The world of virtual currency also known as crypto currency has proven to be a great investment. The fascination with crypto currency stems from the increased security of this payment method as opposed to any other because it is very challenging to counterfeit. This has been critical for today’s consumers who are concerned about the safety and security of their personal financial information. The current state of the economy and high demand has also led to the price of bitcoins inflating, proving to be effective for trade.
How Does It Work?
The way crypto currency works is rooted in a process called ‘block chain technology’ that is imbedded across a network of computers which act as ledgers, evidencing the credibility and security of transactions. This means that every transaction is verified across a multitude of serves, making it very easy to keep track of transactions even if one computer or server crashes.
Computers operating ‘block chain’ technology and therefore regulating crypto currency pay are different from banks because they are generally not in the control any one central authority or government body. The computers can be operated by any individual if it has the capacity to run ‘block chain’ technology and has a technical understanding of how to operate on the computer system. This is advantageous as people, now more than ever, hold concerns over governments and corporations retaining personal financial information.
Is it to store value or a payment method?
The short answer is both.
Bitcoin is one of the most infamous forms of crypto currencies and has been gaining increased traction since the start of 2021 with over 18.6 million bitcoins in circulation with a total market cap of 927 billion. This is because bitcoin is the first cryptocurrency to utilize blockchain technology. Bitcoin prices have fluctuated over time. It was primarily used, as a store of value, like gold, for the sole purpose of resale in the future. This has proven to be a viable investment because of a surge in demand for bitcoins which are limited in supply. It is therefore a lucrative time to enter the bitcoin trading market and consider using bitcoin as a store of value.
However, seeing the influx of businesses accepting Bitcoin some consumers, particularly those who are concerned with the safety of online transactions. This could mean that an investment in cryptocurrency in the future, could be for the purpose of consumption as opposed to simply storing value as many businesses now accept Bitcoin as a form of payment. This includes but is not limited to corporations such as Tesla, Microsoft, Lush, amazon-live streaming service twitch and US leading hotel Kessler. In the UK Bitcoin has also become a popular mechanism of buying houses. We can see that slowly but surely Bitcoin will infiltrate many more markets and become a popular form of payment.
This means that even if investing in bitcoin becomes less promising because of a volatile economy or economic recession, it can be used to pay for commodities and services, making it even more attractive to consumers than ever before.
What does this mean for your business?
Bitcoin is unique because of its capacity to be used as a commodity (like gold) and as a currency (like dirhams/dollars) and has not yet been subject to extensive legislation. This means that are very few barriers to enter the bitcoin market.
Bitcoin’s ability to eliminate processing fees and the time delay incurred when verifying payments. This means that as a business enabling pay through this method may have the potential to attract more customers. By allowing this payment method, your business has a competitive edge and demonstrates innovation.
There is also capacity to tap into new markets in regions where payment for a product may be difficult because of potential credit card restrictions consumers may be facing or government regulations serving as obstacles to payment. Through enabling bitcoin payments, businesses can break potential barriers for consumers.
A good starting point for businesses can also be to get on the trading side of Bitcoin. This is in an order to capitalize on increasing demand and limited supply of Bitcoins. Entering the business of becoming a faciliatory of a leading virtual currency, in this technological infused environment could potentially be a viable business strategy. It is also a lucrative time to enter this business because there are, at least in the UAE, very few legislative constraints in the area.
What are the opportunities for Bitcoin trading in Dubai?
As of now, there is no legislation tailored directly to the prohibition of Bitcoin and it seems that those in the UAE continue to invest and trade in Bitcoin because of market trends and the government’s plans to implement blockchain.
There are a range of service providers to invest in Bitcoin such as Rain which is based in the Middle East and BitOasis who can capitalize on the influx of demand for Bitcoin.
Establishing Crypto businesses are now as of 2021 able to set up in the DMCC as a result of a regulatory framework established to enable the offering, issuance, listing and trading of crypto assets in the DMCC, a world leading free zone.