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Digital assets in the cryptocurrency industry refer to any form of value that exists in a digital format and is built on blockchain technology. Beyond digital currency, these assets are cryptographically secured and decentralised and can be transferred, stored, or traded electronically.
The origins of digital assets
The concept of digital assets in the crypto space began with the introduction of Bitcoin in 2009 by an anonymous person or group using the pseudonym Satoshi Nakamoto. Bitcoin was the first decentralised cryptocurrency, designed as a peer-to-peer electronic cash system. This breakthrough then paved the way for the development of numerous other digital assets, and the widespread adoption of blockchain technology.
Different types of digital assets
Cryptocurrencies
Digital or virtual currencies that use cryptography for security. Examples include Bitcoin, Ethereum, and Dogecoin.
Tokens
- Utility Tokens: Provide access to a product or service within a specific ecosystem.
- Security Tokens: Represent ownership in an asset, similar to traditional securities.
- Governance Tokens: Grant voting rights in decentralised autonomous organisations (DAOs).
Non-Fungible Tokens (NFTs)
Unique digital assets that represent ownership of a specific item or piece of content, often used for digital art, collectables, and gaming items.
Stablecoins
Cryptocurrencies designed to maintain a stable value, often pegged to a fiat currency like the US dollar.
Central Bank Digital Currencies (CBDCs)
Digital versions of national currencies issued by central banks.
The importance of digital assets
Digital assets are reshaping the financial landscape in several key ways. Firstly, they're driving innovation by introducing new methods of transferring value and creating unique investment opportunities. Thanks to their decentralised nature, these assets reduce dependency on traditional financial middlemen, making transactions more direct. This technology is also expanding financial access to underserved populations around the world, bringing banking services to those previously excluded.
Next, smart contracts add another layer of utility, enabling automated, trustless transactions and paving the way for sophisticated financial tools and information, while blockchain, the underlying technology, boosts transparency in both transactions and ownership records.
When it comes to international money transfers, digital assets often prove faster and more cost-effective than conventional methods.
Lastly, through tokenisation, physical assets can be represented digitally, potentially increasing their liquidity and making them more accessible to a broader range of investors. These combined features position digital assets as a transformative force in the world of finance, and far beyond.
The future outlook
There’s no denying that the future of digital assets in the cryptocurrency industry looks bright, with several exciting developments on the horizon. We're likely to see wider mainstream adoption as traditional financial institutions and businesses increasingly accept these assets for everyday transactions.
While governments around the world work on creating clearer regulations, this is believed to bring more stability and attract more institutional investors and adopters to the industry. Technological advancements may also improve interoperability between different blockchain networks and solve current scalability issues, allowing for higher transaction volumes at lower costs.
Digital assets could also find new uses in the Internet of Things, enabling micropayments for smart devices while the decentralised finance (DeFi) sector is expected to offer sophisticated alternatives to traditional financial services.
As environmental concerns grow, the industry may shift towards more energy-efficient methods. Privacy enhancements and the tokenisation of real-world assets like real estate could further expand the use cases for blockchain technology.
Additionally, many countries are exploring central bank digital currencies (CBDCs), which could significantly impact global finance.
While challenges like regulatory hurdles, security concerns, and the need for public education remain, the potential for innovation in the financial sector is immense. As digital asset technology matures and adoption grows, it's destined to play a crucial role in reshaping our understanding and use of money and value in the digital age.
A crypto wallet address is the blockchain equivalent of a bank account, from where users can send and receive cryptocurrencies or other digital assets. Compliant with specific blockchain networks (i.e. Bitcoin wallets hold Bitcoin while Ethereum wallets hold Ethereum), these wallets not only “store” your assets, but also facilitate all the transactions.
What is a wallet address?
A wallet address is typically a long string of alphanumeric characters, usually between 26 and 35 characters long. For example, a Bitcoin address might look like this: 1BvBMSEYstWetqTFn5Au4m4GFg7xJaNVN2. Each blockchain network (e.g. Bitcoin, Ethereum) has its own format of addresses.
Every crypto transaction gets stored on the blockchain, meaning that anyone can see it. If you know someone's wallet address, you can look up all the transactions they've ever made, but while you can see what's happening, you can't tell who's behind the transactions. Wallet addresses don't have names attached to them, so people can use crypto without everyone knowing who they are.
Wallet addresses role in the blockchain ecosystem
Wallet addresses are the backbone of blockchain transactions. They work like digital IDs, letting you send and receive crypto without sharing personal info.
The blockchain network uses these addresses to keep track of how much crypto everyone has, so when you make a transaction, your address shows who's sending and who's getting the crypto, using wallet addresses and not personal information.
In some networks, addresses can even represent automated programs called smart contracts. The cool thing about wallet addresses is that they let anyone see and verify transactions, but they keep your real identity private.
Safety tips for keeping your crypto safe
- Double-check addresses
Always verify the recipient's address before sending cryptocurrency. Even a small error can result in permanent loss of funds.
- Never share your private keys
While addresses (also referred to as public keys) are designed for public use, sharing your private keys is like sharing your pin code.
- Beware of phishing
Don't trust addresses received through unsolicited emails or messages. Always verify address information through official channels when making payments.
- Use hardware wallets
For large amounts, consider using hardware wallets that generate and store addresses offline.
- Understand address formats
Be aware that different cryptocurrencies use different address formats. Sending funds to the wrong type of address can result in lost funds.
- Use QR codes
When possible, scan a QR code to reduce the risk of typos.
- Monitor your addresses
Regularly check the activity associated with your wallets to detect any unauthorised transactions.
Whether you’re an active trader or have bought Bitcoin once, it's important to understand wallet addresses - they're key for sending and receiving crypto. While they help keep you somewhat anonymous, you still need to be cautious to keep your crypto safe.
Users with a Tap account automatically gain access to a unique crypto wallet for all the currencies supported. These wallets can be managed from one secure location, making it not only convenient but also accessible at all times, leaving you in control.
What is market cap?
Market cap (short for market capitalisation) measures the total value of a company or cryptocurrency. For traditional companies, it's calculated by multiplying the total number of outstanding shares by the current market price per share. In the cryptocurrency world, the market cap is determined by multiplying the circulating supply of tokens by the current price per token.
For example, if a cryptocurrency has 10 million tokens in circulation, each valued at $5, its market cap would be $50 million.
Why is market cap important?
Here are several reasons why the industry uses the market cap metric system:
Valuation metric
Market cap provides a quick snapshot of a company's or cryptocurrency's total value. It allows investors to compare different assets on an equal footing, regardless of their individual token or share price.
Risk assessment
Generally, larger market caps indicate more established and potentially less volatile assets. Smaller market caps often suggest higher growth potential but also higher risk.
Investment decisions
Many investors use market cap to categorise their investments. For instance, they might allocate a certain percentage of their portfolio to large-cap stocks or top market cap cryptocurrencies.
Index inclusion
Many stock market indexes, like the S&P 500, use market cap as a criterion for including a business. Similarly, cryptocurrency indexes often rank assets by market cap.
Liquidity indicator
A higher market cap often correlates with better liquidity, meaning it's easier to buy or sell large amounts without significantly impacting the price.
What does market cap mean within the industry?
In both traditional finance and the cryptocurrency sector, market cap plays a crucial role in how assets are perceived and categorised:
- Asset Classification
Large-cap: Generally considered the most stable and established.
Mid-cap: Often viewed as having good growth potential with moderate risk.
Small-cap: Typically seen as higher risk but with potential for significant growth.
In the stock market, these categories might be defined as:
Large-cap: Over $10 billion
Mid-cap: $2 billion to $10 billion
Small-cap: $300 million to $2 billion
The cryptocurrency market uses similar classifications, though the specific thresholds may vary.
- Market dominance
In the crypto world, market cap is used to calculate the dominance of a particular cryptocurrency. Bitcoin's dominance, for instance, is its market cap as a percentage of the total cryptocurrency market cap. This metric helps gauge the relative strength and influence of different cryptocurrencies.
- Project legitimacy
While not foolproof, market cap can be an initial filter for assessing a project's legitimacy and adoption. Projects with higher market caps have generally attracted more investment and may have more established use cases.
- Investment strategies
Different market cap segments often attract different types of investors. Large-cap assets might appeal to conservative investors or institutional players, while small-cap assets might attract risk-tolerant investors looking for high growth potential.
- Market trends
Shifts in market cap distribution across different types of cryptocurrencies can indicate broader market trends and investor sentiment.
- Fundraising and valuation
For startups and new crypto projects, projected market cap is often used in fundraising to justify valuations and token prices.
- Regulatory attention
Regulators often pay more attention to assets with larger market caps due to their potential impact on investors and the broader financial system.
- Media coverage and public perception
Assets with larger market caps tend to receive more media coverage and public attention, which can further influence their perceived importance and value.
It's important to note that while market cap is a useful metric, it has limitations. It doesn't account for factors like circulating supply vs. total supply in cryptocurrencies, the impact of large holders, or the fundamental value proposition of a company or project. Therefore, while market cap is a crucial indicator in both traditional finance and the crypto industry, it should be considered alongside other metrics and qualitative factors when making investment decisions or assessing the overall health and potential of an asset.
What is a stablecoin?
A stablecoin is a cryptocurrency that aims to keep its value consistent with a specific asset or group of assets, in other words, its value is pegged to the underlying asset. Unlike volatile cryptocurrencies such as Bitcoin or Ethereum, stablecoins aim to provide the benefits of digital currencies without the wild price fluctuations. Most commonly, stablecoins are pegged to fiat currencies like the US dollar, with one coin typically equaling one dollar.
How do stablecoins maintain their value?
Stablecoins use various mechanisms to maintain their peg:
- Collateralised stablecoins
These are backed by reserves of the pegged asset. For every stablecoin issued, there should be an equivalent amount of the asset held in reserve (in a bank). Examples include USDC and USDT.
- Algorithmic stablecoins
These use smart contracts and algorithms to automatically adjust supply based on demand, theoretically maintaining the peg. An example was TerraUSD (UST) before its collapse.
- Hybrid models
Some stablecoins combine collateral backing with algorithmic mechanisms.
Maintaining the peg often involves continuous market operations, such as minting new coins when demand increases or burning excess supply when demand decreases.
What does it mean when a stablecoin depegs?
When a stablecoin "depegs," it means its value has deviated significantly from its intended peg. For instance, if a USD-pegged stablecoin trades at $0.95 or $1.05 instead of $1.00, it's considered depegged. Minor fluctuations are normal, but substantial or prolonged deviations indicate a problem.
Why does this happen?
Stablecoins can depeg for several reasons:
- Market pressure: Extreme market conditions can lead to massive sell-offs, overwhelming the stabilising mechanisms.
- Loss of confidence: If users doubt the stablecoin's backing or the issuer's credibility, they may rush to sell, causing a depeg.
- Insufficient collateral: If a stablecoin isn't adequately backed by reserves, it may struggle to maintain its peg during high-stress periods.
- Algorithm failures: For algorithmic stablecoins, flaws in the stabilising mechanism can lead to depegging.
- Regulatory issues: Legal challenges or regulatory crackdowns can shake confidence in a stablecoin.
- Liquidity crises: If there's not enough liquidity in the market, it can be difficult to maintain the peg.
- External economic factors: Major economic events or changes in monetary policy can affect a stablecoin's stability.
What are the consequences of a stablecoin depegging?
The consequences of a stablecoin depegging can be severe and far-reaching:
Loss of user funds
Investors holding the stablecoin may face significant losses if the value drops substantially.
Market volatility
A major stablecoin depegging can trigger broader crypto market sell-offs and instability.
Loss of trust
Depegging events can erode confidence in the entire stablecoin market and the specific project.
Regulatory scrutiny
Such events often lead to increased regulatory attention on stablecoins and the broader crypto industry.
Disruption of crypto ecosystems
Many DeFi protocols rely on stablecoins; a depeg can disrupt these systems. And as stablecoins are often used as collateral, depegging can trigger mass liquidations and potential system-wide instability.
Project failure
In extreme cases, like with Terra/LUNA, a stablecoin depeg can lead to the complete collapse of the associated project and ecosystem.
Understanding the mechanisms behind stablecoins and the risks of depegging is crucial for anyone involved in the cryptocurrency space. While stablecoins play a vital role in the crypto ecosystem, providing a bridge between traditional finance and the volatile world of digital assets, they are not without risks. Be sure to always do your own research before engaging in the crypto space.
Understanding what crypto trading pairs are is important for all levels of trading, whether new to the market and looking to buy cryptocurrencies or wanting to engage in advanced arbitrage strategies.
While the concept has been around in the stock markets for a while, it came about in the crypto industry due to a number of exchanges only allowing bigger cryptocurrencies like Bitcoin and Ethereum to be purchased with fiat currencies. While other cryptocurrencies were available on the platform, they could only be bought by trading BTC or ETH. Hence, it became necessary for a relationship to be established in terms of value between the cryptocurrencies being exchanged for one another.
When it comes to investing in cryptocurrencies there are plenty of options available, it only makes sense that markets open allowing one digital asset to be traded for another.
Crypto Trading Pairs Explained
Every cryptocurrency has an established value against a fiat currency, while this will continuously change depending on the market conditions affecting it, the use of the same fiat will remain. Most sites default to present a cryptocurrency's value in USD, however, they also allow for changes to be made (to GBP, EUR, etc). This is referred to as a base currency.
A trading pair is when two cryptocurrencies can be traded against each other, as opposed to a cryptocurrency and fiat. For example, BTC/LTC, or ETH/DOGE. In order to acquire the one, the other will need to be exchanged. In this case, the base currency is now a cryptocurrency.
If you would like to buy DOGE with DOT but the exchange does not have this trading pair available, you would need to exchange DOGE for BTC, and then buy DOT with the BTC. Unfortunately, this will incur more fees, illustrating the convenience of trading pairs.
How Do Trading Pairs Work?
Exchanges typically allow you to compare costs between cryptocurrencies, i.e. how much Bitcoin you will need to pay for Litecoin. If you are unable to load your account with fiat, you can still trade using cryptocurrencies, depositing one and trading it for another.
Trading pairs allow you to establish a cryptocurrency's value in terms of another cryptocurrency.
Say you buy ETH/LTC, this means that you are buying ETH in exchange for LTC. LTC is then the base currency. If you were selling ETH/LTC, you would be selling ETH and accumulating LTC. Ethereum and Bitcoin are the most common base currencies, however, the bigger the exchange the more trading pairs are on offer.
Before engaging in any trading pairs take a look at the fees and taxes associated with the trade on the exchange's website, as sometimes some cryptocurrencies can incur higher fees.
In Conclusion
Trading pairs are when a cryptocurrency is valued against another cryptocurrency and capable of being traded for one another. Trading pairs provide an essential role in the crypto economy. These days there are hundreds of trading pairs on offer, allowing traders to make informed decisions, find better prices, and perform a greater number of transactions.
Getting paid in cryptocurrencies has opened the global gig economy to endless opportunities. Gone are the days of needing to be in the same country, or even on the same continent, as your employer. Cryptocurrency jobs are not only more accessible but also more acceptable.
In this article, we’re breaking down where you can find jobs that specifically pay in cryptocurrencies. Before we do though, let’s touch base on the advantages the new digital currency realm is offering.
The Advantages Of Being Paid With Blockchain Technology
The ever-evolving blockchain industry is now integrating cryptocurrencies into traditional job markets, from temporary gigs to full-time jobs, anyone can now get paid in crypto.
The decentralized world of cryptocurrencies provides many demographics with many advantages. For employees, these advantages allow the job market to be blown wide open as international payments are now easily accessible and don’t come with high transaction costs and delays.
Due to the nature of crypto transactions, payments can be executed in a matter of minutes with minimal transaction fees offering a quick and cost-effective solution to moving money across borders. The minimal transaction fees also allow freelancers to take on many smaller projects, an opportunity otherwise impossible with international fiat transactions.
Arguably the biggest advantage to cryptocurrency jobs is that anyone anywhere can now work for anyone anywhere, as borders are no longer a consideration. With many freelancers turning to remote work after the pandemic, the opportunity to work on international projects and be conveniently paid for doing so has increased dramatically.
No matter your skill set or ability, there is likely a business out there willing to hire you.
Where Job Seekers Can Connect With A Crypto Job Board
LaborX is a job board-style website that connects employers with employees, covering everything from small temporary jobs to full-time ones, from data scientists to marketing managers. The platform also offers a wide range of cryptocurrencies as payment options.
LaborX is owned and operated by a blockchain company that also offers HR software solutions, which makes it feel more accountable and solid.
Despite what the name suggests, Jobs4Bitcoins offers a range of crypto-paying jobs. Run as a Reddit channel, r/Jobs4Bitcoins, the forum allows anyone to post a job they require or skills they can provide.
While not run in the traditional job-seeking website sense, the opportunities for finding work and self-promotion are endless. There is obviously no vetting of employees or employers, however, so bear this in mind when engaging on the platform.
Blocklancer matches job seekers with job providers and pays in Ethereum. If you’re not fond of Ethereum, no problem, you can easily trade it for another cryptocurrency or fiat currency through the Tap app once you have received the funds.
The platform covers a wide range of jobs, from research analyst to content creator to experts in the field of blockchain and ICOs. It also offers an option allowing users to help mediate disputes.
If the formal job market is not what you are looking for, you can earn tips in Bitcoin for offering suggestions. Not only Bitcoin, you can also earn Bitcoin Cash, NANO, and Tezos.
Users post their questions and then should they find your idea or suggestion helpful, will tip you.
PompCryptoJobs was created to connect job seekers with providers within the crypto space. The platform caters to an extremely wide range of fully-paid crypto positions, from writer to product designer to data scientist.
The platform is professional, neat and informative, and is used by some of the biggest companies in the crypto space.
Whether you're a research analyst, marketing manager or data scientists, there are plenty of job opportunities that pay in crypto.
Final Thoughts: How To Get Paid In Crypto
If you’re unsure on how to go about getting an account that enables you to be paid in Bitcoin or other cryptocurrencies, look no further than Tap.
Tap offer to freelancers and self employed accounts, enabling you to receive payments in both crypto and fiat currencies. When creating an account, you will immediately gain access to a number of crypto wallets, as well as dedicated money accounts from where you can access the individual wallet addresses. Simply send the wallet address to your employer and the funds will clear in minutes (depending on the network).
On top of that, Tap also allows enables you to pay your bills and everyday purchases with your Tap card to spend your fiat and cryptocurrencies in a swipe of the wrist.
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