Learning the friendly way

For all those curious about the crypto industry ready to dip their toe in the water, this one is for you. Below we share a warm welcome to the industry with a range of helpful resources covering everything from what cryptocurrency actually is to how to buy and store it. For individuals and businesses alike, let's get into it. 

What Is Cryptocurrency?

A great place to start for any people who are crypto-curious, let's cover the basics. Cryptocurrency is essentially digital cash that can be transferred from one person to another without having to rely on an authoritative entity (like a bank or government or financial institution). 

This peer to peer cash system is supported by blockchain technology, a technology that facilitates the transactions and essentially acts as a giant public ledger where anyone can view any transactions that have been made on the network. 

Through the use of blockchain, a decentralised network (meaning that no one is in charge, rather everyone follows the same protocol) of computers is responsible for verifying and executing transactions. Depending on the network this can be done in a few seconds or up to a few minutes, causing big waves in the traditional financial sector.

If you take away just four points from the above, let it be 

• Digital cash
• Peer to peer
• Blockchain technology
• Decentralised

Cryptocurrency gets its name from cryptography currency, as it uses encrypted code (cryptography) to secure and maintain the network. 

Each cryptocurrency will have a value, based on what it was last traded for, a market capitalisation, a circulating supply and a ticker symbol. The ticker symbol would be BTC for Bitcoin and ETH for Ethereum. 

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Let's Take A Look At The Three Biggest Cryptocurrencies

You've definitely heard of Bitcoin, but what about the other top cryptocurrencies? Below we give a very quick breakdown of the other big projects on the scene based on the biggest market caps. When learning about new coins we strongly advise that you do your own research before making any purchases.

Bitcoin (BTC)

A digital cash system that facilitates the quick and cheap cross-border transfer of money. 

Ethereum (ETH)

A blockchain platform that allows developers to create their own decentralised applications on top of theirs. 

Tether (USDT)

A stablecoin, meaning that its value is pegged to a fiat currency, in this case, the US dollar. 1 USDT will always be worth $1. Stable coins are a great way to enter the market as they are less volatile than traditional cryptocurrencies. ‍

How To Store Cryptocurrency

Similar to fiat currencies, cryptocurrencies need to be stored in a wallet. As the currencies are entirely digital, so too must the wallet be. Each cryptocurrency operates off a different network, requiring one wallet for each network. 

For instance, you cannot store Bitcoin in an Ethereum wallet as Bitcoin runs off a separate blockchain. Different to fiat wallets, digital wallets are how transactions take place. From your wallet, you will enter the crypto wallet address of the recipient and execute the transaction from there. 

To purchase and accumulate cryptocurrency, you will first need a wallet. There are a few different types of wallets, but let's keep it simple for now. On Tap, a fully regulated crypto app, users are automatically given a range of wallets, one for each supported cryptocurrency on the network. This allows users to buy, sell, trade, store and manage many cryptocurrencies from one secure app. Simply head to the Tap website and conveniently download the relevant app from there.

How To Buy Cryptocurrency

Buying cryptocurrency used to be a complicated endeavor however with new products on the market it has become simpler and easier to do. Tap's mobile app is a classic example. Buying crypto Tap has never been so easy all you need to do is to create an account.

You will then be asked to confirm your identity through a process known as KYC (Know Your Customer). This is a common practice required by any entity facilitating the sale of cryptocurrencies. The process is entirely integrated and will require you to submit a picture of an identification document and a selfie of you, easy stuff.

Once your account is created, you can then deposit funds. This can be done through debit card or bank transfer. Simply load your fiat wallet with the currency of your choice for free, using a debit card or a bank transfer as a payment method of your choice. 

With a loaded fiat wallet, you are then able to go shopping! Under Assets on the home screen, select Crypto, then find the cryptocurrency you would like to purchase. Simply click Options, then Buy once you are on the cryptocurrency you would like to purchase. The process is as simple and easy as it sounds. 

After buying crypto, the funds will be deposited into your wallet in a fraction of a second once the transaction has been confirmed. Not too complicated, was it? Submerge yourself into the world of crypto today with the Tap app, head to your Google Play or Apple app stores to get started straight away. 

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We have all heard older generations complain about the price of products "nowadays", talking about how $1 used to buy them a movie ticket and popcorn, compared to the average cost of $10 for just a ticket today. They aren't complaining about nothing, this is a very real issue the world is currently facing and it's known as inflation.

Although, with the way the economy has been going lately, hyperinflation may feel like a more fitting term. In basic terms, hyperinflation is referring to a very high and accelerating inflation rate. Let's cover what inflation is, and how this differs from hyperinflation.

What is inflation?

Inflation refers to a decrease in purchasing power related to a specific currency. This means a progressive increase in the price of goods and services results in a certain amount of money being able to buy less over time.

As already stated above, what $1 used to buy back in the day is merely a fraction of what the product or service now costs. Usually, inflation occurs at a gradual rate, however, there have been instances where inflation rates have accelerated at much faster speeds. This rapid acceleration rate leads to the value of a country's currency being diminished at an alarming rate. This is then referred to as hyperinflation.

Hyperinflation is measured when the inflation rate increases by 50% or more in one month.

What causes hyperinflation?

You may be wondering how hyperinflation occurs, and that's a great question. From an economic standpoint, there are two main causes, although external factors can also come into play. External factors might include war, natural disasters, a pandemic, and more, however, here we will be covering the two main causes.

Number one is an increased money supply. Most think that an excess supply of money sounds great, but it can have colossal impacts on a currency if not backed by economic growth. Countries usually grow through trading, businesses, and bringing money into the country from outside the borders.

This issue comes into play when countries print money at an accelerated rate, increasing government debt with central banks which they then have to pay back with interest. This additional interest and debt gets placed on citizens, who are then expected to pay more tax and pay more for products. 

The second is demand-pull inflation. This can also be described as supply vs demand. While some small businesses see this as a benefit, being able to increase prices due to their unique products, the same can not be said for common household items. This inflation occurs when the demand for products goes up, especially as capitalism rises, yet the production of said products can not contend. 

This creates a gap within the supply, making it hard for businesses and economies to make money unless they raise their prices. So again, we see product prices rising thus reducing the purchasing power of a currency. 

The effects of hyperinflation 

One of the most common effects of hyperinflation is the devaluation of currencies, moving those who hold them to switch to more valuable assets. Whether it is investing in the stock market or another currency, this takes additional money out of the currencies' economy and proceeds to make hyperinflation worse. Luckily those who have invested in other means of value are not as affected by this additional pressure.

Previously, inflation in Zimbabwe reached such dire levels that the country ultimately wrote off its national currency and switched over to the US dollar. At one point, their currency was so hyperinflated that their $100 trillion Zimbabwe dollar banknote could only buy a few loaves of bread. This impact affected banks, foreign trading, and basic government services, creating another ripple effect leading to further inflation. It's a problem that continues to occur, ravaging countries and livelihoods around the world.

Hyperinflation and monetary policies

Central banks play a vital role in preventing hyperinflation through the implementation of monetary policies.. As they control the money supply, regulate interest rates, and oversee the stability of the currency, central banks are responsible for maintaining a balance between growth and inflation. Done so by carefully monitoring economic indicators to manage and prevent potential risks of excessive growth and inflation.

In order to keep hyperinflation at bay, governments need to practise responsible fiscal policies, avoiding excessive borrowing and uncontrolled spending. Maintaining a stable exchange rate and encouraging foreign investments can also strengthen economic stability.

How to combat hyperinflation

In an attempt to curb the devastating effects of hyperinflation, below are four measures that governments and central banks could implement.

Tightening money supply

An obvious one, central banks can reduce hyperinflation risks by curbing the rapid increase in the money supply. This involves limiting the printing of new money and implementing stringent monetary policies.

Interest rate adjustments

By raising interest rates, central banks can discourage excessive borrowing and spending, which acts as a means of stabilising the currency's value and mitigating hyperinflationary pressures.

Currency controls

Implementing currency controls can be a smart move to stop money from leaving the country and prevent risky speculation, all while keeping the currency strong during uncertain economic times.

Currency reforms

In extreme cases, currency reforms, such as introducing a new, more stable currency or adopting a foreign currency as legal tender, can be considered to tackle hyperinflation and restore economic confidence, as was the case with Zimbabwe mentioned above.

Examples of hyperinflation in history

These instances from the past where hyperinflation wreaked havoc serve as a clear indication of the devastating economic impact it can have on countries.

Germany (Weimar Republic):

During the early 1920s, Germany experienced one of the most infamous hyperinflation episodes. Printing money to cover war reparations led to the German Mark's catastrophic devaluation, resulting in absurd price increases and widespread economic collapse.

Zimbabwe:

Mentioned above, in the late 2000s, Zimbabwe endured a severe hyperinflationary crisis, reaching unimaginable levels. Rampant money printing and political instability eroded the Zimbabwean dollar's value, rendering it practically worthless and forcing the country to abandon its currency.

Venezuela:

Starting in the 2010s, Venezuela suffered a hyperinflationary spiral driven by a combination of political mismanagement, plummeting oil prices, and economic turmoil. This ongoing crisis has caused immense hardships for the Venezuelan population.

Yugoslavia:

In the 1990s, Yugoslavia grappled with hyperinflation as a result of political fragmentation and war. Spiralling prices led to the eventual replacement of the Yugoslav dinar with new currencies in several successor states.

Hungary:

Post-World War II, Hungary faced hyperinflation of unprecedented proportions. Skyrocketing prices and economic instability plagued the country until it eventually switched to a new currency.

These history lessons serve as cautionary tales, showing us just how terrible hyperinflation can be and why it's crucial to have solid monetary policies in place to protect against these economic disasters.

In conclusion

Hyperinflation, rapidly increasing inflation rates, is a serious economic problem with disastrous effects, as seen in historical examples like Germany, Zimbabwe, Venezuela, Yugoslavia, and Hungary. While central banks play a crucial role in preventing hyperinflation through monetary policies, governments must too play their part and practice responsible fiscal policies.

While inflation rates might feel dire, hyperinflation is highly unlikely to ever take effect in the United Kingdom as The Bank of England and government have many tools at their disposal to identify and prevent the onset.

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In this article, we’re exploring the most recent addition to the list of supported cryptocurrencies on the Tap App, one of the highly esteemed top 20 cryptocurrencies based on market cap, Algorand (ALGO).

What is Algorand (ALGO)?

Algorand is a decentralized blockchain platform that supports the development of a wide range of dapps (decentralized applications). The platform has been used to create dapps across industries like real estate, copyright, microfinance and more. Launching the same month as its ICO, the Algorand mainnet officially went live in June 2019. 

The Pure-Proof-of-Stake (PPoS) network was created to improve efficiency and transaction times within the crypto space, as well as reduce transaction costs. With no mining (due to the PPoS consensus), Algorand represents a more sustainable and energy-reserving contribution to the space. 

A unique aspect of the platform is that as new ALGO enter circulation with the creation of each new block, the newly minted coins are distributed to everyone who holds a certain amount of ALGO in their wallets. 

While the project is relatively new, it has received the backing of big names and has seen impressive company interest. In June 2021, Arrington Capital bet $100 million on the platform after launching a fund supporting initiatives building on Algorand, while fintech infrastructure provider Six Clovers launched a cross-border payment system on the platform. 

The platform was also selected to host the Marshall Islands CBDC. 

Who created Algorand?

The blockchain platform was created by Silvio Micali, a highly regarded contributor to the crypto space and recipient of the 2012 Turing Award. The MIT computer science professor was recognised for his fundamental contributions to “the theory and practice of secure two-party computation, electronic cash, cryptocurrencies and blockchain protocols.” 

The Algorand whitepaper was co-authored by Stony Brook University professor Jing Chen.

When first conceptualised in 2017, Micali wanted to create a platform that not only provided digital transactions but also tracked assets like titles and property. The platform also allows for the creation of smart contracts (decentralized digital agreements) and tokens. 

How does Algorand work?

The Algorand platform is divided into two layers: layer 1, responsible for ​​ensuring the network’s security and compatibility, and layer 2, responsible for more complex developments. 

Layer 1 supports asset creation, smart contracts, and atomic swaps between assets while layer 2 is reserved for more compound smart contracts and dApp development. These two layers allow the network to process transactions more efficiently, with simple transactions taking place on layer 1, while more complex smart contracts are executed off-chain. 

Through the pure proof of work consensus, the two-phase block production is conducted through a propose and vote system where users who stake ALGO are randomly selected to validate and approve each block as it is created. Stakers only need to hold 1 ALGO in order to generate a participation key necessary to become a Participation Node. 

These nodes are coordinated by Relay Nodes which are not actively involved in the verification process but are responsible for facilitating communication among the Participation Nodes.

The more of the native cryptocurrency a user holds, the more likely they are to be selected. This consensus ensures that the platform is secure, decentralized and able to process transactions in seconds as opposed to minutes (as on other networks).

Algorand is able to process over 1,000 transactions per second (TPS) and validate transactions in less than five seconds.

What is ALGO?

ALGO is the native token to the Algorand platform. As the newly minted coins are distributed to all users holding ALGO (whether on an exchange or in a non-custodial wallet) and not just the nodes verifying transactions, holders of the token are able to earn a 7.5% annual percentage yield (APY). 

A total of 10 billion tokens were minted, with roughly 6.8 billion in circulation at the time of writing. These tokens are gradually entered into circulation through predetermined distribution channels. The token distribution for ALGO is as follows:

• 3.0 billion. To be injected into circulation over the first 5 years, at first via auction.
• 1.75 billion. Allocated to participation rewards.
• 2.5 billion. Allocated to relay node runners.
• 2.5 billion. Allocated to the Singapore-based Algorand Foundation & Algorand, Inc.
• 0.25 billion. Allocated to end-user grants. 

How Can I Buy ALGO?

If you’re interested in accumulating this leading blockchain token, you can do so effortlessly through the Tap app. As part of a new string of supported tokens, Tap users will now be able to buy, sell, trade and store the cryptocurrency that everyone is talking about. 

When it comes to understanding Bitcoin, an important aspect to get familiar with is the mining of it. As we explore what is Bitcoin mining and how does it work, we aim to empower you with a greater understanding of how the network functions as well as how blockchain technology facilitates the operations on the backend. Adaptable to many industries outside of the cryptocurrency space, blockchain technology is at the forefront of the tech revolution. Understanding how Bitcoin mining works is the first step to understanding the technology too. 

What does Bitcoin mining entail?

Forget about shovels and dark tunnels, Bitcoin mining is the decentralized manner in which transactions are verified and new coins are minted. Mining also plays a vital role in the maintenance and operation of the network, ensuring both the security and integrity of the platform at all times. The actual process of Bitcoin mining involves miners using sophisticated computers to solve complex cryptography problems.

The Bitcoin network is made up of a number of nodes (computers) and miners around the world that communicate with each other and constantly share the updated record of the blockchain. The blockchain stores all transactions in a transparent and immutable manner, allowing anyone to view it from wherever they are, however, no one can make any changes.

How does Bitcoin mining work?

Let’s say someone in Japan wants to send money to someone in America through the Bitcoin network. The user in Japan would initiate a transaction from their chosen wallet, pay a network fee, and execute the transaction. This transaction would then enter a mempool, a pool of transactions that are waiting to be confirmed. Typically mempools work on a “first come first serve” basis, however, users can opt to pay a higher network fee should they want to push their transaction further forward in the que. 

Miners will then pick up a number of transactions in the mempool and attempt to solve the complex cryptographic puzzle that will lead them to mining the block. The first miner to solve the puzzle is rewarded with the task of verifying the transactions and adding them to a block, in turn receiving the network fees as well as the block reward. Each block on the Bitcoin network can hold 1MB of transactional data. 

While many miners will attempt to solve the math problem using their own resources, only one miner will be successful. This has sparked a conversation, largely fueled by Elon Musk’s recent tweet, over the electricity consumption it takes to mine Bitcoin. Tesla, the company that Musk heads, recently withdrew Bitcoin from their payment options due to the un-eco friendly manner in which the network operates, as it goes against their company ethos. 

Once the miner has verified the transactions, ensuring that the wallet addresses exist and that there are available coins in the senders’ account, all the transactions are added to a block. This block is then added to the blockchain after the most recently added block, each block indicating the hash code of that block and the block before. This ensures that no one can tamper with the order or edit the content of any blocks. 

The user in America will then receive a notification confirming that their wallet has received the BTC, however it will need to go through three confirmations (sometimes more) before being accessible. Each confirmation is represented by a new block added to the blockchain following the block with your transaction. 

What is a block reward?

The block reward is a monetary reward given in Bitcoin to the miners for adding a new block to the blockchain. It is also the process used to mint new coins and in the process enter them into circulation. Alongside the block rewards, the miner responsible for adding the new block to the blockchain will also receive the network fees of each transaction verified within that block. 

This makes Bitcoin mining a lucrative endeavour, however, the start up costs are significant and your success rate will depend on the equipment, power, and cost of electricity in your area.

What is the halving mechanism?

As Bitcoin will only ever have 21 million coins released, Satoshi Nakamoto created a mechanism that ensures the slow release of coins over time. This is called the halving mechanism, and it automatically executes every 210,000 blocks. During the halving the block reward is halved, ensuring that the cryptocurrency remains deflationary in nature.

This means that for every 210,000 blocks added to the blockchain, the block reward given to the miners will halve. To date there have been three halvings in Bitcoin’s history, with the last one taking effect in May 2020. The block reward is currently 6.25 BTC for every block added to the blockchain.

Want to enjoy the benefits of Bitcoin without mining?

There’s another way to get in on the Bitcoin action without the use of sophisticated hardware and high electricity consumption. Users can tap into the Bitcoin network by buying BTC directly from their phones through the Tap Global app. The process is simple, takes minutes, and allows you to own your very own BTC. Through the Tap app users can also trade, store and spend their cryptocurrency, with advanced technology facilitating the process on the backend to ensure smooth and secure trading.

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Cryptocurrencies have been revolutionary in their pursuit of merging decentralization with the finance sector. The industry has grown to provide many alternative options to the traditional financial products available, with most of them at a fraction of the cost. Cryptocurrencies have digitized the way we view, use and manage our funds, and it's only the beginning of the digital assets revolution.

What is cryptocurrency?

Cryptocurrency is the blanket term used to describe any digital asset that utilizes blockchain technology or distributed ledger technology to operate. The first cryptocurrency that came into existence was the Bitcoin network, created in 2009 by the mysterious Satoshi Nakamoto.

The cryptocurrency was designed to provide an alternative monetary system to the traditional banking sector, free from politics. Instead of a central authority, Bitcoin operates using a decentralized network of computers that work together to transact and verify any financial transactions using the Bitcoin protocol. For the first time ever people could manage their money without having to rely on a centralized institution.

Since Bitcoin's success, many other cryptocurrencies have emerged, some providing a revised solution to the digital cash system Bitcoin created, while others have brought innovation to the crypto space.

The Ethereum blockchain, as an example, provides the industry with a platform on which developers can create decentralized apps (dapps) merging the app concept with the decentralized nature of blockchain technology.

Cryptocurrency vs traditional currencies

Traditional currencies, also known as fiat currencies, are operated by government institutions while cryptocurrencies are maintained through a network of computers following a specific protocol. While a Federal Reserve typically sits behind a fiat currency, the key players in a cryptocurrency's existence typically involve:

• Core developers, responsible for updating a network's protocol
• Miners, responsible for validating and executing transactions
• Users, the people using the cryptocurrency
• Exchanges and trading platforms, facilitating the trade of these cryptocurrencies.

While governments have free control over printing new money, most cryptocurrencies are created with a hard cap. For instance, Bitcoin was designed with a maximum limit of 21 million coins, meaning that there will only ever be that number in existence. Not all cryptocurrencies have this hard cap though, Ethereum has an infinite supply due to the nature of the platform and the cryptocurrency.

Unlike fiat currencies, Bitcoin and many other cryptocurrencies were designed to be deflationary, with the necessary factors in place to ensure that the value of the currency increases over time (based on simple supply-demand economics).

Another pressing difference between cryptocurrencies and fiat currencies is that cryptocurrencies are still undergoing regulatory processes. While they are not illegal to trade (in most countries), they are not yet considered to be legal tenders (again, in most countries). Regulators around the world are working on a legal framework in which cryptocurrencies can operate in mainstream markets.

How do cryptocurrencies work?

Now that we've covered the basics on what is cryptocurrency, let's take a look at how these digital currencies actually function. First and foremost, through the use of blockchain technology. While not all cryptocurrencies use this technology, most do and we will use it as an example (as the concept is roughly the same).

Blockchain technology explained

Blockchain is best explained as a digital record-keeping system, or a distributed database. All transactions made on the network are stored in a transparent manner for anyone to see, with no way to edit or omit any of the information. All data is stored in blocks, which are added chronologically to a chain, hence the name.

A block will contain information relating to every cryptocurrency transaction, like timestamps of when it took place, the sending and receiving wallet addresses, transactional hash, and amounts. Depending on their size, blocks typically store data for a few hundred to a few thousand transactions. Blocks will then also hold a block hash, a unique identifying number associated with the block, and the hash of the previous block to prove its order.

When companies incorporate blockchain technology into their businesses they will typically use a private network where the information is only transparent to certain users. This is referred to as a "permissioned" blockchain, different from a "permissionless" blockchain used for Bitcoin and other cryptocurrencies.

Cryptocurrency transactions explained

While blockchain forms the backbone of a cryptocurrency network, miners facilitate the transactions. In a process called mining, cryptocurrency transactions are validated and executed, and through cryptocurrency mining new coins are minted. To make this easier to understand, we're going to use an example of Lucy sending Bitcoin to Jane.

From her Bitcoin wallet, Lucy will initiate a transaction to Jane, sending 1 BTC. After entering Jane's wallet address, she will confirm the network fees presented (these are paid directly to the miner for their time and effort), and execute the transaction.

The transaction will then enter a pool of transactions waiting to be executed called a mempool. Miners then compete to be the first to solve a computational puzzle, the winner of which will be rewarded with verifying and executing the next batch of transactions (cryptocurrency mining).

Confirming that each wallet address exists and each sender has the available funds, the miners will collect each of the network fees that the senders paid. The data from the confirmed transactions will then be added to a block and added to the blockchain right after the last published one. For adding a new block to the blockchain, the miner receives a block reward.

This block reward is based on the current rate, which is halved every 210,000 blocks (roughly every 4 years). This is how new Bitcoin enters circulation and the currency is able to maintain a deflationary status.

Jane will then receive a notification to say that she has received 1 BTC, and depending on her wallet will need to wait for 3 - 6 confirmations before being able to access the funds. Each confirmation is when a new block is added to the blockchain, which typically takes 10 minutes.

This process is typical of a proof of work network, used on networks like Bitcoin. This process is also the same whether you are buying crypto from crypto exchanges or sending to a friend.

The only time this differs is when using a cryptocurrency blockchain that utilizes a proof of stake consensus. In this case, instead of miners competing to solve the puzzle (requiring a lot of energy), validators will be selected by the network to conduct the verification process afterwhich this information will be verified and added to the relevant blockchain ledger.

The different types of cryptocurrencies

With tens of thousands of virtual currencies on the market, a number of subcategories have been created. While Bitcoin is a digital cash system providing a store of value and a medium of exchange, not all cryptocurrencies follow this structure.

Cryptocurrencies that are not Bitcoin are referred to as altcoins, (alternative coins), a term coined in the early days when new coins started emerging. Some altcoins are focused on providing heightened privacy, security, or speed while others are created for entertainment and leisure.

There are nine main types of cryptocurrencies, which we'll briefly highlight below:

• Utility, provide access to the platform service
• Payment, used to pay for goods and services within and outside of its network
• Exchange, native to cryptocurrency exchange platforms
• Security, where its usage and issuance are governed by financial regulations
• Stablecoins, digital currencies with prices pegged to fiat currencies
• DeFi tokens, digital currencies used on DeFi (decentralized finance) exchanges
• NFTs, non-fungible tokens representing unique identities that cannot be replicated
• Asset-backed tokens, where their underlying value is backed by a real-world asset

Another category that is gaining popularity around the world is Central Bank Digital Currencies, CBDCs. These digital currencies are operated and maintained by a central bank with the price pegged to the local currency.

What are the benefits of digital currency?

Cryptocurrencies are known for their fast and secure transactions, not limited by borders or government intervention. Below are several highlights that cryptocurrencies bring to the financial sector.

• Decentralized. Eliminating third parties and centralized authority, cryptocurrencies make the transfer of assets possible while reducing costs and time constraints.
• Security. Blockchain provides a transparent and immutable means of storing transactional data ensuring smooth and accountable operations.
• Deflationary. Most cryptocurrencies with a limited supply are designed to be deflationary in nature due to the decreasing supply mechanisms set in place. With basic supply-demand economics, a reduced supply and increased demand drive the price up.
• Reduced transaction fees. Cryptocurrencies provide a much cheaper alternative to sending fiat currencies across borders. With no need to exchange currencies and bypass several middlemen, cryptocurrencies are able to be sent on a peer-to-peer basis in a matter of minutes.
• Diversification. When it comes to investing, cryptocurrencies present a measure of diversification. Considering your risk tolerance and asset allocation, cryptocurrencies could be a part of your investment portfolio.

What are the risks associated with cryptocurrencies?

While there are plenty of benefits, as with any "new" asset class, there are risks to be considered too.

• Market volatility. Cryptocurrencies are prone to bouts of volatility with prices rising and falling dramatically in various frames of time.
• Market manipulation. Some cryptocurrencies might fall victim to a pump-and-dump scheme through no fault of the networks'. These are typically orchestrated by third parties.
• Theft. While blockchains can't typically be hacked, many cryptocurrency exchanges and wallets that don't utilize the necessary security measures can fall prey to hackers. To avoid this ensure that you always stick to a regulated platform with high-security measures.

How does one store cryptocurrency?

Cryptocurrency is stored in a digital wallet, similar to how one would store money at financial institutions only with cryptocurrency you are entirely in control of your funds. From the wallet you can make crypto transactions, store a wide range of cryptocurrency assets and hold your cryptocurrency investments long term.

Each cryptocurrency wallet is specifically designed to hold a certain type of cryptocurrency. For example, you cannot accept Bitcoin in an Ethereum wallet or send Bitcoin Cash to a Bitcoin wallet. Each wallet also comes with a set of public and private keys, the latter of which gives the holder access to the funds.

How to trade cryptocurrencies on cryptocurrency exchanges

Now that you understand what is cryptocurrency, let's cover how to enter the world of crypto assets. Entering the world of cryptocurrencies can be both exciting and rewarding. While we encourage every single person to conduct their own research prior to getting involved, once you're ready to start your journey into the cryptocurrency space, we're here for you.

Crypto exchanges

In order to buy any digital currency, traders will need to utilize cryptocurrency exchanges. These exchanges facilitate the buying and selling of crypto assets, and depending on the structure, often require users to offer some proof of identification before conducting any cryptocurrency transactions.

Decentralized vs centralized

The cryptocurrency market is made up of decentralized exchanges and centralized exchanges. The difference between the two is how they are operated, with centralized exchanges have a central authority. Typically, the centralized ones are more reliable and trustworthy as they require licenses which hold them accountable to certain standards within the financial sector. When looking to trade any digital currency, find an exchange that is regulated and licensed by a financial body.

The Tap app is a mobile app that allows users to buy, sell, trade, store and even earn crypto through a secure wallet infrastructure. Supporting a number of popular cryptocurrencies, users gain access to a wide range of markets. Fully regulated by the Gibraltar Financial Services Commission, the app uses top-of-the-range security technology to ensure that all data and funds are secured at all times.

Open an account

To engage in the cryptocurrency market all one needs to do is create an account. To open an account on Tap simply download the app from the App or Google Play store, enter the details required and complete the KYC process, an international requirement on all reputable digital currency platforms. Users will then gain access to a number of crypto and fiat wallets, with the ability to accumulate a wide range of cryptocurrencies.

From there, users can make cryptocurrency transactions, whether to friends also using the platform, external wallets or even external bank accounts for online payments, such as municipalities. The app offers a modern approach to banking services where funds can be used for real world payments. 

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We know the cryptocurrency market has a reputation for being volatile, however, these last few months have been particularly nail-biting for many investors. As markets swing in wild directions, some have made impressive gains while others have lost out. In this article, we explore whether crypto markets will ever overcome volatility and what one can do to gain financial stability in turbulent times. 

What causes the markets to be so volatile?

Due to a lack of central authority, the markets more accurately present investor sentiment, rising and falling as a result of the actions of people actively buying and selling. While volatility has a bad name and is certainly a hinder in terms of mainstream payment method adoption, it is valued by traders as it poses an opportunity to make big gains. Traders have created full-time jobs that benefit solely from the crypto market's volatility.

Regulatory frameworks are likely to positively affect the volatility prevalent in the digital currencies markets, but until that is implemented let's explore the biggest factors behind the volatility.

Entirely digital

Due to cryptocurrencies being digital and not backed by any commodity or real-world currency, their prices remain dependent on supply and demand. Essentially relying on faith: the prices will rise based on people believing in the product and accumulating more, while prices will drop when investors lose faith and sell. The markets remain volatile as investors are not concrete in their positions.

In its infancy

Cryptocurrencies have been around for just over a decade, a relatively short time for an asset of such influence. As the technology remains in its earlier years there is still plenty of development that needs to take place. So while Bitcoin has built an incredible market capitalization, there is still a long way for the cryptocurrency to go. 

This contributes to the market's volatility as markets tend to rise when new developments (upgrades, discoveries, implementations) take effect, while markets can fall when deadlines are missed or errors occur, leading investors to lose faith in the technology. 

Outside speculation

Arguably the biggest contributor to the market's volatility is the speculation surrounding cryptocurrencies. Predicting price swings and then acting on them has caused many an upward and downward spiral. From buying in just before the price rises to short just before a crash, speculation plays a large role in the market's swings and increased volatility. Speculation management is a key ingredient when it comes to successfully trading crypto.

Increased media coverage

Another great contender to volatility in the market is the media. Having a great influence over investor sentiment, the media has been behind many price swings in the market. With the power to launch or crash a market, the media plays into the narrative by encouraging investors to quickly buy or sell with attention-grabbing headlines.

Easy accessibility

The final factor to consider in the causes behind the market's infamous volatility is its accessibility. Stock markets and real estate typically attract a certain calibre of investors, while the entry requirements for investing in crypto are very low. It does not require any licences, degrees, lawyers or heavy capital. Anyone can enter the market with a small amount of money and internet access.

The market has typically been dominated by retail investors, however, in recent years institutional investment has been on the rise. The simple way in which anyone can enter the market provides an open invitation for volatility. 

All playing their own role, these factors contribute to market prices being thrown in seemingly random directions at unpredictable time intervals. Understanding the fast nature of price swings and what might be behind them will contribute to investors and traders gaining a tighter grip on what might happen next. 

Can the market stabilize?

Now that we've explored what factors are behind the volatility, let's dive into whether the markets could stabilize. Bitcoin maximalists claim that once Bitcoin reaches a level of adoption, the price will stabilize. While there are no clear criteria for what "adoption" is, the theory remains true. 

According to this data, Bitcoin is currently the 14th biggest currency in the world, sitting comfortably between the Swiss Franc and the Thai Baht. This illustrates the cryptocurrency's affirmative dominance despite its volatility. 

Will it improve with time, or will a seismic shift in the way people perceive cryptocurrency ultimately solve the volatility issues. At this time, one can't say for sure. So in the meantime, continue HODLing if that's what you came here to do, or leverage the swings as you trade, in the end, you can make gains either way and still come out smiling. 

How to maintain financial stability in volatile markets

First and foremost, never invest more than you're willing to lose. This is the golden rule of investment across all asset classes. The next universal rule is to not act on emotions, do not make impulsive decisions when it comes to your trading portfolio, rather expect volatility and have a plan. Below we outline several tips on how to remain calm in stormy markets.

• Do not pay attention to short-term fluctuations and rather stay invested for the long term.
• Create a limit order that will automatically execute if markets crash. This will create a safety net should things turn south.
• Consider that typically when volatility subsides, prices increase.
• Remember why you invested in the asset and refer back to its potential.