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Cryptocurrencies derive their value from supply and demand, with the buyers and sellers playing an enormous role in the market's liquidity, and ultimately, success. This rings true for stocks, commodities and forex markets too, essentially any asset markets with trading volumes.
Anyone participating in these markets will have been a maker or a taker at some stage, most likely, both. In this article, we're breaking down the concept of makers vs takers, exploring their vital role in the market and large quantities of these result in stronger exchanges.
Liquidity Explained
Before we dive in, let's first cover an important concept: liquidity. Assets can sometimes be described as liquid or illiquid, this simply refers to how easily the asset can sell. Gold is a prime example of a liquid asset as anyone could easily trade it for cash without any hassle, while a glass statue of your neighbour's cat would be an illiquid asset as the chances of anyone wanting to own it are slim (except for the neighbour, maybe).
Building on this, market liquidity indicates how liquid a market is. A liquid market means that the asset is in high demand, traders are actively looking to acquire the asset, while also having a high supply, meaning that traders are actively looking to offload the asset. An illiquid market then means that there is low supply and demand, making it difficult to buy or sell the asset for a fair price.
In a liquid market where there are many traders looking to buy and sell an asset, the sell order (ask price) tends to be in the same region as the buy order (buy price). Typically, the lowest sell order will be the same as the highest buy order, creating a tight buy-ask spread.
Now that we've covered liquidity, it's time for makers vs takers.
What Is The Difference Between Market Makers And Market Takers?
As mentioned above, any successful exchange requires a fair amount of makers and takers. Let's explore the difference between the two below.
Market Makers
Exchanges typically use an order book to conduct trades. The order book will store offers to buy and sell as they come in, and execute the trades when the criteria are met, i.e. someone could create an offer that says when Bitcoin reaches $40,000, buy 4. When the BTC price reaches $40,000, the order book with automatically execute this trade.
In this case, the person creating this buy order is known as a maker. They are essentially "making" the market by announcing their intentions ahead of time via the order book. While many retail investors are makers, the field is typically made up of big traders and high-frequency trading institutions.
A market maker is a liquidity provider.
Market Takers
Market takers are then liquidity "takers", removing liquidity from the market. Takers create market orders that indicate to the exchange that the trader wants to buy or sell at the current market price. The exchange will then automatically execute the trade using a maker's offer.
A taker is a trader filling someone else's order. Market makers create offers for the order book, making it easier for users to buy and sell, while market takers exercise this liquidity by buying the asset.
What Are Maker-Taker Fees?
You might have heard of maker-taker fees before, this makes up a considerable amount of how exchanges generate an income (after all, exchanges are businesses that need to make money). When an exchange matches a maker and a taker, they will take a small fee for the efforts on their part. This fee will differ from exchange to exchange, and will also be dependent on how big of a trade it is.
As makers are providing liquidity to the exchange (an enticing attribute for any trading platform) they will pay lower fees compared to a trader taking away from the platform's liquidity. Always be sure to check the fee structure and pricing on a platform before engaging in any trading activity, these will be outlined in the platform's trading policy.
How Do Trading Companies Make Money?
Cryptocurrency and blockchain technology was designed to provide a decentralized financial system that bypasses government control. However, to alleviate regulatory concerns, exchanges were established to provide a reliable and convenient means of operating within the crypto markets. These exchanges provide a secure way in which users can buy, sell and trade cryptocurrencies, and in return make money through the activities of its customers as it is a business after all.
While maker and taker fees make up a large portion of how a platform generates an income, the business also generates income through deposit and withdrawal fees, commissions made on trades and listing fees. These typically make up the cost of production and running the business.
In Conclusion
Market makers contribute to the market's liquidity by creating orders looking to be filled, while market takers fill these orders. Makers are typically rewarded for bringing liquidity to a platform with low maker fees, while takers pay higher fees when they make use of this liquidity, easily buying and selling the asset.
In this article, we’re guiding you through the intricacies of the e-money licence: what it means, who needs one and of course, how it affects you, the consumer. This new wave of regulation has been put into place to not only safeguard the consumer but also to put measures in place to identify and stop fraudulent activity.
What Is Electronic Money (E-money)?
Before we dive into the licencing requirements, let us first take a look at what electronic money is defined as. Essentially, e-money is a digital version of cash. It maintains a monetary value that can be used to make payments and various transactions, typically over the internet, or through a phone or card.
E-money products are either software-based or hardware-based and are responsible for electronically storing the monetary value. Software-based products are used on computers and tablets and require an internet connection (like PayPal for example) while hardware-based products encompass cards that have a chip card and do not require an online connection (for example, Square).
What Is An E-money Licence?
The e-money licence is a regulatory licence that authorises an electronic money institution (EMI) to conduct business. EMIs represent the digitisation of financial services and are authorized to issue money as well as provide payment cards, e-wallets, and IBAN accounts. While banks may provide a similar service, they require an alternative licence as they are able to provide a greater range of services.
In a nutshell, an EMI is considered as such if it engages in the issuing and redeeming of electronic money (e-money), cash withdrawal, deposit and payment services, remittance services, debit or credit transfers, payment initiation and execution services, and account information services. They may conduct these services only if they have the proper licensing.
How Does It Protect The Consumer?
While regulation and consumer protection are the driving force behind e-money licences, there are also several other reasons as to why the regulatory framework has been put into place. The licence is designed to provide businesses with the opportunity to gain access to the e-money market, to facilitate innovation in secure e-money services, and to build healthy competition in a secure market.
E-money licences are obtained to safeguard a consumer’s funds should the EMI become insolvent. This operates in an entirely different manner to a banking licence. Under the proper regulation, EMI’s can choose to do either of the following options to safeguard consumer funds (funds provided by customers in exchange for the issuance of e-money):
- deposit the funds into a segregated client’s funds account with an authorised credit institution, or
- acquire insurance that will cover the risks associated with the client’s funds.
This ensures that the consumer is always protected against loss of funds, and will be compensated accordingly should the situation present itself. It is imperative that consumers only choose EMIs with the correct e-money licences.
How Much Money Is Protected With The E-Money Licence?
According to the FCA regulations, the EMI is responsible for establishing the appropriate organisational arrangements to ensure that the safeguarded funds are at all times protected.
As mentioned above, this can be done by either storing the deposited customer funds in a separate account (different from the institution’s working capital and other funds) or by ensuring that they are covered by an appropriate insurance policy or comparable guarantee.
While licenced banks work in conjunction with the Financial Services Compensation Scheme (FSCS) and only insure users up to ￡85,000, EMIs are required to protect 100% of the consumers’ funds.
According to the licence, EMIs are required to safeguard all funds deposited on the platform and not just a portion as per the licence required by the banks.
While EMIs take several other precautions to protect consumer funds, the e-money licence ensures that the most fundamental legal requirements are met, granting the company the right to legally operate.
If you're looking to earn extra money from anywhere online you've come to the right place. Making money online has certainly become more accessible and easier over the years, and in this blog, we're reviewing several ideas to do so without having to invest.
Whether you're looking to make some money on the side, or as a full-time pursuit, remember that as with most things in life: consistency is key. On this page, you'll find a number of beginner options requiring no particular skillset (only a bank account) for you to look into, relevant everywhere from the United Kingdom to the European Union to Australia. Each method varies in financial contribution, which we've highlighted at the end with a rating of the start-up costs.
Top 5 ways to make money online for beginners
1. Affiliate marketing
Affiliate marketing involves an individual earning money through promoting another business's product. This can be done through your own platform which might range from a blog to a website, social media, email campaigning or simply Google Ads.
All you need is a working internet connection, a bank account and a reliable browser. Each time a friend or family clicks and signs up for the product, you bank a commission.
Many companies these days offer this service, try to find one that you and your network might be interested in and see the opportunities that they present.
Start-up Costs: $
2. Dropshipping
This will require a substantial amount of effort, however, the returns will be that much greater. Dropshipping involves selling a product online that you do not need to keep an inventory of, instead, the company that you are buying the goods from sends them directly to the customer.
You act as the middleman between the manufacturer and the consumer and make money from the margin that you add. The start-up costs will be for your online website and marketing.
Start-up Costs: $$
3. Freelance your skills
You can hire out your skills on sites like Upwork or Fiverr. Users create profiles expressing their skills, anything from writing to graphic design to music creation, and can apply to jobs requiring these skills.
These sites will typically allow employers to connect with employees, and once the work is completed the funds are deposited directly into your account. This is also a great way to start a side hustle in your area of expertise without having to tuck into your savings.
Start-up Costs: zero
4. Explore the world of cryptocurrencies
Engaging with cryptocurrencies has gained significant attention in recent years. Before diving in, it’s important to educate yourself thoroughly to grasp the complexities involved. Our blog section on how to learn about crypto is a great place to begin. The cryptocurrency market is known for its high volatility, which presents both risks and opportunities. Whether you're active daily or only occasionally, understanding the landscape is key. To get started, consider signing up for a reputable and regulated platform like Tap, which can help you manage your funds securely.
Start-up Costs: $$
5. Participate in online surveys
Online surveys are a popular way for beginners to make money online. Companies are always looking for feedback on their products and services, and they are willing to pay for it. There are several websites that offer paid online surveys, such as Swagbucks, Survey Junkie, and Toluna.
To get started, simply sign up for an account, complete your profile, and start taking surveys. You'll earn points or cash for each survey you complete, which can be redeemed for gift cards or PayPal payments. Keep in mind that surveys may have specific demographics, so you may not qualify for every survey. However, with some patience and consistency, you can earn a decent amount of extra income in your spare time.
Start-up Costs: zero
Earn money online from anywhere in the world
Of course, this list is only a small portion of the ways you can make money online, simplified down to the top 5. If you have more time at your disposal you can engage in market surveys, beta testing, becoming a virtual assistant, or even coaching.
The opportunities are endless, with a wide range of start-up costs, time management, returns and the amount of effort required are to be considered. Ensure you do adequate research in order to learn about your next venture before diving in. At the end of the day, anyone can earn money online, the first step is just to get started. Good luck, may you have only lucrative experiences.
5 tips on how to manage your money
Now that you’ve established your income stream/s, here are 5 tips on how to manage the money you’re making. Whether you’re doing this as a side hustle or a full time job, consider implementing the following 5 steps in order to build your finances. .
- Build an Emergency Fund
Just like in personal finance, building an emergency fund is crucial for making money online. This fund will act as a safety net in case you hit a rough patch, and it will allow you to continue your online work without financial stress.
- Create a Budget
Budgeting is another essential aspect of making money online. Creating a budget will help you keep track of your income and expenses, and it will allow you to make informed decisions about where to allocate your resources.
- Focus on Your Niche
To make the process of making money online more enjoyable consider focusing on a specific niche that you are passionate about. Whether it's writing, graphic design, or web development, become an expert in your field and provide value to your clients.
- Network and Build Relationships
Building relationships with other professionals in your industry is a valuable step when making money online. Networking can help you find new clients, build your reputation, and even lead to new business opportunities.
- Stay Consistent and Persistent
Making money online takes time and effort, and it's important to stay consistent and persistent. Set realistic goals for yourself, create a schedule, and stick to it. Remember that success doesn't happen overnight, so don't get discouraged if you don't see results right away.
So what are you waiting for?
Whether dissecting crypto or fiat currencies, the foundations remain the same: the currency must serve as a store of value and function as a medium of exchange for goods and services. While both these currency options tick those boxes, cryptocurrencies tend to also be followed by a dark cloud of volatility in the financial sector.
Market volatility is a natural byproduct of a developing market, however, it can also cause many losses if not managed correctly. When the crypto markets go through high levels of market volatility they tend to get discredited with being a viable payment option. After paying withness to the Bitcoin market swings, several individuals recognised this flaw in the digital currency space and created a solution, "the stablecoin".
In this article we establish what is a stablecoin is, how it fits into the financial landscape and explore the pros and cons of these digital currencies.
What Is A Stablecoin?
Stablecoins are digital currencies that harness the benefits of being a decentralized, blockchain-operated currency without volatility. Backed by any currency or commodity, stablecoins are pegged to the value of their underlying asset and managed and secured by their relevant platforms. For instance, Tether is pegged to the US dollar while Tether Gold is pegged to the price of gold and Tether EURt is backed by the Euro.
These currencies operate like any other cryptocurrency, using blockchain technology to maintain and operate the network, but do not fluctuate in value based on supply and demand. Rather the price remains consistent with the asset it is pegged to, providing a better tool for digital payment transactions.
How Do Stablecoins Maintain Their Price?
While we've established that stablecoins are pegged to a commodity and reflect that price, let's cover how exactly that is achieved. Using fiat-backed stablecoins as examples, the companies behind these coins are required to hold a US dollar equivalent for each coin in circulation (or Euro if the stablecoin is pegged to it).
These funds, also referred to as reserves, are either held in bank accounts or can be a combination of cash and short-term U.S. Treasury bonds. Most of the companies issuing stablecoins conduct third-party audits to prove that their reserves are at the correct levels and release this information to assure users that their coins are always worth $1 (or the currency-backed equivalent).
Why Have Stablecoins Become so Popular?
The first stablecoin to enter the market was Tether in 2014, pegged to the US dollar. Tether is currently the third-largest cryptocurrency based on market capitalization, illustrating its vast popularity. The second biggest stablecoin currently on the market is USD Coin, also backed by the US dollar, which sits in the top 5 biggest cryptocurrencies with an equally impressive trade volume. Both these coins have provided valuable talking points within the industry as their market caps and adoption increase and they climb the ranks of the biggest cryptocurrencies.
Due to their resistance towards volatility, stablecoins have increased in popularity and are more widely used for conducting business around the world and executing cross border payments.
The Pros Of Stablecoins
Stablecoins are popular options for both businesses and individuals conducting business across borders. Below we outline the top benefits that stablecoins present to the market:
Digital Currency
The obvious first benefit of stablecoins is that they are maintained by blockchain technology and able to conduct international transactions in a much shorter time frame and for less cost than fiat currencies. The fast settlement times make these currencies an excellent, cross-border medium of exchange. They are also easy to use as they operate from wallets in similar ways to traditional cryptocurrencies.
Zero Volatility
Due to the nature of stablecoins being pegged to a fiat currency or commodity, they typically experience little to no high volatility trading periods resulting in a more reliable currency with the benefits of blockchain technology. Pertinent to increasing its adoption.
Hedge Against Failing Markets
Stablecoins have become increasingly popular for traders to hedge against other cryptocurrencies when markets experience a decline in price. Stablecoins allow traders to quickly liquidate their digital assets and easily reenter the market when the price stabilizes.
The Cons Of Stablecoins
Centralisation
While blockchain technology and cryptocurrencies celebrate the notion of being decentralised, stablecoins do bring in a nature of centralisation, particularly when it comes to the backing of the assets. Ensuring that each coin in circulation is backed by an equal reserve value requires a team that leans the operation more toward a centralized structure.
Transparency
Several stablecoins have been called out publicly for not being transparent with their reserves. Tether, for example, has seen much public outcry concerning whether the company has the correct amount of reserves, leading to fines and regulations imposed by the US government. They have since released a report on the current reserve holdings of the company.
In Conclusion
Many traders have incorporated stablecoins into their portfolios, to have as a hedge against falling crypto markets or falling fiat markets. These digital assets are also used by businesses around the world to conduct payments with the benefits of digital currencies and without the risk of volatility. Through the Tap app, users can now access and purchase USD Coin (USDC) as well as Tether (USDT). The sleek design of the app interface makes it easy for users who want to buy or sell cryptocurrencies with fiat currency through their phones in a click.
When it comes to choosing a stablecoin, consider the projects behind it, the liquidity and the ease of use in terms of wallet compatibility.
Saving and investing are two key elements to managing one's personal wealth. In this article, we explore the benefits and downfalls of both these tools and give you a broader understanding of the topics.
What Does saving entail?
Saving money is an imperative step in building one's wealth and involves putting money away on a consistent basis, consistency is key. These funds are usually kept in an interest-bearing account, allowing the value to increase passively over the years.
In the United Kingdom, there are different types of ISA (individual savings accounts) that offer tax-free savings options.
In order to save, one must be spending less than they're earning.
What does investing entail?
Investing involves buying an asset with the intention for it to accumulate in value. This typically comes after saving, although the earlier the better. People invest in the likes of stocks, cryptocurrencies, property and even themselves (education, capital for a business) in the hopes of generating returns.
What's the difference between saving and investing?
The biggest difference between the two is the varying returns you can earn. Saving money in a bank account typically provides returns of 0.5 - 0.8%, while the return potential on cryptocurrencies and stock is much greater.
The other main difference between saving and investing is the risk. So, while earning higher returns on investments might sound much more appealing, the risk is usually greater. Savings accounts carry minimal risk and are usually insured while investment portfolios will rise and fall with the market and are only insured if the investment company fails. Investors should balance the options and establish which risk level they are comfortable with.
In light of these risks, savings are recommended for short term goals while investments cater better to long term financial objectives. This is because long term investments will ride out the ebb and flow of markets and recover even if there is a drop over a certain period. Savings on the other hand are more easily accessible and won't be "interrupted" if the funds are used for an emergency.
However, savings are also susceptible to inflation as the interest rates are seldom higher than the inflation rates. For example, if your bank is offering a 0.6% interest on your savings account and inflation rose 2%, your savings would have actually decreased in value. Investing typically beats inflation.
The similarities between savings and investing
As both tools are excellent at building and creating more wealth, there are bound to be similarities between the two.
The main similarity between the two is that both options are best started now, whether you're in them for the long or short term benefits. This is due to compounding. Compounding is the process where the interest you earn on an investment or savings account is continuously reinvested, increasing the base sum each period.
For example, if you put $1,000 into a compounding savings account and earned 2% interest each year. The next year you will be earning 2% interest on the lump sum plus the interest earned, $1,020. The next year you would earn $1,020.40 ($1,020 interest earned, $20.40). This doesn't sound like too much, but over a ten-year period, you would have amassed $219.20 without having done a thing.
Before you get started
Before getting started on either of these options, ensure that you have a positive cash flow and are debt-free. You'll also need to establish what your risk tolerance is, your short term and long term financial requirements, and when you would like to access the money.
If you don't have one already, you'll want to establish an Emergency Fund that can cover your living expenses for 3 - 6 months. Should you lose your job you can then fall back on this loan and not have to rely on credit cards with high-interest rates.
Experts also recommend setting up a retirement fund, with automated monthly contributions. Once your emergency and retirement funds are established, you can consider a short term savings account or long term investment, or both.
Pros and cons of saving and investing
Below we highlight the pros and cons of both tools:
Saving
Pro: Money is accessible and can easily be withdrawn.
Pro: Exempt from market volatility.
Con: Cannot leverage on market gains (potentially missing out on large compound interest benefits).
Con: Susceptible to inflation.
Investing
Pro: Longer time frames allow for favourable compounding interest.
Pro: Could tap into large market gains.
Con: Exposed to more risk as markets are susceptible to drops.
Con: May incur a penalty if the money is withdrawn too soon.
The bottom line
Both savings and investment options carry their own set of risks and rewards and it's ultimately best for you to speak to a financial adviser who is able to provide you with calculated professional advice.
Disclaimer: This article is intended for communication purposes only, you should not consider any such information, opinions or other material as financial advice. The information herein does not constitute an offer to sell or the solicitation to purchase/invest in any assets and is not to be taken as a recommendation that any particular investment or trading approach is appropriate for any specific person. There is a possibility of risk in investing as investors are exposed to fluctuations in all markets. This communication should be read in conjunction with Tap's Terms and Conditions.
Bitcoin and other cryptocurrencies are all about decentralised, worldwide, financial independence and liberty. Cryptocurrencies are borderless, censorship-resistant digital currencies that can be used by anybody with internet access.
As a result, crypto, at least in principle, appears to be the perfect solution for international travellers or "digital nomads." With the added advantage of having the Tap app, users can instantly and seamlessly use their cryptocurrencies as they would regular fiat currencies when travelling around.
With the growth rate of blockchain technology and crypto adoption increasing, it's only natural that we're seeing more options to spend and travel the world using cryptocurrency.
In this article, we'll look at a variety of different ways to spend your crypto while travelling with Tap and how to spend seamlessly with your Tap card. We will explore why people choose to use their crypto to travel and how the exploding $1 trillion travel market is important for the cryptocurrency industry.
Entirely Cashless
The beauty of travelling with crypto is that it is entirely cashless. You won't have to worry about dealing with foreign currency exchanges when entering or leaving a different country as all of your money is kept digitally online in your app.
With the Tap card, users can use their crypto balances to load their card and freely swipe away worldwide. The card allows for seamless payments at millions of merchants around the world, with the merchant none the wiser.
The option to upgrade to more premium accounts allows you to reduce or completely eliminate any FX fees. Get empowered and enjoy the best out of your money wherever you go.
Reduces Risk
Instead of being a target for muggings looking to steal cash, being entirely digital bypasses this risk.
Accessible
Should something happen at home you can easily and quickly send funds back. Operating 24/7 and only requiring an internet connection, sending money back home can be completed at a moment's notice. Send funds to your friends and family via crypto or fiat for free on their Tap account.
Discounts
Last but not least, many companies offer discounts to users paying with cryptocurrencies. From travel to retail, and everything in between, users can enjoy added discounts just by utilising crypto.
Should an event arise that you do need cash, users can easily withdraw cash from a regular ATM using their Tap card. Paying significantly lower fees than you would with your standard bank card, the Tap card allows you to seamlessly integrate into the foreign country with peace of mind.
How To Travel Abroad With Tap
This is the ultimate crypto vacation guide showing you how to buy everything that you might need through the Tap app for that epic crypto vacation abroad.
Flights
CheapAir.com was the first US online travel agency to open its doors to crypto, getting into the game as early as 2013. The company currently allows holidaymakers to make payments using Bitcoin, Litecoin, Bitcoin Cash and Dash.
In 2020, Travala and Expedia merged to give users access to millions of hotels and villas worldwide payable in over 30 popular types of cryptocurrencies. There is also Destinia.com in Spain, airBaltic in Latvia, Surf Air in the US, and Peach Aviation in Japan.
Conveniently buy everything you need with your Tap app by scanning the company’s QR code and confirming the transaction. Alternatively, you can make online purchases using your Tap card.
Accommodation
Travala, CheapAir.com and Destinia all allow users to book flights and accommodation in one smooth transaction. On Destinia look out for the GoCoin merchant plugin.
Booking.com has partnered with flight planner, A Bit Sky, to provide a location with both flight and accommodation options.
Savvy accommodation-seekers can look to Airbnb-style crypto startups like 99Flats in India or CryptoCribs on Reddit, or head over to XcelTrip,a decentralized travel ecosystem, which provides access to 400 airlines and 1.5 million hotels.
Food and Drink
CoinMap is an app for anyone and everyone wanting to find crypto-friendly companies. Felix Weis, as well as numerous other cryptocurrency influencers, has credited CoinMap with being the saviour for finding the closest cafe, bar, or restaurant that accepts Bitcoin, including international chains such as Subway and local providers who use crypto merchants. Say goodbye to walking around with boatloads of cash and just take your Tap app along instead.
Holidaymakers can also look to using crypto to buy a gift card which can be purchased online through Gyft or eGifter, with eGifter offering a 5% discount for purchases made with Bitcoin. eGifter offers gift cards to restaurants like Papa John, Taco Bell, Dunkin’ Donuts, TGI Fridays, UberEats and more.
Getting Around
Expedia, A Bit Sky, Destinia, and CheapAir all offer access to transfers or car rentals in their services, while Gyft and eGifter offer Uber vouchers. There is also SpendBitcoin.com, which locates different crypto-accepting services in an area, simply chose the car filter option.
Things To Do
Again, Gyft and eGifter provide access to options like Groupon where you can find local activities on offer, or head to purse.io for any last-minute Amazon purchases (snorkel, anyone?).
Travel The Tap Way
Both the Tap card and the Tap app can provide a seamless and cost-effective solution to using both fiat and cryptocurrencies when travelling. Simply load your wallet with crypto and fiat currencies, and pay directly from the app or use the card to pay at millions of merchants around the world. Say hello to easy travel and plenty of discounts.
With a range of coins on offer and an integrated smart engine that ensures the best possible prices in real time, travelling with cryptocurrencies and Tap is as smooth a ride as it gets.
With a range of coins on offer and an integrated smart router, Tap lets you store and manage your digital assets wherever, whenever. There are no border delays or inconvenient payment processes to worry about while travelling with crypto only speed and convenience. Tap is as seamless a journey as it gets.
