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.

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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

1. Double-check addresses

Always verify the recipient's address before sending cryptocurrency. Even a small error can result in permanent loss of funds.

2. 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. 

3. Beware of phishing

Don't trust addresses received through unsolicited emails or messages. Always verify address information through official channels when making payments.

4. Use hardware wallets

For large amounts, consider using hardware wallets that generate and store addresses offline.

5. 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.

6. Use QR codes

When possible, scan a QR code to reduce the risk of typos.

7. 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.

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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:

1. 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.

2. 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.

3. 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.

4. 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.

5. Market trends

Shifts in market cap distribution across different types of cryptocurrencies can indicate broader market trends and investor sentiment.

6. Fundraising and valuation

For startups and new crypto projects, projected market cap is often used in fundraising to justify valuations and token prices.

7. 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.

8. 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.

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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. 

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You might have come across the term p.a. in traditional investment cycles, but how does it relate to crypto? In this article, we’re breaking down what p.a. means, how to get in on it and how it relates to the crypto industry. 

What does P.A. mean?

P.a. is an investment term that stands for per annum. This refers to the interest an investor can gain over a year's period and provides insight into the yields that the investment will generate. This is calculated on a simple basis and not compound. 

You might see digital wallet platforms offering reward rates of 8% p.a. Or 14% p.a., this tells the potential investor that the platform will provide 8% of the initial investment, over a 12 month period. 

PA can also stand for price action, a popular term used on crypto Twitter. In this piece we're focusing on the annual interest rates version.

How can users make money with crypto assets?

There are several ways in with industry participants can earn cryptocurrency. Below we outline the most widely used, and safest options. Be sure to check each option with the relevant blockchain network as these will differ from network to network.

Crypto Mining

Crypto mining can be a lucrative means of generating a passive income, however, the costs might run high depending on where you live and what cryptocurrency you are mining. Each network has its own way of minting new coins, which require different hardware and electricity means. 

Bitcoin, for instance, is a Proof of Work network that requires miners to use large amounts of energy as they race to finish a complex cryptographic puzzle. The first to complete this is rewarded with mining the next block and receiving the associated payoffs. 

Bitcoin requires a large amount of electricity, not practical in areas with high electricity costs, and either a graphics processing unit (GPU) or an application-specific integrated circuit (ASIC), which can also be costly. 

If you wish to get involved with mining cryptocrrencies be sure to do adequate research on what will be required and what income this could generate before investing any money. 

Crypto Staking

Crypto staking is an alternative minting solution for Proof of Stake networks, such as Cardano and soon-to-be Ethereum. Crypto staking requires users putting their funds in a smart contract usually for a predetermined lock up period to confirm transactions on the network. This will typically require a minimum amount, so as to ensure that individuals hold a “stake” in the network and will act on good intentions. 

When crypto traders stake the minimum balance, a node will deposit these funds into a staking pool on the network, similar to a deposit. The bigger the stake, the higher the chances of that user, now referred to as a node, being chosen to verify transactions. When the node is chosen to confirm transactions, they will create a new block and receive a reward for adding it to the blockchain.

Reward rates are specific to each blockchain network so be sure to check the details relevant to platform on which you wish to stake. As a security mechanism, the staked coin in the network is typically taken away if the node acts with ill intent.

Passive Income

There are a number of crypto initiatives that allow users to earn passive income through their crypto assets. These work in a similar way to holding funds in a wallet, however, these wallets will likely be on a cryptocurrency exchange or DeFi wallet and the user will typically not be able to access the funds for a certain period of time. 

Over the duration the user will earn interest as stipulated in the initial agreement. Note that p.a. Values are subject to change with market fluctuations, rising when prices rise and falling when an asset’s price takes a dip. This typically works in the same way as a savings account.

Its worth noting that the onus lies on the traders to pay taxes on any income generated. It is important to check the crypto specific tax laws in your region.

Disclaimer: This article is intended for communication purposes only, you should not consider any such information, opinions, or other material as financial advice.

Investing is not as easy as the internet makes it seem, with every profit comes plenty of research behind it. Not to mention all the strategies. Similar to trading, investing can at times be time-consuming and demanding. While investing, whether in the stock market or cryptocurrencies or any other asset classes, is beneficial in so many aspects, it can also come with some trial and error. In this article, we take a look at the time-tested dollar-cost averaging and explain why this is considered to be a low-risk strategy.

What is DCA?

DCA is an abbreviation for dollar-cost averaging. You may be wondering what DCA is? To put it simply, DCA is an investment strategy that sees people investing gradually over time rather than dropping a lump sum of money into assets.

Let's say an investor has a total of $10,000 to invest monthly, lump-sum investing would see them entering all that money into an asset market while DCA would have them investing $500 each week or month. Not only does DCA provide your leeway to pay your bills while still investing, but it also protects you from excess loss. While lump-sum investing does have its perks, it also has the potential for big losses.

By investing only what you are willing to lose, you are at no risk of financially crippling yourself. DCA ensures you do not lose all your money on an investment, whereas one wrong trade in lump sum trading can greatly set you back. DCA is a great way for newbies to test the markets and trust in an investment before moving forward, seasoned traders are also a fan of DCA as it allows them to diversify their funds in a more structured way. 

The point of DCA is to avoid market watching and big losses, DCA is the practice of routinely investing smaller amounts, timed over regular intervals, regardless of price. This typically allows the investor to buy an asset at an average cost of a long period of time.

Why and how to use DCA

The how is easily answered, as already stated prior, it is as simple as allocating a set amount aside each month with the plan to invest. You invest your set amount a month routinely, regardless of the price, growing your total shares. But the real question is why? Why is this strategy so popular and why is it so highly recommended? Let's get into it. 

The benefits right from the get-go are clear, you hold less risk of losing everything at once. As the traders' tale goes, only put in what you are willing to lose. Lump-sum investments do not take this approach with caution, putting it all on the line, or a large portion at least.

DCA means that you are continuously putting in small amounts that do not greatly limit your day-to-day life while still growing the value of your portfolio. DCA is a longer-term investment strategy. It also eliminates some of the risks involved with investing.

With DCA, the markets don't matter, you are buying your assets at whatever price they are at and reaping the profits when the price climbs. But also, by purchasing every week rather than all at once, you have the option and ability to buy in on the volatile markets getting better prices per share than someone who puts it all in at once.

This strategy also helps you manage emotional investing, forcing you to hold onto your investment despite FUD being spread, ensuring you don't sell low or buy high.

The DCA conclusion

While there are many investment strategies out there, this is a favoured strategy by many investors, that is not to say it is the only or best strategy, just one to consider. There are many perks that come with DCA, and that's what we wanted to highlight in this piece for you today. DCA provides a sense of commitment that is hard to find, ensuring you secure your space in the market without any added risks. There will always be risks involved with investing, but the DCA strategy finds some ways to minimise those risks in comparison.