Cryptocurrency 101: An Easy Guide to Cryptocurrency for Beginners
The cryptocurrency market is rapidly booming in the UAE, and Dubai has recently enacted its first-ever Virtual Assets Law (VAL) to regulate crypto-related activities. This means you can buy and sell Bitcoin and other variants of authorized cryptocurrency in Dubai safely and legally. With the increasing trend of cryptocurrency trading, it is evident that you would want to learn all about cryptocurrency sooner or later. So, here is our Cryptocurrency 101 guide for you.
What is a cryptocurrency?
Cryptocurrency is a digital currency which is nearly impossible to double-spend or counterfeit. Its transaction is verified and maintained by a decentralized ledger using cryptography, not by a centralized authority such as bank.
How does cryptocurrency work?
Think of cryptocurrency just like a digital form of cash that you can transfer to your friends, pay for your groceries and favourite gadgets from brands and platforms that accept cryptocurrency, book flight tickets and hotels, and more.
One important thing to note is that transferring cryptocurrency is not similar to bank transfers or transfers via digital payment apps, such as Payit, Google Pay, and Etisalat Wallet.
Unlike traditional money, cryptocurrency is not managed by centralized financial banks and institutions. So, with cryptocurrency, you don’t need to ask them to transfer your money on your behalf whenever you want to spend it or transfer it.
With cryptocurrency, you have the freedom to act as your own bank by running free software or an app on your mobile. The devices on both sides communicate directly and there is no middleman involved in the transfer and verification process. Neither you need to sign up to any website and share your email address or password!
All you need is to download a cryptocurrency software wallet on your computer or a cryptocurrency payment app on your smartphone to start receiving and sending cryptocurrency.
Why should I use cryptocurrency? What are the benefits of cryptocurrency?
With cryptocurrency, you can enjoy a wide range of benefits. Some of the most amazing benefits of using cryptocurrency are:
- You can use cryptocurrency without having a bank account as you can buy cryptocurrency not only via credit, prepaid, or debit card but also cash.
- You don’t need any permission from banks. They cannot freeze your account or decline transactions when making payments with cryptocurrency.
- It is virtually impossible for hackers to hack cryptocurrency as it is highly secure and encrypted.
- Cryptocurrency is a quick and cheap way to make transactions anywhere around the world. You can transfer it within seconds and at a fraction of the cost of an international wire transfer.
Are all cryptocurrencies the same?
No. All available variants of cryptocurrency are not the same. The main difference lies in how cryptocurrencies are produced and spent. While some crypto coins can be spent for daily use such as buying coffee, clothes, shoes, and more, other coins are used for only specific services and platforms.
However, you can trade between two cryptocurrencies directly. For instance, you can exchange Bitcoin (BTC) with Ethereum (ETH) and vice-versa.
What’s more, you can also convert cryptocurrency to cash and then move it to a bank account. All your need is to sell your cryptocurrencies at a cryptocurrency exchange and withdraw the cash amount.
In the UAE, some cryptocurrencies are more commonly used than others. The most important ones are Bitcoin, DubaiCoin, emCash, Ethereum, OneGramcoin, and ArabianChain.
Hope the above answers some of your questions about Cryptocurrency and helps you make an informed decision on whether you want to invest in the same or not.