October 3, 2022

A beginner’s guide to understanding cryptocurrencies in Dubai

Cryptocurrencies have been gaining traction and popularity worldwide in the past few years. And Dubai is no exception. With its innovative and progressive approach to technology, Dubai has become one of the leading cryptocurrency trading and investment destinations.

If you’re based in Dubai and are looking to get into the crypto world, this guide is for you. It will give you a brief overview of what cryptocurrencies are, how they work, and some of the most popular cryptos you can invest in.

What exactly are cryptocurrencies?

They are digital or virtual tokens that use cryptography to secure their transactions and control the creation of new units. Cryptocurrencies are decentralised and not subject to government or financial institution control.

Bitcoin is the most well-known cryptocurrency and was created in 2009. Since then, over 4,000 other cryptocurrencies have been introduced, and new ones being created.

How do cryptocurrencies work?

Cryptocurrencies work on a technology called a blockchain. A blockchain is a decentralised digital ledger that records all cryptocurrency transactions. This ledge is constantly growing as “completed” blocks are added with a new set of recordings. Each block in the chain contains a cryptographic hash of the previous block, a timestamp, and transaction data.

What are the benefits of cryptocurrencies?

Crypto offer many advantages over traditional fiat currencies, such as US Dollars or Euros. Some of these advantages include:

Decentralisation

Crypto is not subject to government or financial institution control. It means that these entities can’t manipulate them in the same way fiat currencies can.

Security

Cryptocurrency transactions are secure and irreversible because they cannot be tampered with or reversed once a transaction is confirmed.

Anonymity

Bitcoin and other cryptocurrencies offer users a high degree of anonymity because your data is not attached to it when you make a transaction with Bitcoin.

What are some popular cryptocurrencies?

Here are the most popular cryptocurrencies to trade in Dubai;

Bitcoin

Bitcoin is the most well-known cryptocurrency and was created in 2009 by an anonymous individual or group of individuals under Satoshi Nakamoto. Bitcoin is a decentralised cryptocurrency that is not subject to government or financial institution control.

Ethereum

Ethereum is a decentralised online platform that runs smart contracts. These smart contracts are applications that run without any possibility of fraud or third-party interference.

Ripple

It is a real-time gross settlement system (RTGS), currency exchange and remittance network. Ripple is also a decentralised cryptocurrency, not subject to government or financial institution control.

Bitcoin Cash

Bitcoin Cash is a fork of Bitcoin that was created in 2017. It has the same features and characteristics as Bitcoin but increased block size and transaction speed.

Litecoin

Like Bitcoin Cash, it is another fork of Bitcoin created in 2011. It offers traders the same features and characteristics as Bitcoin but faster transaction confirmation times.

A step-by-step guide to buying cryptocurrencies

If you’re interested in buying cryptocurrencies, then there are a few things that you need to know. Here’s a step-by-step guide:

Find a reputable exchange

Several exchanges allow you to buy and sell cryptocurrencies. Some of the most popular include Coinbase, Kraken, and Binance.

Create an account

Once you’ve found an exchange, you’ll need to create an account. It will require you to provide some personal information and a valid email address.

Deposit funds

Once you’ve created your account, you’ll need to deposit funds into it. You can do this using a credit or debit card or bank transfer.

Buy cryptocurrencies

Once you have deposited funds, you’ll be able to buy cryptocurrencies. Most exchanges allow you to buy Bitcoin, Ethereum, and Litecoin.

Finally

Cryptocurrencies are a risky investment, and you should never invest more than you can afford to lose. If you’re thinking about investing, understand the risks involved and have a clear investment strategy. Before investing in crypto, novice traders are advised to contact the best forex crypto broker in Dubai, like Saxo Bank.

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