Learning the friendly way

Cryptocurrencies changed the financial world, but stablecoins took things a step further. By offering a stable value tied to fiat currencies, they added a new dimension to the digital asset ecosystem. What started as experimental projects has now grown into a vital part of the financial system, handling hundreds of billions of dollars in less than a decade.

Illustrating this point, the two biggest stablecoins hold market caps of $124 billion and $42 billion each. Let’s explore how they got there. 

The first wave (2014)

The stablecoin story began in July 2014 with BitUSD, launched on the BitShares blockchain by future industry leaders Dan Larimer and Charles Hoskinson. As the first crypto-collateralised stablecoin, BitUSD attempted to maintain dollar parity through cryptocurrency backing. 

However, its reliance on BitShares as collateral proved problematic, as the volatile nature of its backing asset eventually led to its unpegging from the dollar in 2018.

That same year saw the launch of NuBits, which attempted to improve BitUSD's model by using Bitcoin as collateral. Despite using the more established Bitcoin network, NuBits faced similar challenges. The volatility of its Bitcoin reserves, combined with insufficient capitalisation and lack of diversification, ultimately led to its failure, with the token now trading at a fraction of its intended value.

While these coins are not around today, they built the foundations for the stablecoins that followed.

The rise of fiat-backed solutions

Tether (USDT), launched a few months later in 2014, took a fundamentally different approach that would prove transformative for the industry. Instead of using cryptocurrency as collateral, Tether introduced a simple but effective model: backing each digital token with an equivalent amount of real US dollars held in reserve. 

This straightforward approach has led to remarkable success, with Tether's market capitalisation growing to over $124 billion and becoming the dominant stablecoin in crypto markets.

Innovation in collateralisation

In 2017, MakerDAO introduced Dai, bringing sophisticated innovation to the crypto-collateralised model. As a decentralised stablecoin on the Ethereum blockchain, soft-pegged to the US dollar, it represents a key evolution in stablecoin design, moving from fiat-backed models to multi-asset collateralisation. 

Dai’s stability is maintained through a hybrid algorithm and a dynamic supply control mechanism called Collateralized Debt Positions (CDPs). This multi-collateral approach, combined with diversified reserves including USD Coin (42%), Wrapped Bitcoin, and fiat-backed assets, ensures Dai’s reliability, making it one of the most stable stablecoins, managing to maintain its dollar peg even during significant market volatility.

Experimenting with algorithms

The most recent chapter in stablecoin evolution came with TerraUSD (UST) and its dramatic collapse in May 2022. Despite backing from substantial Bitcoin reserves (over 70,000 BTC) and sophisticated price stabilisation algorithms, UST demonstrated the limitations of algorithmic stability mechanisms. Its failure reinforced the fundamental principle that stable assets require stable backing.

Key lessons and industry impact

The development of stablecoins has yielded several crucial insights for digital currency innovation:

1. The importance of stable collateral for maintaining price stability
2. The value of diversification in reserve assets
3. The superiority of simple, transparent backing mechanisms over complex algorithmic solutions
4. The critical role of sufficient capitalisation in maintaining stability

Today, stablecoins process billions in daily transactions and serve as crucial infrastructure for cryptocurrency markets. And this success has attracted attention from traditional financial institutions and regulators, potentially influencing the development of Central Bank Digital Currencies (CBDCs).

The rapid evolution of stablecoins from experimental projects to essential financial tools demonstrates the potential for innovation in digital finance. As the technology matures, stablecoins are increasingly positioned to play a central role in the future of global financial services, bridging traditional finance with the emerging digital economy.

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So, you had a holly, jolly time over the holidays and maybe, just maybe, you went a tad overboard with the spending. Hey, it happens to the best of us and you are definitely not the only one heading into January in a deficit as a result. Without being too hard on yourself, let’s redirect and implement these 5 tips for steering back on course and bouncing back quickly. 

Before we begin, it’s best to have a realistic idea of where you are financially. You won’t be able to fix the situation if you’re not aware of the severity. You're going to have to pull up all your credit cards and accounts in order for us to face the music together. 

Assess the damage

If you dipped into your savings or credit cards to add the razzle to your December plans, clearly write out how much you owe and make a note of the relevant interest repayments. There are many ways to tackle debt so it’s important to find a strategy that works best for your financial situation. If you are unsure where to start, here are two beginner-friendly options: the Debt Avalanche method, and the Debt Snowball method. 

Debt avalanche: Start by paying off high-interest debt first to save on interest in the long run while still making minimum payments to the smaller-interest debts.

Debt snowball: Begin by paying off the smallest balance of debt for quick wins and motivation, while making minimum payments on all the other debts.

Go with what feels most comfortable to you. If you used your savings, try to increase your monthly savings over the next few months to get them back to where they were. Especially if you dipped into your emergency fund. No, sangria is not an emergency. Even in the European winter.

Streamline your savings

As you head into the next month, set up a direct deposit so that your savings go straight out of your account and you’re not tempted to soothe your feelings with another gingerbread latte. Listen, gingerbread lattes are great, but so is being financially stable.

If you have several savings goals, you could also look at setting up a few savings accounts (be sure to check the monthly costs) and allocating your paycheck accordingly. Bonus points for using a high-yield savings account which will accumulate added interest. 

Detox for the finances

Sometimes, when we've spent a little too much, it can be a good idea to give our finances a fresh start. One way to do this is by having a "no-spend month." Doesn’t sound riveting but hear us out.

You take a break from buying things that aren't absolutely necessary. It works best if you set strict rules, like focusing on essentials only. Define your rules by identifying the necessities, plan your meals in advance, avoid temptations like shopping malls and social media influences, seek out free entertainment, and marvel in tracking savings. 

A no-spend month can also help reset your thinking about what you truly need to spend money on. For example, for the holiday season, you might have absolutely needed a new outfit or two for your social engagements. However, in January, you take the time to go through your wardrobe and find fantastic pieces you had all along. 

Think of it as a way to take a step back and reevaluate your spending habits while also saving some cash. 

Allocate every penny in your budget

A recent trend in the budgeting space is to allocate every penny of your paycheck into various categories, ensuring that every penny you earn serves a specific purpose.

Once your budget is created, you still have the flexibility to move funds around, however, the idea is that you’ll think twice about moving funds from something important to something more trivial. It will also help you to realise your priorities and recover the damages. 

Review and adjust

While you’re sipping on something at home in your no-spend month, now is as good a time as any to put together a hypothetical budget for next year’s holidays. While it’s all still fresh in your head, jot down the biggest costs and try to put together a budget you can work toward saving for over the coming months. 

Things to plan for might include travel, the costs of hosting a party, gifts, extra gas bills for the heating, and perhaps an outfit that will make you feel extra good. Remember, budgeting isn’t about living skin and bone, it’s about prioritising, planning, and thinking ahead. 

Final thoughts

The holiday season's spending spree may have left you feeling a bit financially drained, but don't worry, you're not alone in heading into January with some financial adjustments to make. By following these five tips, you can bounce back quickly and even get prepared for next year's festivities. With a bit of discipline and a fresh perspective, you'll be well on your way to bouncing back and regaining financial stability in no time. Cheers to a financially strong new year!

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We’ve all been here: you land that dream job or get a nice raise, and suddenly your old budget feels unnecessarily restrictive. A few premium subscriptions here, some fancy dinners there, maybe a nicer apartment – before you know it, your higher income somehow feels tighter than before. 

Welcome to lifestyle creep, the subtle way our spending habits expand to match (or exceed) our growing income. It’s real, and it’s out there. Here’s how you can fight back. 

Why it happens

Lifestyle creep isn't just about splurging. Often, it's a series of small, seemingly reasonable upgrades. That $15 lunch delivery doesn't feel extravagant when you're having a hard day, and those $20 fitness classes are justified as a worthwhile investment in your health. 

The problem isn't any single expense, it's how these small changes compound over time, transforming from luxuries into what feel like necessities. And those small expenses can add up dramatically: an extra $50 per week on conveniences means $2,600 per year that could have gone toward retirement, a dream vacation, or your emergency fund. That’s a chunk of change in the end. 

Breaking the cycle

1. Find your motivation

Before making changes, identify why you want to control your spending. Maybe you want to switch careers, start a business, or build an emergency fund. Having a concrete “why” makes it easier to resist those immediate gratifications.

2. Audit your joy

Review your recent expenses and honestly assess which ones truly enhance your life. That streaming service you barely use? The subscription box that sits unopened? These are easy cuts. But don't stop at the obvious – examine everything, including your "necessary" expenses. Sometimes what we think we need is just habit in disguise.

Start doing this weekly, eventually moving up to monthly, until your inner accountant is completely satisfied with where your money is going. The idea here isn’t to strip all joy from your life, it’s merely to streamline it. 

3. Create friction

Make impulse spending harder:

• Remove saved payment information from shopping sites and phone settings
• Unsubscribe from marketing emails
• Establish a 48-hour waiting period for non-essential purchases

4. Address your triggers

Our spending habits are heavily influenced by our environment. Consider:

• Unfollowing social media accounts that trigger spending urges
• Finding free or low-cost alternatives to expensive social activities
• Being honest with friends about your financial situation and goals
• Planning social activities that don't revolve around spending

5. Regular check-ins

Schedule monthly "money dates" with yourself. Review your spending, celebrate wins, and adjust your strategy. Make it enjoyable – pour yourself a drink and put on your favourite record. This isn't about punishment, it's about alignment with your goals.

The mindset shift

Remember that reducing expenses isn't about deprivation, it's about choice and control. You might find that some lifestyle upgrades are worth keeping because they genuinely improve your quality of life. Others might be easy to let go once you realise they're not adding that much value.

The goal isn't to return to living like a college student. Instead, aim to be intentional about which upgrades you keep and which you can live without. This mindful approach to spending helps steer your money toward things that truly matter to you, rather than disappearing into a series of forgettable purchases.

By taking control of lifestyle creep, you're not just saving money – you're buying yourself options, flexibility, and peace of mind. And those are luxuries worth keeping.

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When you're in your 30s, we get that life gets busy with new responsibilities - like buying a home, growing your family, or advancing your career. It’s easy to overlook retirement planning and “fall behind”, but (drumroll please) now is actually the perfect time to start saving, if you haven’t already. The earlier you begin, the more time you give your money to grow and work for you through the power of *compound interest*.

We’ve packed this guide with simple, actionable steps to help you secure your financial future.

Why saving for retirement in your 30s is critical

Don’t worry about being late to the party, starting to save for retirement in your 30s can still give you a huge advantage. The earlier you begin, the longer your money has to grow. Thanks to compound interest, even small contributions can accumulate into significant savings over time.

Delaying your savings could mean playing catch-up later in life, requiring you to save much more per month to reach your retirement goals.

Step 1: Set clear retirement goals

The first step is figuring out how much you’ll need for retirement. This depends on the lifestyle you want to live.

Many experts suggest saving 10 times your pre-retirement salary with the plan to live on 80% of your income. For example, if you earn $100,000 a year before retirement, aim for at least $80,000 annually afterward. Adjust this based on other income sources like Social Security, pensions, or part-time work, as well as your health and lifestyle goals.

To make this more manageable, use a retirement calculator to estimate how much you’ll need based on your income and retirement age. Setting clear goals helps you understand how much you need to save monthly or annually to stay on track.

Step 2: Maximize employer-sponsored retirement plans (401k)

If your employer offers a 401(k) or similar retirement plan, take full advantage. Start by contributing enough to get any matching contributions from your employer -  this is essentially free money for your retirement.

If you’re currently contributing 3% of your salary, consider increasing it by 1% every few months until you reach 10% to 15% of your income. Gradually increasing your contributions makes it easier to adjust without feeling a big hit to your budget.

Step 3: Open an Individual Retirement Account (IRA)

If you don’t have access to an employer-sponsored plan, or if you want to save more, consider opening an IRA. A Roth IRA is a great option because your money grows tax-free, and you won’t have to pay taxes when you withdraw it in retirement.

If you earn too much to qualify for a Roth IRA, a Traditional IRA is a good alternative. You get tax benefits upfront, but you’ll pay taxes when you withdraw the money. Either option is a smart way to diversify your retirement savings and get started today.

Step 4: Invest aggressively in your 30s

In your 30s, you still have several decades before retirement, which means you can afford to take on more investment risk for potentially higher returns. Financial experts recommend that you invest 80-90% of your retirement portfolio in stocks, which historically offer higher growth than bonds or savings accounts.

Don’t worry about short-term market fluctuations. Focus on the long-term growth potential of your investments. Staying invested during market ups and downs gives your portfolio the chance to grow over time.

Step 5: Automate your savings to stay consistent

One of the easiest ways to ensure you’re consistently saving is to automate the process. Set up automatic transfers from your paycheck to your retirement accounts, even using one of your Tap accounts for a dedicated saving space. When saving becomes automatic, you won’t even have to think about it.

This method also helps you avoid the temptation to skip saving during months when other expenses pop up. It’s a “set it and forget it” approach to growing your retirement savings.

Step 6: Keep an eye on your retirement accounts

While automation is key, you still need to check on your retirement accounts regularly. Make sure your investments are balanced and that you’re not putting too much into any one stock, especially company stock. Financial advisors generally recommend keeping no more than 10% of your retirement savings in company stock to avoid unnecessary risk.

Revisit your portfolio once or twice a year to make adjustments as needed. As you get older, you might want to gradually shift towards safer investments like bonds.

Conclusion

Starting to save for retirement in your 30s doesn’t have to be overwhelming. By setting clear goals, taking advantage of employer-sponsored plans, opening an IRA, investing wisely, and automating your savings, you can build a solid financial foundation for your future. That might sound like a mouthful, but breaking it into sizable chunks is NB.

Remember, the key is to start now, no matter how small your initial contributions might be. Over time, your savings will grow, helping you achieve a secure and comfortable retirement.

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As the new year kicks off and the festive season's aftermath (and bills) hit, let’s tackle Januworry head-on with a solid plan. Ever felt overwhelmed by budgeting? The 50/30/20 rule might be your new best friend. Let's break down this simple but powerful approach to managing your money and get you on the right track for the next few months.

What is the 50/30/20 Rule?

Once all your deductions have been made, the 50/30/20 rule helps you divide your take-home pay into three simple categories:

• 50% for Needs
• 30% for Wants
• 20% for Savings and Debt Payment

The "50" - your needs (the must-haves)

Your biggest slice goes to the essentials. Here's what counts:

• Rent or mortgage payments
• Utilities (electricity, water, gas)
• Groceries
• Basic transportation
• Healthcare
• Minimum debt payments

Pro tip: If your needs exceed 50%, look for areas to trim – maybe a cheaper phone plan or a more affordable living situation.

The "30" - your wants (the nice-to-haves)

Budgeting does not equal starving. This is your fun money, and you deserve it! It includes:

• Dining out
• Entertainment
• Shopping for non-essential items
• Gym memberships
• Streaming services
• Hobbies

Remember: Just because you can spend 30% on wants doesn't mean you have to. You can use any “left overs” to boost your savings.

The "20" - your future (savings and debt)

This money builds your financial security:

• Emergency fund
• Retirement savings
• Extra debt payments
• Investment contributions
• Long-term financial goals

Quick tip: Pay off high-interest debt first – it's eating into your future savings.

Simple steps to get started

1. Calculate your monthly take-home pay
2. Do the math: multiply by 0.5, 0.3, and 0.2
3. Track your spending for one month
4. Compare your actual spending to the ideal percentages
5. Adjust gradually – Rome wasn't built in a day!

Common challenges and solutions

Not every budget looks the same, so if you're struggling to make the 50/30/20 budget rule work for you, here are some common problems:

• High debt load? Consider a 55/25/20 split temporarily
• Living in an expensive city? You might need to adjust the percentages
• Variable income? Use your lowest monthly income as your baseline

Bottom line

The 50/30/20 rule isn't about perfect math – it's about progress over perfection. Start where you are, adjust as needed, and celebrate small wins along the way.

Remember: This is a guideline, not a strict rule. Make it work for YOUR life and YOUR goals, and consult a financial advisor if needed.

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In the Investments’ world, there are winners, and then there are game-changers. Bitcoin has proven to be nothing short of a financial revolution, transforming the dreams of early investors into a staggering reality that has left traditional assets in the dust.

Imagine turning $100 into $26,931 in just a decade. It sounds like a fairy tale, but for some Bitcoin investors, it's been their reality. This digital upstart has not just entered the financial arena – it has completely rewritten the rules of investment.

A look at the numbers

Let's break down the decade-long financial journey:

Traditional assets have followed a predictable path. The S&P 500 delivered a respectable 193.3% return. Gold, the timeless store of value, grew by 125.8%. Government bonds and crude oil? They barely managed to keep pace, with treasuries offering modest returns and oil crawling to a mere 4.3% gain.

Then there's Bitcoin. A digital maverick that laughs in the face of conventional wisdom, delivering a mind-boggling 26,931.1% return. To put this into perspective, every $100 invested in Bitcoin in 2014 would be worth nearly $27,000 today – a return that would make even the most aggressive investors do a double-take.

The rollercoaster of volatility

But this isn't a story of smooth sailing. Bitcoin's journey has been a wild ride of extreme highs and gut-wrenching lows. Its price has wigwagged between $172.15 and $103,679, with dramatic 70% crashes that would admittedly send most investors running for the hills. 

Despite their rocky nature, these four-year cycles, coinciding with Bitcoin halving events, have become legendary in financial circles.

A new asset class dominates

What's truly fascinating is how Bitcoin has defied traditional market correlations. Unlike stocks or gold, which often move in predictable patterns, Bitcoin has danced to its own tune. For years, it moved independently of the S&P 500, only beginning to show some correlation during major economic events like the pandemic.

The performance breakdown:

1. Bitcoin: 26,931.1%
2. S&P 500: 193.3%
3. Gold: 125.8%
4. 10-Year Treasuries: 86.8%
5. Crude Oil: 4.3%

A word of caution

While the numbers are eye-popping, this isn't a call to go all-in on Bitcoin. The asset's volatility is a double-edged sword. Its smaller market cap has allowed for explosive growth, but it also means higher risk. While Bitcoin’s results have been eye-popping, traditional assets like stocks, bonds, and gold continue to offer more stable, predictable returns.

Bitcoin drops the mic

What Bitcoin represents is more than just a financial asset.: it's a testament to the power of innovation, a digital rebellion against traditional financial systems. It challenges our understanding of value, currency, and investment.

As we look to the future, one thing is clear: the investment landscape will never be the same again. Bitcoin has proven that in the world of finance, sometimes the most unlikely contenders can become the most powerful players.

Note: This analysis is based on historical performance data from CoinGecko, tracking Bitcoin and traditional assets from December 2014 to December 2024.

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