It has been hailed as the future of money, but what does Bitcoin mean to Dubai?
Bitcoin is being hailed as the future of money. As companies and tech-savvy consumers go virtual with their finances Benita Adesuyan speaks to Ola Doudin of BitOasis to find out what impact the cryptocurrency could have in Dubai.
On Thursday December 11 to Saturday 13, Dubai held its first Bitcoin conference, which hundreds of businesses, finance representatives and regulators attended to discover more about the digital currency that’s having an impact on the way we transact around the world.
The fact that the conference was held here in the emirate is an indicator that Bitcoin is beginning to find its way into the virtual pockets of the city’s consumers. Time Out spoke with Ola Doudin, co-founder of Dubai-based BitOasis, the first multi-signatory Bitcoin wallet in the UAE, to find out what the cryptocurrency is really all about and the benefits it could have in the region.
What is Bitcoin? It is a virtual payment network with no centralised company or organisation. While in the real world currencies are governed by a nation’s central bank such as The Central Bank of The United Arab Emirates, The Federal Reserve in America or the UK’s Bank of England, Bitcoin has no central power. This belongs to the people who use it. It’s a digital currency, so there are no actual coins, bills or cheques.
How can you get Bitcoin? Setting it up is as easy as creating an email account. Sites such as ours (bitoasis.net) and bitcoin.org enable you to set up accounts to store and transact from within minutes. All you need is an email address and a mobile phone. Users can then buy it from exchanges such as the UAE-based igot (igot.com) or directly from other people selling it. You can pay for it using cash, credit and debit cards or other cryptocurrencies.
What are the benefits? Firstly Bitcoin facilitates online payments. The Middle East market is still hugely cash-based with around 85 percent of transactions still happen in cash, but we are moving into a digital economy and Bitcoin is a huge part of that. Some people don’t like giving out their credit card details online, but with Bitcoin you don’t actually give out any personal details when you transact, you just have to provide your Bitcoin address. It provides a level of privacy that credit cards don’t offer and I think a lot of customers prefer that. Another key benefit is the fact that it cuts out the middle man so there are no fees when sending money internationally. Most migrant workers are unbanked, so they use money transfer agencies, which take ten percent, and for someone transferring 100 dollars that is huge. The digital currency also offers some access to banking for those who are denied it. Only 20 percent of adults in the Middle East have bank accounts, so 80 percent are stuck in a cash-based economy and don’t have the liberty to move money around or the right to take out loans or take advantage of sophisticated banking tools that the 20 percent have access to. Bitcoin can integrate the 80 percent.
Is the virtual currency safe? When Bitcoin initially started out, there were a lot of breaches, and people running Bitcoin services didn’t see security as a priority. At BitOasis we’re implementing multi-signature technology to protect customers from hacking. Traditional Bitcoin wallets have a public and a private key. The public key is like your email address that you give out to people and the private is what you alone hold onto, encrypt and back up. If someone were to get hold of that private key, your funds would become compromised as that person would have access to your wallet and would be able to make transactions as if they are you. BitOasis offers UAE Bitcoin users additional security by having three keys, which are stored in three different geographical locations monitoring transactions, so if anything suspicious occurs on your account the transaction will be stopped.
What challenges do you face with Bitcoin? It’s a new industry and we are the first to offer a multi-signatory Bitcoin wallet in the UAE so we need to educate people on the benefits of using the digital currency. We’re talking to partners, regulators and other financial institutions about how Bitcoin can make paying for products online easier and give people without bank accounts financial rights. In the UAE there’s no clear regulatory framework for this kind of currency market, but we’re trying to engage with regulators to figure one out.
Could it ever replace cash? It is gradually happening but it might take some time. Microsoft and Dell recently started accepting Bitcoin and Wikipedia also accepts donations in Bitcoin. It’s happening in the bigger US market. The Middle East will only catch up. To learn more about BitOasis and to sign for a Bitcoin wallet with the company visit www.bitoasis.net.