Citizens of the United Arab Emirates are ahead of many other countries when it comes to leveraging the crypto-economy for profitable investments. The government has legalized the trading of cryptocurrencies and continues to support blockchain innovations for the nation's overall economic growth. This guide contains all you need to know about how to buy bitcoin in the UAE as an Emirati. Let's get started.
What is Bitcoin?
Before we delve into how to buy Bitcoin in the UAE, let's explore the origin of Bitcoin and what it represents.
Bitcoins are an example of a cryptocurrency which means it is a digital currency built using cryptographic processes. They exist as virtual currencies and are not real items that can be held physically like the usual fiat money used in everyday life.
Bitcoin was designed using a disruptive technology known as blockchain technology which involves creating an open public ledger that records all transactions made with Bitcoin.
The ledger is called the blockchain, and it was made cyber-secure to prevent fraudulent activities during transactions. Cyber-secure means that all transactions on the blockchain must be validated before it is recorded. The validation process involves mining, where some miners compete to be the first to solve a complex calculation.
When anyone hatches the solution to the puzzle, a new block is added to a chain of other blocks, hence the name "blockchain." Each successful miner is awarded some Bitcoins as a reward for verifying the transaction. Coins that require mining to validate transactions are categorized as Proof-of-Work cryptocurrencies and usually consume a high amount of power.
Because the legendary founder of Bitcoin, Satoshi Nakomoto, only created 21 million Bitcoins, the value of Bitcoin continues to grow as its demand increases. To buy Bitcoin in UAE, you need a digital wallet to process your transactions. A digital wallet is an application that enables you to:
Process transactions in the Emirates to other parts of the world
Securely store your passwords and order receipts
Pay for goods and services that support Bitcoin payment
Store your loyalty card info and other digital vouchers
Now that we've covered the origin of Bitcoin and how it works, it's time to explore how to buy cryptocurrency in UAE.
Buying Bitcoins in UAE
The United Arab Emirates, specifically Dubai, has witnessed an increased demand for Bitcoins in recent times. The country continues to see an influx of entrepreneurs with innovative crypto businesses ready to establish and capture a significant portion of the budding crypto market. The welcomed increase in crypto exchanges in the UAE provides more opportunities for citizens to buy and sell crypto easily. Here are the steps to follow!.
Open an Account at a Cryptocurrency Exchange
To buy or sell crypto coins, you need to open an account on a crypto exchange. Crypto exchanges are platforms that facilitate the trading of cryptocurrencies, and some of those based in the UAE include BC Bitcoin, Changelly, Palmex, Bitfinex, and CEX.IO.
Get a cryptocurrency wallet
Once you open an account on an exchange, you automatically receive a wallet address which you can use for cryptocurrency trading in UAE.
This wallet is yours but not entirely, as the crypto exchange can make decisions about the funds stored in it. Hence, it would help if you had a decentralized wallet where you have full control over your assets.
Wallets like Metamask and Trust Wallet are some of the most popular options for Bitcoin trading in the UAE. You can transfer your coins from the exchange to your wallet address and secure it with password keys.
Ensure you keep the password in a place where you can easily remember and access it. You can install these software-based wallets on your phones, laptops, or other devices.
Another alternative to trading cryptocurrency in UAE with software-based wallets is the hardware wallets. Hardware wallets are digital devices used to store password keys to specific cryptocurrencies.
One of the most popular hardware wallets is the Ledger hardware wallet. The wallet connects to a computer like a USB device, after which you'll input the required security keys before you can access your assets.
Withdrawing BTC to your wallet
It's important to know the risks of holding crypto on a crypto exchange. One of the risks associated with being fully dependent on exchanges to secure your assets is the possibility of hackers carting away millions of dollars in customers' assets. You can shield yourself from such exposure by withdrawing your Bitcoin to your wallet. The best bitcoin wallet in UAE is Electrum, the most popular Bitcoin wallet available since 2011.
Finally, we'll look at how to invest in cryptocurrency in UAE. There are different options available for investing in crypto, and they include the following:
You can get bitcoins in the local market (UAE) via the LocalBitcoins.com site.
You can trade BTC using CFDs by opening an online brokerage account and trading on the platform.
You can also buy Bitcoin on a crypto exchange like Rain or Bitoasis and withdraw it to your wallet.
Before you buy Bitcoin, it's important to decide if you want to invest or trade the coin. If you intend to trade BTC, be aware that the market is usually volatile, and it would help if you took some crypto trading courses before you begin trading.