Learning the friendly way

Risk management involves identifying and analysing the risks involved, and then choosing whether to accept this risk or make changes to avoid the risk. This process is one we carry out daily, from crossing the street to engaging with a stranger, however, in this realm we’re looking at it from a finance/investment point of view. 

If you have a fund manager or financial adviser, they will generally be responsible for calculating and communicating the risks associated with any type of investment. This will cover the potential returns as well as the potential risks to your capital. 

For example, investing in an emerging asset will hold a lot more risk than buying the stocks of a well-established institution. It’s worth noting that high risk doesn’t necessarily equate to a negative, typically assets with higher levels of risk bring about higher levels of return (high risk, high reward).

Each person’s level of risk will vary from one to another and should be decided prior to making any investments. Once this is established, your investment portfolio will work within those realms so as to manage that level of risk. 

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A common go-to for investors looking to diversify their crypto portfolios, Ripple is arguably one of the most interesting cryptocurrencies. With plenty of controversies and headline visibility, Ripple is pioneering a new path for cryptocurrencies and receiving as much acclaim as it is backlash. Let’s explore what is Ripple (XRP) and why it’s often caught in the spotlight.

What Is Ripple (XRP)?

When understanding what Ripple is it is necessary to understand the three pillars:

1. Ripple Labs is the company managing the various products available.
2. RippleNet is the network that facilitates global payments between financial institutions that operate on top of the distributed ledger database called XRP Ledger.
3. XRP is the cryptocurrency fueling the network and providing a more cost-effective and faster means of transacting money.  

In essence, Ripple is a digital payments platform that facilitates faster and cheaper international payment settlement, remittance systems, and asset exchange. The company provides several products catering to a wide range of financial institutions, essentially building a bridge between the blockchain world and the traditional financial sector. 

Ripple is not based on blockchain technology, and instead uses proprietary distributed ledger technology. It was designed to provide a digital monetary payment alternative to the likes of SWIFT, catering to international and remittance markets.

What is XRP?

Launched in 2013, 100 billion XRP were minted and to date 52 billion are in circulation. These coins remain in the custody of the company and are released into the system gradually (using a different mechanism to mining). 

While XRP is the native coin to the XRP Ledger, the distributed ledger technology can facilitate transactions in multiple currencies. XRP is used to provide a quick conversion between currencies.

History of XRP

Ripple was first conceived as an online payments company in 2004 by Ryan Fugger in Vancouver. Several years later and with the advent of cryptocurrencies, two developers approached Fugger to merge their concepts and create a cryptocurrency of their own. As a result, OpenCoin was established in 2012 by Chris Larsen and Jed McCaleb, with Fugger on the team. 

In September 2013, OpenCoin became Ripple Labs, which was later rebranded to Ripple in 2015. A year later, the company received one of four Bitlicences, a licence required by the state of New York to provide virtual currency activities.

How does Ripple work?

Ripple uses a more complex means of maintaining the network, dissimilar to how other cryptocurrencies like Bitcoin and Ethereum operate. The RippleNet’s ledger is essentially maintained by the XRP community and can process transactions every 3-5 seconds. 

The network is made up of independent validator nodes which verify transactions through a consensus. These nodes are typically made up of a long list of financial institutions, universities and companies outside of the blockchain realm. 

The payment system provides products and services to payment companies around the world and has been integrated into banking systems to improve outdated fiat processes. 

For instance, Ripples’s xCurrent technology was used to launch One Pay FX, a mobile app for international payments from the Spanish banking group Santander. It was also used to power MoneyTap, a mobile app in Japan that effectively connected 61 banks on a mobile app to facilitate domestic payments. Ripple’s products are consistently being implemented around the world. 

Ripple and the SEC

In 2020 one of the biggest lawsuits in the crypto world was ignited when the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple and two executives claiming that they violated investor protection laws. The SEC barred all US exchanges from trading XRP immediately, and a lengthy court case began. 

The court case revolves around whether Ripple is a security, with the SEC claiming the company unlawfully raised $1.3 billion in an unregistered security offering. As the case continues, each party has had their fair share of triumphs and blows, and the case is set to create a precedent for future cryptocurrency trials of similar nature.

This landmark case has been significant in the crypto world due to its potential implications for other cryptocurrencies. If the SEC's view that XRP is a security, rather than a currency, prevails, then other digital currencies could also potentially be classified as securities, subjecting them to additional regulation.

In a recent ruling in the three year case, the U.S. District Judge Analisa Torres ruled that XRP was “not necessarily a security on its face,” partially contradicting the SEC’s claims, and that the company did not break federal securities laws by selling XRP on public exchanges.

The recent decision made by Torres marked the first major triumph for a cryptocurrency firm in a lawsuit filed by the SEC. However, it is important to note that the SEC also achieved a partial success in the case with the judge stating that a portion of the token sales to institutional buyers did qualify as securities transactions.

While the SEC reviews the rulings, Ripple Chief Executive Brad Garlinghouse said that the ruling was "a huge win for Ripple but more importantly for the industry overall in the U.S." 

Ripple vs Bitcoin

When comparing XRP with the first and biggest cryptocurrency, Bitcoin, one must understand their different use cases.

Bitcoin was designed to provide the world with a digital peer-to-peer payment system and store of value while XRP was designed to facilitate international transactions providing a faster and cheaper alternative to fiat transactions. 

While Bitcoin was created to be decentralized and exempt from government and banking controls, Ripple is designed to include the centralized banking sectors in the benefits of the cryptocurrencies and provide them with the services to facilitate these benefits. 

While Bitcoin uses the process of mining through a Proof-of-Work consensus, Ripple uses a network of validators that are established outside of the cryptosphere. Its consensus system is designed to make transaction verification faster and, in the process, uses less energy.

How To Buy XRP

If you’re interested in incorporating XRP into your crypto portfolio, look no further than Tap. As a recent addition to the Tap mobile app, XRP can be bought, sold, traded and stored on the app securely and conveniently.

While the crypto industry continues to grow at a breathtaking pace, one problem continues to run wild. That problem is the fact that blockchains are not interoperable, meaning that they can only exist in their individual nature. Polkadot set out to change this, creating a network that aims to connect multiple blockchains in one simple solution. As a direct competitor to Ethereum, the blockchain network has a different structural approach.

What Is Polkadot (DOT)?

Polkadot is a blockchain network created by one of the Ethereum founders. Through the use of intricate architecture, the platform aims to connect multiple networks through their relay chain and parachain system (more on this below). 

Similar to Ethereum, developers can create their own decentralized apps (dapps) and smart contracts on the network. Referred to as a sharding multichain network, Polkadot aims to provide a platform on which developers can build multiple blockchain networks off a common standard. Traders can then trade a range of products built on the network, similar to how ERC-20 tokens are traded.

Who Created Polkadot?

Founded in 2016, Polkadot was created by one of the Ethereum co-founders, Gavin Wood, alongside Peter Czaban and Robert Habermeier. Woods notably created the Ethereum language Solidity, which allows developers to create dapps on the Ethereum network. 

Wood is also the founder of Parity Technologies and the president of Web3 Foundation. Web3 Foundation is a Swiss foundation that was designed to facilitate a user-friendly, open-source decentralized web. The company's approach to crypto is one of its kind and sets it above any other competitor.

How Does Polkadot Work?

As mentioned above, Polkadot utilizes a relay chain and parachain system. Each parachain is a blockchain in itself, however, they all rely on the relay chain to facilitate transactions. These blockchains work in a "parallel" manner (hence the name) and can each hold their own tokens and individual use cases. The relay chain provides blockchain support to the parachains on the network.

Finalizing the transactions and being responsible for maintaining network security, the relay chain is able to facilitate 1,000 transactions per second (TPS). Utilizing a hybrid consensus mechanism, the enterprise network has created proof-of-stake (PoS) and a nominated-proof-of-stake (NPoS) model. 

Through this variation, anyone can stake DOT in a particular smart contract and perform network roles such as being a :

• Validators (validate data in parachain blocks, vote on network changes)
• Nominators (select validators by delegating their staked DOT to them)
• Collators (nodes with full histories of each parachain, that transfer this information into blocks for the relay chain)
• Fishermen (responsible for monitoring the network and reporting bad behaviour to the validators)

These four roles allow Polkadot to have a highly sophisticated user-driven governance system as each role contributes to maintaining and securing the network while eradicating bad behaviour. 

The network is working on a third blockchain functionality known as a bridge. Bridges will allow blockchains on the Polkadot network to interact with "outside" blockchains, essentially allowing tokens to be swapped directly without needing to go through an exchange. 

Through this intensive structuring, Polkadot aims to solve two problems that the blockchain network is currently plagued with scalability and governance. 

What Is DOT?

DOT is the native cryptocurrency to the Polkadot network and is used as a governance and utility token, allowing users to vote on proposed upgrades and used for gas fees. It plays an integral role in maintaining and operating the network. As a digital currency, it can also be used to execute cross-border transactions.

The platform was launched in 2020 and has already established itself in the top 10 biggest cryptocurrencies. 

Does Polkadot Have A Max Supply Cap?

To answer the question "what is the total supply of Polkadot" the answer is that there isn't one. The network opted to leave the total number of DOT infinite. At the time of writing the circulating supply was just short of 1 billion coins.

What Is The Difference Between Polkadot And Ethereum?

A common question in the crypto community, not just because they share similar use cases but also because the two networks share a founder. Both networks provide a platform on which developers can create their own blockchains, and following the launch of Ethereum 2.0., will both be using a PoS consensus. 

Structurally the Polkadot platform differs in that it makes use of parachains and a relay chain. This is a unique feat in the blockchain industry. Through this structure, the network aims to improve on several of Ethereum's functionalities and deliver a trifactor of governance, scalability and interoperability to the blockchain industry, without compromising security. 

How Can I Buy Polkadot?

If you're looking to incorporate Polkadot (DOT) in your cryptocurrency portfolio, look no further than Tap Global. A recent addition to the exchange's portfolio, users can buy, sell, trade and store DOT directly through the professional app. Whether looking to trade DOT for its technology and smart contract capabilities, or to tap into a new market, Tap allows traders to diversify their cryptocurrency portfolio in one secure location.

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Overexposure is a common pitfall in trading, which occurs when a trader invests too heavily in a single asset, exposing themselves to a significant amount of risk. If the asset does not perform as expected, the trader's entire portfolio can suffer significant losses.
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To mitigate the risks of overexposure, traders can employ a strategy known as diversification. This involves investing in a range of assets across various industries and sectors, spreading out the risk and increasing the likelihood of positive returns. By diversifying their portfolio, traders can reduce the impact of a single asset's poor performance, as losses in one area can be offset by gains in others.
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Avoiding overexposure is an essential aspect of risk management, as it helps traders balance potential gains against potential losses. While it may be tempting to invest heavily in a single asset that appears to be performing well, this strategy can be risky, as even the most successful assets can experience significant losses due to unforeseen events or changes in the market.
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In addition to diversification, there are several other strategies traders can use to avoid overexposure. These include setting stop-loss orders, which automatically sell an asset if its price falls below a specified threshold, and regularly reviewing and adjusting investment strategies based on market conditions and performance.
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It is also important for traders to conduct thorough research before investing in any asset to ensure they fully understand the potential risks and rewards. By being informed and educated, traders can make more informed decisions about their investments and minimize the risks of overexposure.
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In conclusion, overexposure is a common risk in trading that can have significant consequences for a trader's portfolio. Diversification is an effective way to mitigate the risks of overexposure, and traders can also use other strategies such as setting stop-loss orders and regularly reviewing their investments.

Litecoin is part of the first generation of altcoins to emerge after Bitcoin ignited the crypto revolution. This peer-to-peer cryptocurrency is a popular option when it comes to transacting in the real world and investors' portfolios, and has been a permanent feature in the top 15 biggest cryptocurrencies by market cap for years. 

What Is Litecoin?

Litecoin was launched in 2011 as an alternative to Bitcoin, providing users with a faster means of transacting money over the internet. While it was never designed to replace Bitcoin, Litecoin was created to complement the original digital money. Litecoin is often referred to as "digital silver" compared to Bitcoin being referred to as "digital gold".

Litecoin is widely considered to be one of the most successful altcoins. Created as a hard fork off of Bitcoin's blockchain, Litecoin holds many similarities in the way it functions, however, the team behind the open-source cryptocurrency incorporated several features to ensure that the network operated in a faster manner.

These include changing the amount of time it takes to process transactions, the maximum total supply, the hashing algorithm, and charging very low transaction fees. Compared to Bitcoin's 21 million total supply and 10-minute transaction processing time, Litecoin has a maximum supply of 84 million LTC and can process transactions in 2.5 minutes. It also opted to use a Scrypt hashing algorithm over the SHA-256 one.

The network is known for pioneering advanced crypto features like the Lightning Network and Segregated Witness, both of which have since been implemented by the Bitcoin network. 

How Does Litecoin Work?

As Litecoin is based on Bitcoin's software, they function in very similar ways. Through the Proof-of-Work consensus, all transactions are executed through mining. When a transaction enters the mempool (pool of pending transactions) it is soon picked up by a miner who will then ensure that all the details are accurate (including valid wallet addresses and available balances).

The first miner to solve a cryptographic puzzle is awarded the task of executing the transactions and in turn, earns a reward. At the time of writing the reward was 12.5 LTC, however, after every 840,000 blocks mined the reward halves in what is known as a halving reward. This mechanism is in place to manage the supply of new tokens entering circulation as each block mined releases minted new tokens.

As mentioned above, transactions are executed in 2.5 minutes, provided there is no congestion on the network, making it attractive to merchants and other service providers. The cost of making a transaction on the Litecoin network ranges from $0.03 or $.04 US cents.

Litecoin vs blockchain technology

Litecoin, like many other cryptocurrencies, is built on blockchain technology. It relies on the blockchain as the underlying technology to facilitate secure and decentralized transactions.

Litecoin transactions are facilitated by the blockchain through a decentralized ledger. When a transaction occurs, it is grouped with other transactions into a block. Miners then validate the transactions and add the block to the Litecoin blockchain. This process ensures the transparency and integrity of Litecoin transactions.

Blockchain plays a crucial role in securing Litecoin transactions by providing a decentralized and immutable record of all transactional activity. Each block is linked to the previous block, forming a chain, making it extremely difficult for malicious actors to alter past transactions. The distributed nature of the blockchain network ensures that no single entity has control over Litecoin transactions, enhancing security and trust in the system.

What gives Litecoin its value?

The value of Litecoin is determined by supply and demand, often determined by trade activity on exchanges. Due to its global liquidity and finite supply, Litecoin is a deflationary currency and has witnessed price gains over the years, making it an attractive option for investors in the global financial landscape over the years. 

What is Litecoin used for?

Litecoin is a peer-to-peer payment system providing both a medium of exchange and a store of value. Due to its fast transaction times and secure network, Litecoin is often favored when making transactions that are time-sensitive, i.e. paying for a coffee or at a restaurant. LTC is widely used by merchants and service providers around the world and has experienced increased crypto adoption and investment over the last decade.  

Who created Litecoin?

The Litecoin project is the creation of a former Google engineer and MIT graduate named Charlie Lee. Two years after creating Litecoin, Lee would go on to become the Director of Engineering at a large cryptocurrency exchange. In 2017, Lee rejoined the team as managing director of the Litecoin Foundation, a non-profit organization dedicated to the development of the blockchain platform and its technology.

Litecoin development and community

Litecoin's development process involves a dedicated team of developers who work on improving the Litecoin software and its functionalities. It follows a transparent and open-source approach, allowing anyone to contribute to its development and propose changes.

The Litecoin software undergoes regular updates and enhancements to ensure it remains secure, efficient, and compatible with emerging technologies. These updates often introduce new features, improve performance, and address any identified vulnerabilities.

Litecoin has a vibrant and active community that actively participates in its evolution. Community members provide feedback, report bugs, and contribute to discussions on Litecoin's future development. Their contributions range from code contributions from developers to community-driven initiatives, fostering a collaborative environment and shaping the direction of Litecoin's growth.

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Know your customer also known as "KYC" is a regulatory requirement imposed by the Financial Crimes Enforcement Network to combat money laundering, terrorism financing, and fraud prevention. The requirements for KYC are determined on an industry-by-industry basis. Fintech businesses and the Bank sector typically requires KYC of customers who open a new account with them.

KYC ensures that financial institutions know their customers' identity well enough to understand where funds came from for deposits or how payments will be made before starting to use the company's services. KYC is an efficient first line of defense in combating terrorism financing by verifying customer identities to help identify any potential links to terrorist organizations, bribery, corruption, individuals with a history of money laundering.

KYC is an important measure in anti-money laundering regulations, making it a safety guard for cryptocurrencies. Financial institutions and regulated service providers such as Tap boast robust KYC process to protect our consumers so that you can feel more confident that your funds will remain secure no matter the business environment circumstances.

How does KYC work?

Within the Finance sector, any company or project must meet strict rules and regulations that require to have rigorous identification checks (also called regulatory compliance) such as verification of address information, validation of residency status. Apart from verifying a customer's identity, it's also important to confirm the user's location and address. Your identity documents will provide basic data like your name and date of birth, but more is needed to establish your residence, for example.

During a standard Know Your Customer process, you will be asked for several documents:

-A proof of identity ( such as passport, ID card, driving license)

-A proof of residence

-A selfie (to prove that it's you)

The KYC must be completed at the initial stage as well as on an ongoing basis so that businesses can deliver services or goods to clients. It is a best practice for any business offering financial services to re-verify the identity of their customers at regular intervals to ensure AML. Sometimes new customers have to go through several steps of verification before they can start any financial transaction/investment using the service of the company.

KYC Around The World:

KYC regulations can vary from country to country, but there is a lot of international cooperation on the basic data information needed. For example in America, KYC and AML processes are driven by financial crime prevention legislations such as The Bank Secrecy Act (2001) and Patriot Act (2006). In Europe, KYC compliance regulation falls under EU Anti-Money Laundering Directive with PSD2 providing additional regulatory guidance for all countries within the Union. Internationally however it's been agreed that FATF should coordinate multinational cooperation when it comes to regulatory conditions.

The Benefits: 

In spite of the time it takes to set up accounts, KYC identity verification is worth it when taking into account the benefits, keeping your funds safe, protect you from identity theft, fraud, and other illegal activities is largely the result of robust KYC control. These procedures ensure that financial service providers are not only safe but trustworthy. Trade Crypto with Confidence with regulated companies like Tap boasting robust KYC procedures to safeguard its customer assets and information.

In short: KYC is a common regulatory requirement that financial service providers are obliged to fulfill in order for businesses to operate under the law and consumers should take KYC seriously. KYC requirements differ across the financial sector. It is a necessary measure in anti-money laundering regulations, making it an important safety guard for cryptocurrencies as well as customer assets by preventing fraudulent activity. KYC in the Fintech or Bank sector is generally imposed on new customers who open a new account.

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