We’re excited to share that XTP trading is officially back online in the Tap app!
Following the successful integration of ProBit, a trusted exchange that continues to support XTP, users can now trade seamlessly within the app once again. This marks an important step in restoring access and strengthening the trading experience for our community
We know that waiting isn’t always easy, and we want to sincerely thank you for your patience and continued support throughout this transition. Your trust drives everything we do.
As always, we’re working behind the scenes to bring you more ways to access and use XTP, stay tuned for what’s next.
The Tap team.
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In recent years, cryptocurrency, and therefore cryptocurrency exchanges, have firmly established themselves in the global financial market. As they become increasingly popular, many concerns have been raised over the regulation of these entities, and how they are preventing illicit monetary activity from taking place.
In an attempt to crack down on funds being illegally moved, exchanges are required to implement KYC (Know Your Customer) and AML (anti-money laundering) policies. Regulatory bodies are working to build legal frameworks for the industry, in an attempt to fight crime conducted using blockchain technology.
The biggest challenge for these regulatory bodies is to find a solution that doesn't hamper the innovative qualities of cryptocurrencies.
In the UK there is the Financial Conduct Authority, a financial regulatory body that operates outside of the UK government. In 2020, the FCA required every company participating in any crypto activity in the sector to comply with its Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 policy (the 'MLR's). This obligation requires crypto service providers to complete the necessary registration and infrastructural requirements.
What is AML in crypto?
AML stands for anti-money laundering and involves protocols that ensure that every transaction can be tied to an identity, thus providing greater transparency. This ensures that if any suspicious activity is flagged, the origins and/or destination of the funds can be confirmed on the platform.
Due to the anonymous, or more accurately pseudonymous, nature of cryptocurrencies, many believe that it provides an easy opportunity for ill actors to engage in money laundering. Money laundering is the act of changing large amounts of illicit income into a legitimate avenue, the money is "laundered" so as to appear clean.
While cryptocurrencies seemingly provide a perfect platform for money laundering due to the lack of central authority or third parties, AML processes are implemented on exchanges to stop this activity in its tracks.
What are the risks hindering AML practices?
The first risk that challenges AML practices is privacy coins, cryptocurrencies designed to conceal transactions and the relevant information attached to them. Platforms like Monero offer users the opportunity to send funds with no record of the transaction taking place.
The data associated with the transactions like the sender, receiver and amount sent are encrypted and often broken up when stored on the blockchain to ensure they are untraceable.
The second risk is coin join platforms that mix cryptocurrency transactions, hiding the origin and destination of the funds. These platforms essentially provide a service that can make ordinary cryptocurrencies anonymous.
While cryptocurrencies have their benefits, there are a number of challenges they pose to regulatory bodies, AML and CFT (Combating the Financing of Terrorism) intentions:
- The anonymity they can provide
- Opportunity for gaps when transacting cross-border transactions
- Absence of one central authority to ensure compliance
- The limited scope of identity verification processes
Differentiating between illicit activity and investors just wanting to safeguard their investments is a tricky business. Bad actors might make use of paper wallets to hide funds and keep them secret, while an investor might make use of a paper wallet in order to protect their funds against theft.
AML in crypto exchanges
Despite the challenges it faces, AML has proven to be valuable in cracking down on illegal activity conducted on crypto exchanges.
In July, $1.45 billion worth of illegal cross-border crypto transactions were traced back to 33 individuals on the South Korean exchange, Bithump. The platform quickly banned all foreign transactions, requiring a mobile KYC verification, and increased the KYC requirements so as to align with the country's AML regulations.
Bitcoin ATMs, a notorious option for mixing funds, have come together to form the Cryptocurrency Compliance Cooperative (CCC). This operation calls for cash-based cryptocurrency services, financial institutions, and regulators to participate in building universal compliance factors.
Does AML help or hinder the crypto market?
While AML tends to go against the decentralized nature of cryptocurrencies, the crypto community actively welcomes these regulatory efforts as it drives more trust and interest in the market on top of innovation and adoption. For example, an institution or retail investor is more likely to invest in a regulated asset than in a lawless, anything-goes market.
Shiba Inu (SHIB) and Dogecoin (DOGE) are both dog-themed meme tokens, and ironically both hold a place in the top 15 biggest cryptocurrencies by market cap. Typically meme tokens don't hold too much value when it comes to utility within the crypto space, however, financial experts have pointed out that as the investment thesis has changed surrounding meme tokens these two projects have experienced impressive growth and success. But who comes out on top in this crypto dogfight spurred by internet memes?
Exploring Dogecoin (DOGE)
Dogecoin calmly entered the crypto scene in 2013 as a joke, based on a Shiba Inu meme that was circulating at the time (a Japanese dog breed). Created by Billy Marcus and Jackson Palmer, the peer-to-peer cryptocurrency was allegedly created to poke fun at crypto investors who understood little about what they were investing in. The coin quickly grew a mass following but did little to prove its value in the space.
However, in 2021 Dogecoin's popularity exploded thanks to social media and the support of Tesla CEO, Elon Musk. After claiming it to be his favourite coin on Twitter, even naming himself the Dogefather, Musk caused a wild increase in the DOGE price, hype, and far-spread interest (as well as speculation).
Dogecoin provides a fast medium of exchange and is used predominately as money for tipping content creators across various platforms and crowdfunding. Ultimately, Dogecoin has a reputation for being an accessible asset in the market.
Exploring Shiba Inu (SHIB)
Bursting on the scene in 2020, Shiba Inu positioned itself as an Ethereum-based rival to the original meme token. The project provides several use cases such as a decentralized exchange, an art incubator and hosts to other tokens (one of which was initially called Doge Killer).
The platform was created by an anonymous entity, much like Bitcoin, that goes by the name of Ryoshi. After launching, Ryoshi donated 50% of the total SHIB supply to Vitalik Buterin, and whether this was meant to be a publicity stunt or not it certainly received a lot of attention. Buterin went on to donate 10% of his SHIB to a Covid relief fund in India and burned the remaining amount.
In October 2021 following a possible Robinhood listing the SHIB price soared and for the first time overtook Dogecoin in value. Once the selling spree calmed down the price corrected.
How is Shiba Inu connected to Dogecoin?
While we outline the specifics of their similarities in the article below, the answer to this question is that there is no link between the two. Each network is built on its own platform (Shiba Inu using Ethereum as a base) and are not intertwined nor compatible. They are essentially competitors in the crypto space, each providing a platform and use cases separate from one another.
Dogecoin vs Shiba Inu Similarities
While the obvious similarity in this article is that these coins are both meme-based, there are two other core similarities that these coins share that is seen less frequently in the crypto space.
Consensus Model
Both cryptocurrencies currently use a Proof-of-Work consensus algorithm, requiring miners to solve computational problems the fastest in order to validate transactions. Dogecoin is hard forked off the Litecoin network while Shiba Inu is built on top of Ethereum's blockchain. However, in the coming months, this will change as Ethereum moves toward a Proof-of-Stake consensus.
Strong Social Media Presence And Followings
Both these coins have active and loyal followings and have done well to build such strong communities. Both provide easy entry points into the market, an excellent way of diversifying one's portfolio with their low costs. Both coins also played a role in bringing crypto to the mainstream in a "fun" light, with their active community members to thank.
Elon Musk
As a bonus similarity, both these meme tokens have greatly benefited from the actions of Elon Musk. While he is a strong fan of Dogecoin, he recently sent the price of Shiba Inu soaring after posting a picture of his Shiba Inu puppy. In part, this contributed to the SHIB price reaching its all-time high.
Dogecoin vs Shiba Inu Differences
Of course, while they're both wildly popular and among the biggest cryptocurrencies based on market cap, they too have differences.
Token Type
While Dogecoin was built on its own blockchain, Shiba Inu was created on Ethereum as an ERC-20 token. This increases the tokens versability as it is compatible with all ERC-20 functions, such as wallets, smart contracts, decentralized exchanges, market places and more.
Tokenomics
An important aspect to look at, these two differ substantially. Dogecoin was created to have an infinite supply with a total of 5 billion new DOGE entering the market each year. Due to its fixed reward rate, the coin's inflation rates are expected to decrease over time making it deflationary in the long term.
Shiba Inu, however, has a fixed supply of 1 quadrillion SHIB with around 549 trillion SHIB currently in circulation. The project has also implemented a burning mechanism into its operations, burning small portions of SHIB each time the cryptocurrency is purchased (via the transaction fee). As more coins are purchased the burning mechanism will decrease the supply, making the coin scarcer and increasing value.
Utility
Dogecoin is a peer to peer payment system providing a medium of exchange. Shiba Inu on the other hand can be used in smart contracts and DeFi products. The project also provides a decentralized exchange called Shibaswap, as well as two other tokens, LEASH and BONE. On top of that, the platform also offers users access to liquidity pools and staking services.
The Dog Fight Continues
As mentioned above both these coins have impressive communities behind them and have their own use cases. With many people asking where do experts predict Shiba Inu will go next and how high can Dogecoin go, the truth is that no one can say for certain. Each investor can decide for themselves which is better suited to their trading needs and enter the market accordingly. If you'd like to onboard Dogecoin or Shiba Inu you can do so securely and conveniently through the Tap app today.
Scarcity is a simple economic term that refers to the gap between supply and demand, looking at the concept of "there's just not enough to go around". Typically, when a resource or asset becomes scarce this instigates an increase in price. Let's learn more about scarcity and how it differs from shortage, and how it pertains to the financial world.
What is scarcity?
According to economics, scarcity is the lack of plentiful resources in comparison to theoretically infinite wants. This term refers to this definition; any resource with a non-zero cost associated with consuming it means that it's scarce to some degree.
The concept of scarcity often drives people to make decisions about how they want their resources allocated so that everyone can satisfy not just their basic needs, but also additional wants whenever possible.
What are the three causes of scarcity?
Scarcity is a term that economists use to describe the limited availability of a good or resource, turning some things that might have once been abundant into scarce resources. The root causes can be broken down into three categories:
- Demand-induced scarcity: when consumer demand outweighs supply, e.g. face masks in the wake of the global pandemic.
- Supply-induced scarcity: This happens when outside forces make a resource less attainable, decreasing supply with little impact on demand. E.g. commonly with a natural resource, such as water in a drought.
- Structural scarcity: When some have greater access to a resource than others. Structural scarcity often happens because of political or economic reasons.
Scarcity in the sense of natural resources
We usually think of scarce resources as natural resources that exist on Earth without humankind's intervention, such as gas, coal, or water. These commodities often have a limited supply. While some can be produced (like food), others will be gone forever once used up (such as oil).
The scarcity of natural resources also generally increases with growing populations. This brings in relative scarcity, which refers to the scarcity of a resource in one region while it may be more abundant in another. This concept applies not only to commodities but also to services that rely on these resources.
Scarcity in terms of the economy
Economic scarcity occurs when the quantity individuals want to purchase exceeds the amount available for trade, driving up its monetary value. For instance, Bitcoin, with its limited supply of 21 million coins, illustrates this concept. As the coins become scarcer, their value grows higher, making it a potentially valuable choice for traders.
Scarcity vs shortage
While scarcity and shortage might sound like interchangeable terms, there are several key differences between these terms and very different causes.
Scarcity looks at the limited availability of something that cannot be replenished, natural resources for example. On the other hand, a shortage refers to a market phenomenon where the demand for something is greater than the quantity supplied at the market price.
When the market is balanced, there is an equal amount of supply and demand for a product. If these become unbalanced, we can have a shortage. Several things can create this scenario.
Firstly, it could be a result of increased demand. This is rarely permanent and can easily be reproduced. Secondly, it could be a result of a decreased supply. If the costs of a product increase causing the manufacturers to create less, and the demand stays the same, this will result in a shortage. In both instances, changes to the market can fix this.
The main difference between scarcity and shortages is that shortages can usually be solved by altering supply and demand. With scarcity, however, there is a limit on the amount of a resource available with little that can be done to fix this problem.
How does relative scarcity work?
Relative scarcity is when the distribution of resources can cause a resource to be less scarce for some but not for others.
For example, in water-rich areas, people seemingly never have to worry about running out of water as the supply is limitless while in other areas people have no access to clean running water. In water-scarce areas, the costs increase, and authorities and citizens have to decide how to efficiently allocate resources.
This relative scarcity concept can make a natural resource abundant in one area and a scarce resource in another. This is most often the case with raw materials (such as a diamond) and free natural resources (such as water).
The same can be said about land prices when you compare the prices of properties in the countryside versus in the built-up city. Authorities cannot simply produce more land, so the prices increase alongside demand.
The financial industry has seen significant growth within its digital sector due to the adaptation required during Covid-19. With the increased interest in digital payments has come the rise of virtual cards.
Shopping online and online purchases continue to break barriers that traditional financial institutions never predicted. While these institutions do allow users to do online shopping, there are still a lot of limitations and risks to be wary of.
Every time you shop online, you risk your account number and details being stolen and used against you. Credit card companies have had to evolve, and one way they have done that is through the introduction of an actual account-linked virtual card.
How do virtual credit cards and debit cards work?
Virtual cards are stored on your mobile device and can be used to make contactless payments in store or online. A virtual card has its own unique card number, CVC, and expiration date. These virtual cards are simply a copy of your physical card, linked to your bank account, and stored on your application or phone. Think of it as an online account and card.
Virtual cards are very similar to an actual credit or debit card, with the main difference being that they only exist digitally, and can not be used to withdraw physical cash. Virtual credit cards provide the same features and mechanics as traditional credit and debit cards.
A virtual credit card still has an expiry date and 16-digit account number, and CVV codes. They are connected to payment networks like Visa and Mastercard and are generally accepted by merchants who use physical card machines, similar to Apple and Google Pay.
Your virtual card information and virtual credit card number are stored digitally, eliminating the risk of someone stealing your card and simply entering your details when shopping online.
Virtual credit cards act as digital wallets, providing more advanced security and ease of online access. Virtual cards are created for one-time use or act as a temporary account number, but what are the benefits of a limited-use virtual card number? Let’s get into it.
Benefits of a virtual credit card
The first and foremost virtual credit card feature benefit that you can expect is an enhanced layer of security. To combat fraudulent activity, a data breach, and account information being stolen, virtual cards have randomly generated and disposable card numbers. This makes virtual cards one of the safest payment methods, eliminating physical and confirmed details, meaning your temporary information can not be stolen or lost. If your info is compromised, you can cancel it without having to create a new bank account or waiting for a new card in the mail.
Control and customization is an additional layer of benefits users can expect from using virtual credit cards. Users can customize how many virtual account numbers they want, set spending limits, choose their preferred currencies, and more. Similar to a normal debit card account, you can also create recurring payments with merchant details, as tailored to the amount, time, and so on.
Some virtual credit cards provide users with point-earning rewards or store credit when used. Credit card companies can also easily access your information to improve your credit score based on your recurring payments set up.
Creating multiple virtual debit cards allows you to distribute, allocate, and track funds with ease. This means at the end of the day, you have more visibility of your funds going in and out and can create a dedicated virtual debit card for a specific area of your financial responsibilities.
Getting your virtual card number
Whether you are trying to manage your funds with your debit or credit cards accounts, a virtual card can make matters easier. All you need is a debit or credit card account, such as the one offered by Tap and you can create your unique virtual card at the click of a button. With some traditional banks you can even create multiple cards if you want, each with its own unique account number and expiration date.
These digital wallets and accounts provide ease when you want to shop online, avoid physical wallet and card theft, as well as easier fund management. A virtual debit card is a big part of the future, as we move into the digital era.
Experience a whole new world of digital payments and money management from the safety of your mobile device. You should be able to use your virtual card at any merchant that accepts debit and credit card payments, or contactless transactions, such as Apple Pay or Google Pay. Create your virtual account number today and enjoy purchases online and in-store. The future of payments is here.
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We've all been caught off guard with an emergency payment - from having to replace an appliance to an unexpected medical bill. These things happen and they're out of our control, so it's best to be prepared. Emergency funds are the best way to protect yourself, and a great way to start building your savings.
These unforeseen expenses shouldn't cripple your savings. With an emergency savings fund, you can recover more quickly and get back on track to achieving your financial goals with little to no stress.
What is an emergency fund?
An emergency fund is easily accessible money stored in a bank account set aside specifically for unexpected expenses or financial emergencies, anything from medical expenses to a loss of income. Emergency savings are typically used for unplanned expenses that fall outside of your normal monthly spending, with the funds stored in a savings account.
These funds allow you to weather the storm and avoid the need (and costs) of taking out a high-interest loan or credit card debt. Keeping the funds in a savings account removes the temptation to spend it, as would be the case if you stored the funds in a checking account.
Why emergency savings are important
Emergency or unexpected expenses without the proper precautions can quickly turn into debt or take a toll on your savings goals. And if hit with two or more in a row, this might cause long-term consequences that cause havoc on your finances.
Rather rest assured knowing that you have an emergency fund in place should something unexpected happen than fall back on costly loans and credit cards, or even other savings accounts like your retirement savings.
Emergency funds play an essential role in any reliable financial plan, providing peace of mind and a buffer for your other savings accounts. These funds can be used during periods of unemployment, the sudden death of a family member, illness and disability, or emergency home and auto repairs. Never underestimate the importance of an emergency fund and its impact on your financial well-being should something go wrong.
Start your emergency fund with these 7 simple steps
1. Review your monthly budget and see where you can save
It's critical to understand where your money is going so you can find ways to save it. Budgeting allows you to maximize your income and discover methods to decrease or control your spending.
To do this you can sit down with a financial advisor, or take matters into your own hand with your checking account statements, a pen and paper or a budgeting app. Be sure to review both your checking and savings accounts to get a clear picture. This is the first step in improving your financial health, and to start building your emergency fund.
2. Establish a goal amount for your emergency fund
A budget is a plan for spending that helps you figure out how much money you'll need each month to meet your essential expenses. A general rule of thumb when looking to build an emergency fund goal is to aim for six months' worth of income, enough to cover monthly expenses for housing, food, and transportation.
Don't be discouraged by how long this will take, rather establish a goal to work towards and move forward in that direction. Ideally, you want to be able to cover your living expenses for six months.
3. Create a direct deposit to your savings account
Avoid temptation by setting up a direct deposit from your current bank account (or wherever you receive your income) to your savings account. Better yet, you can create a split direct debit which allows you to automatically allocate funds to various accounts, including retirement funds etc.
If you're new to saving, experts recommend starting with an emergency fund, and once you've established this, move on to other savings accounts. If you already have a retirement fund or money market account set up, continue with this while building your emergency fund.
4. Little by little increase your savings
Increase the amount you're putting into your emergency fund by 1 percent or a certain amount over time until you've reached your savings goal. Increasing amounts gradually might help to make the smaller deposit into your checking account seem less noticeable and steadily build financial security.
5. Direct any unexpected income straight to your savings accounts
Commit to redirecting any unexpected income to your emergency fund, at least until you have reached your saving goal. This might be money from a bonus, inheritance, a tax refund, lottery winnings etc.
6. And once you've reached your goal? Save some more
Being unemployed for more than a year or being hospitalized for several months are both situations that require more than a six-month cushion. Should you find yourself here you’ll be glad you have more money saved in your emergency fund.
7. Find a bank account with perks that can kickstart your savings
When opening new checking or savings accounts, shop around by observing bank or credit union offers. Some banks offer cash incentives to new customers. Use this to kickstart your emergency fund, or to add a little extra to an already established one.
In conclusion
An emergency fund provides a cushion for unplanned events and can help you avoid taking on credit card debt or taking out a personal loan. By putting your emergency money in a high-yield savings account as opposed to checking and savings accounts, you can earn interest while you save money and build your nest egg.
Having an emergency fund saved in a separate account prevents you from spending the money and ensures that it is accessible in the case of an emergency. Emergencies can occur whether or not you are prepared; as a result, being prepared is the best way to deal with a potentially difficult scenario.
Building wealth doesn't have to wait until you're settled down and "old". In fact, the sooner you start the better. Whether you want to buy a house one day, or start saving for retirement, starting to generate wealth earlier on will help you achieve these goals sooner.
Your 20’s & 30’s pose an excellent opportunity to build wealth as these years allow you to learn from your mistakes and take risks with a minimal downside (far fewer than if you started this process when you've got a family to support or an upcoming retirement).
There are two important notions to remember: this is not a get-rich-quick scheme, nor does it need to be complicated. Building wealth is more about setting yourself up on the fast but responsible track to wealth in later years.
8 Tips on how to build wealth
Below are 8 tips on how to stay on the straight and narrow when it comes to generating wealth.
- Create a living expenses budget and stick to it
It might not sound glamorous, but budgeting and saving money is not as bad as you think. Creating a budget for your living expenses (and sticking to it) is one of the surest ways to grow your money in the long term. Explore options like the 50/30/20 rule or 70/20/20 rule to establish what to spend on needs, wants, and savings each month and provide frameworks that allow you to save more money.
Living on a budget doesn't mean skimping on luxuries, it simply means managing spending money on luxuries and not overspending. It also trains us not to live paycheck to paycheck and instead determine exactly what we are spending our money on and ultimately save more money for the things we want to do in life (like buy a house or build a healthy retirement fund).
Financial independence takes work but is not entirely out of reach for anyone. One needs to start building a financial plan today in order to accumulate wealth further down the line.
2. Start eradicating your debt (from credit card debt to student loan debt)
Prioritise paying off your debt and living within your means in order to build your personal capital. Of course, sometimes debt is unavoidable, but bouncing back is imperative to building wealth down the line. Consider saving up to pay off your debt before using those savings for investments.
The 20/10 rule stipulates that you use a maximum of 20% of your annual net income on consumer debt, while each month you use no more than 10% of your net monthly income to pay off this debt. Ideally, stay away from consumer debt entirely and prioritize paying off anything you owe so that you can have more money in the long run.
3. Explore the working world
Your 20s are a great time to try new things in the job world. Explore new opportunities and build your experiences to grow your earning potential down the line. Consider each new job experience an opportunity to grow your skill set and increase your earning potential as you ascend the corporate jungle gym.
While a job might not pay more money, the experience it gives you can leverage your next job and result in greater financial success. It also might help you find money-minded friends, a great benefit to have when building wealth and personal capital.
4. Increase your income streams and make more money
While you're gaining experience in the working world consider building multiple income streams through side hustles, your own business or freelance gigs. Not only will this too contribute to a wider skill set, but will also create additional income streams which can be used for investments or holidays. You can build wealth while enjoying life, and additional income streams are the surefire way to do this and achieve financial freedom.
5. Educate yourself on finances
You're more likely to grow financially if you understand finances. Never underestimate the power of being financially literate and having the right money mindset. Use your twenties to read books, articles, and blogs to gain both knowledge and street-smartness to help you navigate your journey to financial freedom.
6. Investing
First, and as a continuation of the point above, do your own research before investing in any asset class. Investing from an early age can have ample benefits (read up on compound interest for one), but doing so without understanding how investments work can have dire consequences. Educate yourself or consult a professional, and start small. You don't need a huge amount of capital to get started.
7. Build an emergency fund
An emergency fund is 3-6 months' worth of living expenses and is a major contributor to financial wellness and laying the right financial foundation for later in life. Emergencies in life are inevitable, whether it be a medical emergency, a family crisis, or a car or house emergency, and an emergency fund is a surefire way of avoiding financial ruin as a result.
Learn more about building an emergency fund in our 7 simple steps to start (and build) your emergency fund article.
8. Get started with your retirement fund
It might not sound sexy, but starting to save for your retirement in your 20s is ideal. Starting to save for retirement when it's right around the corner isn't advised, so why not start now so that it can grow into something substantial by that time? Imagine what two to three decades of retirement savings might look like, compared to a few years.
As always, do your research and start small. You might even find that you can retire much earlier than expected. This is the number one mistake that young people make today.
In Conclusion
There's no time like the present to start considering your financial situation and what you can do now to make it prosper in the years to come. Avoid get-rich-quick schemes and use the time to take educated risks, the earlier you start working on your growing wealth journey, the better.
Even if you're not earning a lot, be diligent and consistent and you will see results. Start building these habits now and you will reap the rewards along the way.
Disclaimer: This article is intended for communication purposes only, you should not consider any such information, opinions, or other material as financial advice.