Tarik Kaddoumi, the co-founder of Umbrellab, the Dubai-based Bitcoin and cryptocurrency payment services start-up, first heard of Bitcoin in 2012 and immediately spotted its potential.

He saw it had the ability to replace traditional money transfers, in the same way that email destroyed the traditional letter. “Suddenly, when email appeared, instead of writing letters we could send electronic messages for free. No stamps, no letter, no envelope and no waiting. Bitcoin means we can now do exactly the same with money.”

Bitcoin allows individuals to send payments to each other without using a remittance service, chequebook or the bank. “Just from me to you, with no delay, and no middle men. This is the type of disruptive technology that can change history,” says Mr Kaddoumi, 36, from Germany, who has lived in Dubai for seven years.

He started by purchasing 10 Bitcoins at a price of around US$12 each, or $120 in total. Today, that would cost a rather heftier $6,410.

Despite this increase there has been plenty of volatility in between. “We have already seen a few price bubbles and corrections, with the price topping $1,000 in December 2013, before falling back,” Mr Kaddoumi says.

“My investment has gone from a casual technophile obsession, to become a large percentage of my savings, since it has offered healthy returns. I am in this for the long term.”

pf@thenational.ae

Follow us on Twitter @TheNationalPF