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The financial landscape well and truly changed after Bitcoin was released in 2009. The new digital cash system took the financial power away from banks and government entities and put it back into the hands of the people. While Bitcoin has become a household name over the last decade, the creator still remains a mystery. Let's take a deeper dive into one of the biggest mysteries of the modern world.  

The Bitcoin solution

Before we plunge into the mysteries of the anonymous entity behind this century's greatest invention, let us first highlight the revolutionary product that is Bitcoin. The electronic payment system was first introduced to the world in late 2008 by a certain Satoshi Nakamoto. 

The character seemingly came from the abyss and presented to the world a solution to the global financial crisis that caused widespread disruption. This solution was in the form of a digital currency and used blockchain technology to facilitate, maintain and operate the network. 

Nakamoto did not invent blockchain technology, instead, he improved on several issues like the double-spending problem. The technology was originally created to facilitate file sharing although was hindered by that issue. Today, blockchain technology has a wide range of use cases and is being implemented in industries around the world, far beyond just the crypto and financial fields. 

Bitcoin remains the biggest cryptocurrency to this day, with over 17,500 alternative cryptocurrencies and counting. At the time of writing the industry is worth just over $2.2 trillion, although it reached highs of $2.968 trillion in November 2021. No asset in the history of the world has gone on to achieve such success in such a short space of time. 

What we know about Satoshi Nakamoto

While we know the name Satoshi Nakamoto, it remains to be known who is behind the pseudonym. This person or entity released the Bitcoin whitepaper in October 2008 to a group of cryptographers and shortly afterwards created the BitcoinTalk forum and Bitcoin.org website. 

Two months later, the first block on the Bitcoin network was mined, known as the Genesis block, with the caption "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks." It was mined that same day.

Stephan Thomas, a BitcoinTalk Forum member, mapped out when Nakamoto posted on forums to get an indication of what time zone he might live in. The results showed that he was least active during 6h00 to 11h00 GMT, suggesting that should he sleep at night (not a given for developers) that would place him in a time zone somewhere between GMT -5 to GMT -7, somewhere in the Americas.

During 2010, Nakamoto was an active member of the Bitcoin community. He worked on building Bitcoin's protocol and often collaborated and communicated with other developers. Then, towards the end of the year, he strangely handed over the keys and codes to another active developer, Gavin Andresen, and transferred the domains he had created to other members of the community. By the end of the year, he seemed to have cut ties with the project.

Before all but vanishing, the last trace of communication we know of from Satoshi Nakamoto was a message to Mike Hearn, another developer, on 23 April 2011, that read: "I've moved on to other things. It's in good hands with Gavin and everyone." And just as abruptly as Bitcoin had entered the world, Nakamoto left it.

Who could be behind the anonymous entity? 

While many people have been suspected of being Satoshi Nakamoto, there is yet to be enough evidence to convince everyone else. Over the years, many journalists have tried to lift the veil, and again, to no avail. For over a decade, the world has been left wondering who is behind the anonymous name, and why would they not come forward?

The biggest contenders for the mystery person have been Hal Finney, Nick Szabo, and Dave Kleiman, who have all denied this. One man, Craig Wright, has come forward to claim to be Satoshi Nakamoto, however, the industry remains unconvinced (along with a judge in a recent legal battle that played out in a British court).

Hal Finney

Hal Finney is a computer scientist who had previously tried to create a digital cash system. Finney is noted as being one of the earliest people interested in Bitcoin, with the first transaction taking place between Satoshi Nakamoto's wallet and Finney's. 

Finney also lived in the same town as Dorian Satoshi Nakamoto, a Japanese man who was hunted by the media when they assumed they had found the "real" identity. Finney passed away in August 2014. 

Nick Szabo

Nick Szabo is credited with having tried to create a digital cash system prior to Bitcoin's launch, releasing BitGold in 1998. He also coined the name "smart contracts". The cryptographer and computer scientist was listed as the most likely person to be Satoshi Nakamoto following a study done in 2014 by a group of students and researchers at Aston University who conducted a thorough linguistics analysis on all previous communication. 

Dave Kleiman

Dave Kleiman was a computer forensics expert whose name has come up plenty of times, largely thanks to Craig Wright. Kleiman's estate sued Wright over claims that they had invented Bitcoin together and had access to a large, shared amount of BTC. He died broke and in squalor in 2013.

Craig Wright

The Australian computer scientist and businessman has gone to great lengths to claim to be Satoshi Nakamoto, however, has provided little to no evidence. These claims have been unequivocally disregarded by the Bitcoin community. 

The mystery remains unsolved

Perhaps the biggest irony of all, is that the technology is entirely trustless and operates with the work of thousands of nodes who don't know each other. All we know is that whoever it was/they are, they revolutionised the world as we know it and have left us with some sort of extraordinary.

When it comes to investing in crypto, many people think about either mining cryptocurrencies or buying them outright on a crypto exchange. But what about those who want more control over their digital wallet? For the everyday crypto-investors, there's a viable cost-free alternative to earning more crypto: staking also known as "coins staking." Crypto staking allows you to generate more cryptocurrencies using your crypto holdings.

There are many new terms entering the financial world, but staking may be one of them that you should know. What exactly is it? Crypto staking is a relatively new concept that has the potential to revolutionize how we invest in cryptocurrency.

While it may appear complex at first, learning about the benefits of crypto-staking can help you make more educated decisions when investing in cryptocurrency.

In this article, you'll learn the ins and outs of staking. We've broken it down so that even if your experience level with cryptocurrencies is at beginner or below, you'll be able to start staking yourself. Let's get started!

What Is Staking?

Staking crypto is the process of locking crypto assets in a wallet to earn rewards. Doing so allows users to contribute to verifying transactions and building consensus on blockchain networks.

The procedures for validating cryptocurrency are known as "proof-of-stake" or "proof-of-work" depending on the sort of the cryptocurrency you're dealing with and the technologies that support it. Each of these methods aids blockchain networks in achieving consensus, or confirmation that all transaction data agrees.

It also requires participants to make that consensus possible. Staking is the act of investors who keep their cryptocurrency in their crypto wallet and actively participate in network consensus-making processes. Stakers, in essence, are approving, verifying and confirming transactions on the blockchain.

In crypto staking, coin holders can lock up their coins (staking) for some time period from hours to years in exchange for stakes back from the platform or network.

Staking crypto can be passive income generating - crypto holders who stake their coins will receive rewards for helping validate transactions on blockchain networks, often through an interest system similar to that of traditional fiat currency.

How does crypto staking work?

For the investor, crypto staking is a passive process. When a Staker stakes its assets (that is, leaves them in their crypto wallet), the network may utilize those assets to create new blocks on the blockchain.

The block's information is "written" into it, and the investor's assets are used to validate it. Because coins already contain "baked-in" data from the blockchain, they may be utilized as validators. The Staker is then rewarded financially for allowing his or her tokens to be used as validators by the network.

The pros and cons of Staking.

Because staking crypto is a passive investment, there are virtually close to no disadvantages. However, it's important to consider the block rewards earned by staking coins you own, as well as cryptocurrency's volatility in general—if the value of the coin drops, so does the value of your staking interest earned.

Is crypto staking profitable?

The advantage of staking is that anyone can make returns from it, with various yearly returns rates, staking is an easy way to generate passive income.

Staking is a type of passive income similar to stock dividends. It only requires you to keep the proper assets in the right location for a specific length of time. Compound interest will enhance the earnings potential over time as long as a user stakes their coins.

The value of the coin being staked must also be considered. Assuming this value stays constant or rises, staking may be profitable. However, if the price of the coin falls, profits could rapidly diminish. If you don't want to risk a downward trend in volatility.

Closing thoughts

Staking is a method for earning rewards using your cryptocurrency assets or coins. It's comparable to generating interest on cash savings or receiving dividends on stock possessions.

Stakers allow their cryptocurrency/cash to be used in the blockchain validation process and are compensated by the network for its use. Staking may provide a new way for crypto investors or currency holders to generate returns.

Ethereum Naming Service is a branch from the original blockchain network which aims to make the crypto space, particularly within the DeFi and Web3 sectors, more user-friendly and accessible. Similar to how Domain Name Service made the internet more accessible, Ethereum Name Service aims to do the same and become a fundamental component of these sectors.

What is Ethereum Name Service (ENS)?

Ethereum Name Service (ENS) is a decentralized naming system that simplifies sending and receiving payments in the Ethereum network. It works like a domain name service (DNS) uses IP addresses, but instead for Ethereum crypto addresses, allowing users to register human-readable names that are mapped to their Ethereum addresses. This makes it easier to remember and share addresses, instead of having to remember long strings of characters.

For example, a user could register the domain name "myname.eth" and associate it with their Ethereum wallet address. Once registered, anyone can send payments to "myname.eth" instead of the complicated Ethereum address.

Users can register a name through various ENS domain registrars or directly through the ENS manager. Once registered, the name is added to the Ethereum Name Service Registry, and the user becomes the owner of that name. ENS uses a hierarchical system of domains similar to the DNS system used for the internet. 

Once registered, the user can then set the resolver, which is a smart contract that provides information about the Ethereum wallet address associated with the ENS name.

The resolver can be thought of as a mapping function between the name and the Ethereum wallet address. When someone sends a payment to an ENS name, the resolver is queried to retrieve the associated Ethereum address. Once the Ethereum wallet address is retrieved, the payment can be sent directly to the address.

ENS also allows users to add additional data to their domain names, such as an IPFS hash or a swarm hash, making it possible to associate decentralized content with a domain name. For example, a user could associate an IPFS hash with their domain name, making it possible to access decentralized content using a human-readable name.

Who created Ethereum Name Service?

Ethereum Name Service (ENS) was initially part of the Ethereum Foundation and proposed by Nick Johnson in 2016 as a way to simplify the process of sending and receiving payments in the Ethereum network. Nick Johnson is a software engineer that previously worked at Google and the Ethereum Foundation. 

The ENS system was launched as a separate entity in May 2017 as a decentralized naming service on the Ethereum blockchain. Since its launch, ENS has been widely adopted by the Ethereum community and has become an essential part of the Ethereum ecosystem.

How does Ethereum Name Service work?

The Ethereum Name Service (ENS) system is similar to the DNS (Domain Name System) used on the internet. Users can register an ENS domain name under the .eth top-level domain and associate them with their Ethereum addresses by using the platform's smart contracts.

This means that instead of sending payments to complicated and hard-to-remember Ethereum crypto addresses, users can simply send payments to easy-to-remember domain names. For example, instead of sending funds to 0x71C7656EC7ab88b098defB751B7401B5f6d89, users can instead send funds to tap.eth. 

The system uses two smart contracts to make this possible: the registry and the resolver. 

ENS Registry

To use ENS, users must first register a name through a registrar. Registrars are entities that facilitate the registration of domain names under the .eth top-level domain and store all the domains. Once a user has registered a name, it is added to the ENS Registry, and the user becomes the owner of that name.

ENS Resolver

The next step is to set the resolver, which is a smart contract that provides information about the Ethereum address associated with the ENS domain. Resolvers can be set by the user or they can use one of the default resolvers provided by ENS. Once the resolver is set, users can associate their Ethereum crypto address with their ENS name. This is done by adding a record to the resolver that maps the ENS name to the wallet address.

ENS allows users to add additional data to their ENS domains, such as an IPFS hash or a swarm hash. ENS also supports subdomains, which are domains that are associated with a parent domain name. This makes it possible to create a hierarchical naming system that is similar to the DNS system used on the internet.

What is the ENS token?

The Ethereum Name Service (ENS) did not have its own token until recently. In 2021, the ENS team announced the launch of a new governance token called ENS, which is separate from the old ERC-20 token with the same name. 

The new ENS token is used for governance and voting purposes and is not used to pay for the registration or renewal of ENS domain names. Instead, users need to pay in ETH to register their “.eth” domains, with an idea of the costs reflected below (subject to change due to market fluctuations, please review the ENS website for accurate costs):

$5 in ETH per year, for a five+ character .eth ENS domain;

$160 in ETH per year, for a four-character .eth ENS domain;

$640 in ETH per year, for a three-character .eth ENS domain.

The higher prices are due to the supply of three- and four-character .eth names being smaller. 

The total supply of the new ENS token is 100 million, and they were distributed through a community airdrop in 2021.

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What is the ENS DAO?

The ENS DAO (Decentralized Autonomous Organization) is a community-governed organization that oversees the development and management of the Ethereum Name Service (ENS) ecosystem. It is responsible for making decisions about the future direction of the ENS system, including upgrades, changes to policies, and new feature development. The organisation is governed by the ENS token holders, who have the right to vote on proposals and decisions related to the ENS ecosystem.

The organization is an important part of the ENS ecosystem, as it ensures that the system is developed and managed in a decentralized and community-driven manner. It allows stakeholders to have a voice in the decision-making process and ensures that the system remains responsive to the needs of the community.

What is the ENS Foundation?

The Ethereum Name Service (ENS) Foundation is a non-profit organization that supports the development and growth of the ENS ecosystem. It oversees the development of the ENS system, promotes its adoption, and provides support to users and developers.

The ENS Foundation is involved in a wide range of activities related to the ENS ecosystem, including organizing community events, providing guidance, and funding the ongoing development of the ENS system. It plays a critical role in supporting the growth and development of the ecosystem alongside the ENS DAO, which is responsible for making decisions about the future direction of the ENS system.

How can I buy ENS tokens?

Tap's mobile app enables users to easily acquire, trade and securely store Ethereum Name Service (ENS) in an integrated wallet. Users can buy and sell the ENS token using a variety of supported crypto or fiat currencies. The app also provides a reliable space to store ENS tokens and other digital assets. By downloading the Tap mobile app, users can unlock the potential of a range of cryptocurrencies and fiat wallets.

In a string of new crypto assets available on Tap Global, Chainlink is one of the latest supported cryptocurrencies. The platform is renowned for being one of the biggest oracle platforms in the cryptosphere, making it possible for real-world data to communicate with blockchain applications.

Okay, so it's time to break down exactly what Chainlink is. You might be wondering why you should even care about this network when there are plenty of other decentralized projects out there. It all comes down to the fact that Chainlink aims to fix one obstacle that has prevented smart contracts from becoming more widespread in business and industry. Below we take a deeper look at what Chainlink is and what the platform has to offer. 

What is Chainlink (LINK)? 

Chainlink is a decentralized oracle platform designed to merge the blockchain world with the real world through data integration. The main aim of the platform is to allow smart contracts to capture real-world data, merging the two worlds.

Smart contracts are digital agreements that automatically execute when the agreed-upon conditions are met. Native to the blockchain industry, there is a significant gap between smart contracts capturing blockchain-specific data and external data like the weather, fiat currencies prices, sports scores, etc. 

Bitcoin, for instance, has a very small range of these input capabilities, while Ethereum can handle more due to its smart contract functionality. Chainlink is designed to provide a far greater range of input across the blockchain space through its network of oracles. 

These oracles are data providers that provide a bridge between smart contracts and external data sources. Each oracle is incentivized through a "reputation score" system to provide accurate data and rewarded accordingly with the platform's native token, LINK. 

Who Created Chainlink?

In 2014, Sergey Nazarov and Steve Ellis created a platform called SmartContract which allows smart contracts to come to life by connecting them to external data and widely accepted bank payments. This acted as the prelude to what would become Chainlink. 

The first version of Chainlink first emerged on the scene in mid-2017, founded by SmartContract. Three months later, the Chainlink whitepaper was launched by Navarov and Ellis. This was followed by a successful ICO which raised funds equating to $32 million, selling roughly 35% of the max supply of 1 billion LINK, funding the further development of the platform.

How does Chainlink works?

Alright, so now let's dig down into the nitty-gritty of how Chainlink works. Chainlink allows smart contracts to access external data. To do this, it provides an off-chain infrastructure that links smart contracts to all kinds of different data providers. This makes it much easier for smart contracts to get the information they need. The smart contract can then use this data in whatever way it needs to.

The first thing to understand is that smart contracts need external data in order to do their jobs. This makes sense, right? Your standard contract clearly specifies what happens when certain conditions are met. So what determines whether (and when) those conditions occur? Usually, it's some external force that a smart contract simply doesn't know about.

That means a blockchain-based smart contract can't fulfil its purpose without a way to get information from outside of the blockchain. So what do you do? You could have every individual app developer write their own oracles for each and every smart contract... or you can use a decentralized oracle network.

But what is the difference between centralized and decentralized oracles? Chainlink is great because it can be used to provide an 'outside view' to smart contracts... chainlink allows blockchain applications to securely access off-chain resources like traditional APIs, bank payments, and any other resource that's not currently on the blockchain.

Chainlink provides the security that developers need to run smart contracts without worrying about whether their favourite API is having problems. Chainlink also makes it possible for new data sources to be added to any smart contract which needs them.

Chainlink has three main processes in which it facilitates the communication of off-chain data with on-chain smart contracts. This is done through oracle selection, data reporting and result aggregation, as outlined below.

Oracle Selection

In this step, network users create a service-level agreement (SLA) outlining a set of desired data requirements. The platform then connects that SLA with relevant oracles providing that data. Parameters are then set and the user submits the SLA and deposits the required amount of LINK into what is called an Order-Matching contract, which is matched to the best bidding oracles. 

Data Reporting

Oracles then acquire the necessary real-world data outlined in the SLA from external sources, process the information and send it back to the smart contracts operating on the Chainlink network.

Result Aggregation

The results obtained by the data oracles are then tallied in an Aggregation contract, which assesses the validity of the data. It then allocates a score of the sum of all the data received to the user. This "track record" is used to verify an oracle's integrity, keeping a log of its completed requests, amount of LINK staked and average response time. 

Chainlink is also able to connect with oracles outside of its own blockchain network which is able to collect real-world data requested by the contracts. This process is managed by the Chainlink Core and Chainlink Adapter nodes. 

The network uses a Proof-of-Stake (Pos) consensus, relying on a staking protocol to ensure the network's security. 

How does Chainlink benefit me?

Chainlink is a decentralized oracle network that allows smart contracts to connect to external data sources. These can include APIs, internal systems, or other types of external data feeds. Chainlink's goal is to create a platform where developers aren't restricted from having their smart contracts interact with the outside world in any way they see fit.

You can start using Chainlink right away - no new platforms to learn, APIs to configure or other complex integrations.

chain link will never charge a fee for access to any of our oracle services. Our only source of revenue is the tokens you stake when retrieving outsourced data from your peers on the network.

What is LINK?

LINK is the native token to the Chainlink network and facilitates the communication of data. Considered to be an essential tool in merging blockchain technology with real-world applications, the token has gained wide popularity in the blockchain industry. Users use LINK to pay the nodes for their retrieving, verifying and sending of data. These prices are established by the node operator and based on the current market and demand for that data.

The node operators stake LINK in the Chainlink network to prove their commitment and good intentions. Nodes with bigger stakes take priority over nodes with smaller ones when matching them with SLAs.

LINK is an ERC20 token that powers the ChainLink Network. The LINK token serves three primary purposes:

1. A method to pay ChainLink Node operators for the retrieval of data from off-chain data feeds, like web APIs and other inputs
2. Incentivize the development of oracles that provide data to smart contracts.
3. A method of staking by clients who want access to our oracle network. 

The primary purpose of the LINK token is to secure the network by staking them. The user must stake a certain amount of LINK tokens to run a ChainLink node, which then acts as an oracle. In return, the user is paid for providing this service.

How to buy Chainlink

If you'd like to incorporate LINK in your crypto portfolio you can easily do so through our app. Simply trade any of your current crypto or fiat portfolios for LINK. You can as well purchase ChainLink using a credit card or debit card directly on Tap. We provide the most convenient means to purchase LINK using Visa or MasterCard. If you're ready to take the next step and want to buy some ChainLink, take the next step with Tap!

You've likely heard the term being thrown around in the cryptosphere. In this piece, we're breaking down what a fiat wallet is, why one might choose to use it, and how to create one should you wish to.

What Is a Fiat Wallet?

A fiat wallet is a digital account where you can store, send, and receive traditional (fiat) currencies like USD, EUR, or GBP. Think of it as an online version of a bank account, but often integrated within a crypto or fintech platform.

Many crypto exchanges offer fiat wallets alongside crypto wallets, allowing users to buy and sell digital assets more efficiently. Instead of waiting for bank transfers to clear, users can use their fiat wallet to make instant deposits or purchases.

Fiat wallets are also popular in fintech apps and are typically operated under an e-money license. Some platforms may even offer perks like interest or rewards for holding fiat funds in the wallet.

What Is Fiat Currency?

Before we go further, it's important to understand what "fiat" means. A fiat currency is a government-issued currency—like the US dollar, Euro, or British pound—not backed by a physical commodity like gold but by the trust in the government that issues it.

These currencies are regulated by central banks and are legal tender in their respective regions.

How Does a Fiat Wallet Work?

Much like a crypto wallet, a fiat wallet stores currency digitally. The key difference? It holds regular government-issued currency, not crypto assets.

Users often keep fiat in these wallets on exchanges or fintech platforms to allow quick transactions, avoid delays, or earn passive rewards. For instance, you can instantly buy Bitcoin using funds from your fiat wallet—no need to wait for your bank to process a transfer.

It’s worth noting that fiat wallets are not connected to a blockchain. They operate entirely outside the crypto ecosystem, serving as a bridge between traditional finance and digital assets.

Why Use a Fiat Wallet?

The short answer: speed and flexibility.

Here are some common reasons users opt for a fiat wallet:

• To buy or sell cryptocurrencies instantly, especially during periods of volatility
• To avoid delays from traditional bank transfers
• To keep cash on hand for seizing market opportunities

Imagine spotting a huge dip in a crypto asset overnight. If you rely on a standard bank transfer, it could take 2–3 days before your funds are available—by then, the opportunity may be gone. With a fiat wallet, you could act immediately.

For traders and investors, having funds ready to go can make a big difference. In crypto, speed often equals profit.

Is Your Money Safe in a Fiat Wallet?

The safety of your funds depends on the platform hosting your fiat wallet. A well-regulated provider with strong security practices should offer robust protection—just like a traditional bank.

Most platforms apply:

• Data encryption
• Multi-factor authentication
• Biometric verification or one-time passwords (OTP)

Fiat wallets and crypto wallets typically share the same level of platform-based security, so always choose a provider that meets compliance standards and prioritizes user safety.

Store Your Fiat Currencies in Fiat Wallets on Tap

With Tap, you can securely store your fiat currencies in a regulated environment.

Here’s how to deposit into your fiat wallet:

1. Open the Tap app
2. Go to your Cash Wallet
3. Select your desired fiat currency
4. Choose between bank transfer or debit card
5. Complete the transaction

Once the bank clears the funds, your wallet will be credited and ready to use. You can hold the funds as long as you like, or send them back to your bank at any time with just a few taps.

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Scarcity is a simple economic term that refers to the gap between supply and demand, looking at the concept of "there's just not enough to go around". Typically, when a resource or asset becomes scarce this instigates an increase in price. Let's learn more about scarcity and how it differs from shortage, and how it pertains to the financial world. 

What is scarcity?

According to economics, scarcity is the lack of plentiful resources in comparison to theoretically infinite wants. This term refers to this definition; any resource with a non-zero cost associated with consuming it means that it's scarce to some degree.

The concept of scarcity often drives people to make decisions about how they want their resources allocated so that everyone can satisfy not just their basic needs, but also additional wants whenever possible.

What are the three causes of scarcity?

Scarcity is a term that economists use to describe the limited availability of a good or resource, turning some things that might have once been abundant into scarce resources. The root causes can be broken down into three categories: 

• Demand-induced scarcity: when consumer demand outweighs supply, e.g. face masks in the wake of the global pandemic. 
• Supply-induced scarcity: This happens when outside forces make a resource less attainable, decreasing supply with little impact on demand. E.g. commonly with a natural resource, such as water in a drought.
• Structural scarcity: When some have greater access to a resource than others. Structural scarcity often happens because of political or economic reasons.

Scarcity in the sense of natural resources

We usually think of scarce resources as natural resources that exist on Earth without humankind's intervention, such as gas, coal, or water. These commodities often have a limited supply. While some can be produced (like food), others will be gone forever once used up (such as oil).

The scarcity of natural resources also generally increases with growing populations. This brings in relative scarcity, which refers to the scarcity of a resource in one region while it may be more abundant in another. This concept applies not only to commodities but also to services that rely on these resources.

Scarcity in terms of the economy

Economic scarcity occurs when the quantity individuals want to purchase exceeds the amount available for trade, driving up its monetary value. For instance, Bitcoin, with its limited supply of 21 million coins, illustrates this concept. As the coins become scarcer, their value grows higher, making it a potentially valuable choice for traders.

Scarcity vs shortage

While scarcity and shortage might sound like interchangeable terms, there are several key differences between these terms and very different causes. 

Scarcity looks at the limited availability of something that cannot be replenished, natural resources for example. On the other hand, a shortage refers to a market phenomenon where the demand for something is greater than the quantity supplied at the market price.

When the market is balanced, there is an equal amount of supply and demand for a product. If these become unbalanced, we can have a shortage. Several things can create this scenario.

Firstly, it could be a result of increased demand. This is rarely permanent and can easily be reproduced. Secondly, it could be a result of a decreased supply. If the costs of a product increase causing the manufacturers to create less, and the demand stays the same, this will result in a shortage. In both instances, changes to the market can fix this. 

The main difference between scarcity and shortages is that shortages can usually be solved by altering supply and demand. With scarcity, however, there is a limit on the amount of a resource available with little that can be done to fix this problem. 

How does relative scarcity work?

Relative scarcity is when the distribution of resources can cause a resource to be less scarce for some but not for others. 

For example, in water-rich areas, people seemingly never have to worry about running out of water as the supply is limitless while in other areas people have no access to clean running water. In water-scarce areas, the costs increase, and authorities and citizens have to decide how to efficiently allocate resources. 

This relative scarcity concept can make a natural resource abundant in one area and a scarce resource in another. This is most often the case with raw materials (such as a diamond) and free natural resources (such as water).

The same can be said about land prices when you compare the prices of properties in the countryside versus ​​in the built-up city. Authorities cannot simply produce more land, so the prices increase alongside demand. 

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