had been issues with efforts to create virtual currencies. These mainly revolved around people making copies and duplicating their wealth or stealing. The goal in crypto trading is to purchase units when they are low and resell for a higher return.
Looking to invest in cryptocurrency in the UAE, here's the steps you should follow:
Crypto exchange, is still pretty new to the UAE, but many of the worlds biggest platforms have already been licensed in the region. The first thing to do is open a trading account on a platform like eToro, BitOasis, Coinbase, etc.
Your account will need to be verified, but once this is done the next step is depositing money into the account in order to begin trading. You can select from multiple transfer methods such as credit or debit cards, virtual cards or direct bank transfer.
It may take a few days for the money to show in your account, but as soon as it does you're ready to buy cryptocurrency. Many of the coins can be expensive, so you need not buy a whole coin. There is options to buy portions of coins depending on your You can either buy a whole coin or portions of coins.
You'll want to make sure any cryptocurrency you buy is secure, the best way to do this is by storing it safely in a digital wallet. Digital wallets come with private keys only you will have access to, it's the safest form of storing your crypto.
Most investors will use an online exchange platform to buy & sell cryptocurrency in the UAE. There are many different platforms that offer these kind of services. Below are a few of the UAE’s most popular crypto exchanges in 2022:
eToro was originally founded in 2007 and soon became one of the best brokers for beginners. eToro is pretty much known for social trading and mimicking other's trades. eToro is regulated by multiple top-tier financial bodies, including ASIC, CySEC, and the FCA. As such it's considered to be a safe broker option (meaning low-risk) for trading.
With just $10 you can begin your trading journey on eToro. Whether you're interested in Bitcoin or Dogecoin, eToro has you covered. With over 40 cryptocurrencies on the platform. eToro also allows for you to trade bonds and stocks, allowing you to diversify your portfolio.
Binance is arguably the most popular exchange platform in the UAE right now. Offering access to a wide range of cryptocurrencies on the platform, with low commission rates. However, Binance is often associated with more advanced traders or investors.
Some key factors that make Binance one of the most popular among UAE residents are that it not only allows individuals access to trading services but institutions too. The platform supports top cryptocurrencies like Bitcoin, Ripple and Ethereum. But most of all, Binance is so popular with UAE residents for its security. Offering cold storage, which is supposedly difficult to steal.
Crypto.com is known for its wide array of services allowing users to have crypto debit cards and even loans. They also give users access to the NFT marketplace.
The platform is know for its advanced security which gives users confidence when buying long term. Some other features that make the platform stand out, is the savings option. Users can add their assets into a crypto.com savings account and even earn interest!