Introduction To Blockchain & Cryptocurrencies

A Handbook For Beginners

Textbook, 2022

186 Pages, Grade: A


How this Book is structured

Book overview

Getting around this Book

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

Chapter 6

Chapter 7

Chapter 8

Chapter 9

Chapter 10


How this Book is structured

The book overview

The book overview gives you a general introduction. Information contained in the book overview will help you determine:

     If the book is suitable for you

     What you would need to know

     What you can expect from the book

     How this book fits into your learning objectives as a whole

     How much time you will need to invest in fulfilling your understanding

The overview also guides on:

     Study skills

     Where to get help

     Possible reviews and assessments

     Illustrations & Icons


We strongly recommend that you read the overview carefully before going into details of the book.

The book content

The book is broken down into Chapters. Each Chapter comprises:

     An introduction to the Chapter content

     Chapter objectives

     Some prescribed readings for a Chapter

     Some additional readings for a Chapter

     The core content of the Chapter with a variety of learning activities


  Self-assessment activities (if any)

  The Chapter’s keywords or concepts

  A Chapter summary 


For those interested in learning more on this subject, we provide you with a list of additional resources within a Chapter of the book, these may be books, articles, or websites. Please note that these resources are optional rather than prescribed readings.

Your comments

After completing INTRODUCTION TO BLOCKCHAIN & CRYPTOCURRENCIES, we would appreciate it if you would take a few moments to give us your feedback on any aspect of the book. Your feedback might include comments on:

  Content and structure

  Reading materials and resources


  Some Feedbacks



Your constructive feedback will help us to improve and enhance future editions of this book.

Book overview


Premised on the foundations of the fourth industrial revolution, this book provides the reader with basic and simplified exposure to concepts such as artificial intelligence, disruptive Blockchain technology, and various phases of industrial revolutions. For those of you interested in a more pragmatic approach, the book gives you elementary tools to navigate the art and practice of crypto mining, exchanges, trading, FinTech, and some controversies around regulation of cryptocurrencies. Furthermore, the book points out a variety of entrepreneurial options for those seeking to pursue their dreams in cryptocurrencies and the blockchain technology.


Introduction to Blockchain & Cryptocurrencies is intended for people who want to enter and explore the world of cryptocurrencies and blockchain technology for the first time. It is also for those in the middle of their early career in trading, mining, and financial investments, but more on the side of digital currencies. This book is for you if you are generally an entrepreneur interested in diversifying your business portfolio. If you are a policymaker and a regulator in the financial sector, this book will undoubtedly open your eyes to a few things we usually tend to take for granted. If you are a trainer interested in augmenting your training in the field of trading, mining, entrepreneurship, policy formulation, and simply appreciating global trends in the ecology of crypto and blockchain, then be assured that you are at home already.

You do not need to have prior knowledge of the subject to navigate this book. Every aspect begins with basic concepts to spiral you towards some comfort level in understanding cryptocurrencies and blockchain technology.

Getting around this Book

While working through this book, you will notice the frequent use of margin icons. These icons serve to “signpost” a particular piece of text, a new task, or change in activity; they have been included to help you find your way around this book.

A complete icon set is shown below. I suggest that you familiarise yourself with the icons and their meaning before you get started. However, if you are already familiar, that is a bonus for you.


Chapter 1


Have you ever imagined and taken a ride in a self-driven car? Have you ever taken a flight on an auto-piloted aeroplane? Have you ever had a live video call or chat with a relative from overseas on your cell phone or computer? Have you ever had a neuro-technological enhancement of your body organs such as hands, limp, eyes, or even hearing? Have you ever undergone or heard about genetic modifications to determine whether you want a baby boy or baby girl? Have you ever heard of safely storing your genomes for more than 200 years to have a child of your choice after you have long disappeared from the earth? Do you have a blockchain-based digital financial account where you can make transactions (pay and receive payments) without the need for bank involvement? If one answer is at least a yes to these questions, it indicates that you are already part of the fourth industrial revolution. If your answer is No to all these questions, then the chances are that you live a life that has not yet arrived in what we call the fourth industrial revolution of today. If your answer to all the above questions is yes, then the chances are that you are a fourth industrial revolutionary or champion.

In this Chapter, the aim is to make you understand what 4thIR is, a step further. You should distinguish it from other preceding industrial revolutions and identify its opportunities for application in interface with various artificial intelligence facets. Most importantly, you must apply AI approaches in solving problems in the private, public, civil society and individual spheres and educating other newcomers to the 4IR space.

In so doing, the chapter will tell which textbooks and materials to read, give you historical perspectives of other industrial revolutions before this one, provide you with some activities to stimulate your mind in terms of the meaning and application of 4th IR in today’s world. At the end of the chapte, you will receive a chapter summary.

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The History & Anatomy of Industrial Revolutions

Suppose we are already at a fourth Industrial Revolution. In that case, this presupposes we have already gone through the first, second, and third revolutions. It further implies that there should be a clear-cut timeline when each of these revolutions started and ended. Unfortunately, this is not the case. Individuals, various geographical societies, companies, and countries experience and undergo these revolutions in a non-sequential manner, at different times, and with different experiences, let alone other impacts. That is, while we are talking of the fourth Industrial Revolution here and today, someone elsewhere in a different time zone and location could still be some years before entering the 4IR era. Even though you are reading this Chapter on the 4IR, it might be the beginning of your third or second Industrial revolution, depending on experience and where you are.

So do not be overcarried by the mere excitement of the word fourth Industrial Revolution when you are not there yet. The remaining part of this Chapter commits to clarify the various industrial revolution further.

The 1st Industrial Revolution (MECHANISATION: 1760 – 1830)

An industrial revolution can be simply defined as a significant transformation or turnaround in the primary means of economic production or structure. The 1st Industrial revolution was characterised by a shift from an agrarian and handicraft economy to one dominated by industry and machinery. Handy tools like cutting tools say the disappearance of and replacement of stones with knives, axes, and sharpened objects like spears and even wood saws. At the same time, animal power for transportation was replaced by a new form of energy, such as the emergence of the steam engine or coal-powered machines. Examples can include:

A change from feudal food processing to one where machines are used to process food is one example. This covered a revolution from the use of drought animal power to plough crop fields to a modern time where machinery (tractors) has now overtaken the role of animal power. Another transformation is harvesting or processing of food using hands and sticks to pound grain off their stocks to one where modern equipment (tractors) are now used to carry the task. Furthermore, food storage has transformed from feudal open silos to modern containerized ones with cold storage for lasting preservation.

The fact that countries are different in many ways almost prescribes how they can adopt or adapt to opportunities and challenges offered by an industrial revolution. This explains why some countries have experienced dating back before the first industrial revolution while others are the pioneers of the fourth industrial revolution at the same time.

The 2nd Industrial Revolution (POWERING: 1831 – 1969)

The accelerated invention of machinery towards the end of the 1st Industrial revolution gave birth to the combustion engine. Using the engine, a new source of energy – electricity, was created. At the same time, there was a strong demand for differently shaped forms of steel in industries around the world. The capacity for the chemical industry too gave rise to synthetic fibres, fertilizers, paints, and other by-products. Furthermore, the mechanization of the second industrial revolution saw the emergence of the telephone, the aeroplane by the Wright Brothers, automobiles coming from large-scale industrial parks of that time.

It is also worth noting that as Industrialization was evolving – all the way from the 1st IR to the present, money has been evolving in different forms and shapes since 1600BC when the first coin was minted by King Alyattes in Lydia, now Turkey. As industrialization evolved, the shapes and forms of coins improved and increased along with the increase in trade around the globe.

As stated earlier above, for different contextual reasons, countries are most likely to be having heterogeneous experiences of and different timelines of entry and exit to the 2nd Industrial Revolution.

The 3rd Industrial Revolution (ICT: 1970 – 2015)

After the significant revolution in powering humankind with electricity as a new form of energy in the Second Industrial Revolution came a second wave of alternative energy generation from nuclear, accompanied by electronics and machinery automation with robotics. This marks the era of computers and a significant advance in communication technology.  As such, the 3rd IR is associated with a mass arrival of automated home devices and gadgets used to perform an endless litany of tasks hitherto done with bare human hands. Examples of the revolution include shifts from telegram to cellphones, steam-powered machinery to solar-powered aeroplanes, from manually-operated music devices such as guitars to electronic keyboards, and the list goes on.

The following illustrates some of these transformations during the 3rd IR:

3rd Industrial Revolution





Electric guitars


Smart factories

There are many components or aspects of transformations during the 3rd IR. Poignant, however, are the shifts in the means of electricity generations from a variety of sources spanning from non-renewables to renewables such as hydro, nuclear, thermal, solar, wind, tidal, and others. Along these comes a significant advancement in communication, including, but not limited to, shifts from the phone bell to a cellphone. With the aid of improvement in electronics, many manually-operated musical instruments also disruptively changed from acoustic guitars to digital ones.

On the financial front, like the shifts in energy form, money changed from coins to papers to credit cards to electronic records as mostly known in today’s world. Along with globalization, the shifting fronts of currencies have become the most significant enabler in international trade.

The 4th Industrial Revolution (DIGITALIZATION: 1971 – Present)

The 4th IR is rooted in several components of the 3rd IR. However, the critical distinguishing aspect of the 4th IR lies in the ability to integrate those means of production through the use of digital technology. It aims at creating a virtual world of controlling the world around us using the abundantly available Big Data stored in digital platforms. In other words, while there was a remarkable emergence of electronics during the 3rd IR, the 4th IR focuses on harnessing the power of data, information, communication, and energy to remotely or virtually operate and control modern world means of production.

A prominent feature of the 4th IR is its ability to disrupt technologies instead of progression. That is, based on new blockchain technology, artificial intelligence with the power to mimic and even improve human performance has taken centre stage in transforming economic, political, and social systems in ways not predictable based on past experiences and knowledge. For example, the skills we have accumulated over the years in driving automobiles will almost certainly become obsolete as more future vehicles will become self-driven – needing lesser and lesser manual intervention from us. We will then need to acquire new skills that place us in better and different roles we play with new-age vehicles. In this way, our comfort zone of acquired skills and knowledge will indeed become disrupted by the new technological advances – leaving us guessing what else we can do better going forward. With the advent of fifth-generation connectivity (5G), doctors need not be physically present in a theatre to operate but perform the same task virtually using artificial intelligence.

The same can be said about our approach to money. In the 4th IR, money has become more and more digital, virtual, and less controllable by a central authority. This leaves central governments, financial institutions, and private users with more challenges of handling, regulating, and controlling modern digital currencies – cryptocurrencies as they have come to be known. With such artificial intelligence, accountants are less needed in today’s financial space. Lawyers are lesser and lesser needed as smart contracts are becoming the order of the day. No one knows precisely the magnitude of disruption the 4th IR will bring along, but one thing is certain – there will be 360 degrees of transformation in almost everything we have known for centuries.

4th Industrial Revolution



autonomous cars





In the future, today’s human-driven cars will shift to self-drive assisted by the power of digital connectivity, creating a virtual world. The Internet has enabled the world to become a village with fast connectivity through the designated central authority of search engines and social platforms like Google, Facebook, etc. However, the centrality of the internet will now become decentralized, democratic, and more openly linked across the world. Bitcoin and other crypto currencies will replace fiat currencies controlled by central authorities - ushering in a new world of self-regulated people’s currencies.

The extent to which countries, corporations, and individuals adopt future technological and digital operations as a new way of life will mostly depend on their willingness and preparedness to change – mainly on the speed of adoption. As you read this manual, some countries have led in forging futuristic digital culture in almost all aspects of life, from money (crypto) to autonomous cars. Unfortunately for other countries, these transformations into the new digital future are possing a heavy burden of uncertainty – not knowing how to deal and handle the disruptive lifestyle, which has almost become a permanent feature of the end. Such disruptive incapacitation of individuals, corporations, and governments will land several challenges and opportunities, as pointed out in the next section.

A summary of the four Industrial Revolutions can be illustrated by the diagram below.

Challenges & Opportunities with the 4th Industrial Revolution


The 4th IR comes with challenges at the individual, business, and public levels in many ways. Every time there is an industrial revolution, there is also a concurrent societal transformation. In most cases, the industrial revolution comes first. Then society transforms and adapts to the new industrial norms. The biggest challenge is that the catch-up chase takes some time, ranging from weeks for Individuals to even decades, for the public and corporations.

Disruption to existing knowledge and jobs. If you were qualified as a teacher in the 3rd IR, you would become useless during the 4th IR unless you horn in new knowledge of teaching through integrated cyber-physical, digital and biological spheres to reach out to your learners/students. Without acquiring these new skills, the disruptive transformation will leave you behind in the dustbin of history.

With the automation of labour, the income gap between capital investments and labour could yield more inequality. The integrative digital era of the 4th IR requires more digital and cyber talent to provide solutions in coding and related digital literacy. As such, and as we move into the 4th IR, such skills and talent do not exist right now, and it is scarce. Therefore, a digitally literate workforce will be the highest paid jobs from the demand and supply principle than other traditional occupations.

Irreversible connectivity presents a heavy cybersecurity burden and vulnerability for our homes, workplaces, handsets, cars, and many other valuable applications linked through the digital sphere. Those with fewer security resources will be much less secure and more dependent on those with more cybersecurity resources.

Service delivery approaches in education, finance, tourism, civil society are changing in many ways too. For example, one need not go to a bus/Taxi station to get a ride in smart cities anymore. It is just a question of making a call from your smartphone and be picked right where you are. Textbooks and libraries are increasingly turning obsolete as knowledge delivery has become phenomenally cyber and digital.

With all the transformative aspects of the 4th IR, governance, management, and administration are all bound to change too. Decentralized and trustless cyber corporate space will deal a blow and usher new meaning to boardroom meetings requiring a certain quorum to legitimize decision-making. Elections will no longer need to line up in ques as voters can cast their votes in a blockchain-enabled platform to provide more transparent and credible rig-free results. The role of banks and financial regulations will see a new dawn of governance parting ways with the past. Governments will need to rethink and look at money differently as paradigms are shifting.


On the other hand, there are endless opportunities latently coming with the latter industrial revolution:

In the 1st IR, humans changed from using their physical bodies to using tools and machines to produce goods and services. During the second, humans entered mass production of goods and services with the aid of automated machinery. During the 3rd, productivity increased further with the help of robotics, and during the 4th, labour productivity gained even further with the use of artificial intelligence.

Speed of adoption between innovation to markets through 3-D Printing. The lead time between product development and market entry has been exponentially increased by the innovative 3-D Printing of the fourth industrial revolution. During the 3rd IR, the lead time would be around months to years while prototypes were being dry run to test their fit into the market. During the 4th IR, prototyping timelines have been slashed drastically with the use of simulated product finishing in the market conditions where prospective end-users can test product feasibility almost concurrently with the aid of 3-D Printing.

Companies will save lots of jobs through automation. The employment of machines means avoiding costly labour hiring exercises. While this might be a drawback concerning the job creation drive, the advent of automated jobs leaves equally abundant opportunities for the labour workforce to change careers and re-direct talent disruptively into alternative occupations that deal with developing, operating, and maintaining those very robots. That is, employment in programming and coding will increasingly become the competitive labour advantage of the future.

Fusion between physical, digital, and biological spheres will create new markets and growth opportunities. Nobody knows with precise exactitude what more opportunities such fusion will land in the future. Still, one thing for sure - there will be new types of jobs and occupations for which current generations of labour must attune themselves to cope and take advantage.

Robots have the potential to improve our quality of life at home, work, and in public. If robots can take over the workload of labour, it is equivalent to a manager delegating all his responsibilities to his subordinates and achieve more through other people. Robots are here to make us look smart and phenomenally achieve exceptional results we could not have achieved on our own singularly.

The Internet of Things (IoT) now enables operations in the physical world with live data available on the internet. Robots can perform automated tasks in a repeat/cyclic manner as instructed and programmed by humans. Where instructions have not been provided, robots can still be issued with live algorithmic data over the internet for them to carry out alternative, none-predictable, non-linear tasks. This is the mantra of the fourth industrial revolution, where cyber reality can interact with the physical world to deliver tangible outcomes.

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In this Chapter, you learned about two distinctive aspects of the Industrial revolution. First, the chapter defined the concept of the Industrial Revolution. Then with some illustrative examples, it described the 1st, 2nd, and 3rd Industrial Revolutions. Likewise, the Chapter further outlined the whole meaning of the 4th Industrial Revolution. The second part of the Chapter was fully dedicated to the opportunities and drawbacks brought by the 4th Industrial Revolution in today’s individual, corporate, and public life. With this knowledge, though limited, you should be fully equipped to share and educate future prospective learners on what the fourth Industrial revolution implies and its potential for future trajectories. In the next Chapter, you will learn a vital component of the fourth industrial revolution –Blockchain technology.


Chapter 2

The Blockchain Technology


Marriage is a contractual agreement between two parties (A & B) to enter into a matrimonial relationship. However, to legitimize this contract, a third party is always needed. In a Western context, a court will be that third party to validate the marriage (with a marriage certificate). In other traditional contexts, a community of attendant elders, friends, and relatives gather to serve the role of legitimizing the marriage with observation and eye withness testimony. If the court comes under fire and the documents are irretrievably lost, nothing remains to authenticate the marriage further.

On the other hand, if one of the eyewitnesses dies, others that remain will still be there to validate the authenticity of the marriage. Therefore, the question is, which system is better in safely cascading and sustaining the authenticity of the marriage? Is it the court centralized-control authentication or the public-decentralized authentication system?

There is no right or wrong answer. However, if you prefer the decentralized public control system, you are already bordering on the principles of Blockchain technology. More shall be said, but for now, note that the ‘blocks’ are the individual parties (people or organizations), and their connecting relationships are the chain: Hence the word blockchain. Blocks can also be computers, and the chain is their interconnectedness. Blockchain technology is that part of the internet that brings with it decentralization of authority, transparency of control, where all parties (not just one authority) has access to viewing and authenticating a contract, product, transaction validity and with no power to alter such without the approval of the same parties involved. Blockchain is democratic at the core, and in its way, it is corruption-proof. It has many applications, and the metaphor of marriage can be extended to any other economically valuable applications such as Accounting; Legal Contracts of any form; National Identification document (IDs, Passports, Birth Certificate, etc.); National Qualifications (Certificates, Diplomas, Degrees); Trade (international transactions, including tariffs, etc.); Elections (voters registration, casting of votes, counting of votes); Salaries and Wages (including pension payments and others); and the list goes on.


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What is Blockchain & How Does it Work

The following figure simplifies what a blockchain is:

blockchain technology explained

Figure 1 Picture - Courtesy of

In the case of a financial transaction between two entries, the initiator records or deposits the request on the first computer sometimes called a node or a block. The requested transaction is broadcast or made public to peer computers/nodes on the same network (referred to as a Peer-to-Peer network). The peer network nodes/computers validate the transaction and the parties’ status using known algorithms. Once the transaction is verified on the web of peer nodes, a new block of data is created and added to the existing ledger of transactions. This new block of data on the ledger is complete, permanently stored, and cannot be altered.  It is also distributed to all computers on the network. When one computer crashes or is hacked, other remaining computers retain the same original record and thus can be retrieved anywhere else without the monopoly of a single node/computer.

There can be millions of computers on the same peer-to-peer network, keeping the same ledger in different places all over the globe. As such, a record of a single transaction is kept and stored ubiquitously.

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When Crypto Money opened its first bank account in Gaborone, Botswana, the bank required all designated shareholders to sign a single document. The challenge was that the shareholders were in different locations around the world. The traditional approach was to send the paper in sequence from one member to another to deposit their signatures in turns. It took several months because each shareholder would have to print, sign, scan, and forward the document at a time, while others are locked out of the process as they could not do this in sync. These delays cost the company a lot of money in fines and opportunities. In the end, members did it. However, they could have used a better option of Google Docs where parties could have access to the same document version simultaneously. However, as conservative as banks would be, this was not permissible. At best, this simple processing of documents could have been done in minutes using distributed and decentralized documentation where all shareholders could have deposited their signatures in real-time. Blockchain was designed to solve problems of this nature and would have saved the company time and money.

In this way, blockchain continues to gain admiration and trust in business cycles because it is:



Centralized Systems

Decentralized Systems

Centre of Control

In one location

In Different Locations

Knowledge & Information

Held by one Central Authority

Held & Distributed at various places

Access to Old & New Transactions

Only one authority

Everyone on the network

Ability to Alter Records





All financial (payments and transfers), contractual (agreements between two parties), or public record  (ID, National Votes, Passports) transactions are quickly and conveniently retrievable and disclosable on demand. Some may criticize such easiness of disclosing public or personal information as an onslaught on privacy. With a blockchain system, this is not and shall never be the case. Of course, all records are accessible but stored and kept in cryptographical format. That is, if you were to look up a person’s financial history, you would not see “John paid 2 Bitcoins to Josephine on 24 August 2020”. Instead, you will get something DDktl2347PLnn24sYjkltmTYPVER347ko89ql sent 2 Bitcoins to tTH235vmo<Y?>VCXQrt88982@3#45lu90AZzz. In this way, every transaction is accessible but concealed to maintain confidentiality and protection of privacy. If need be, the coded or encrypted identities of these kinds of transactions can further be craked open through complex mathematical processes called mining by advanced computors for which payments may be requested. See Chapter 5 for further discussions on this.


Borrowing from the words of Blockgeeks:

“Immutability, in the context of the blockchain, means that once something has been entered into the blockchain, it cannot be tampered with”. This spells the end of creative accounting for financial institutions, and no embezzlement of funds can ever be possible. Blockchain gets this right by the use of a cryptographic hash function. In other words, transactions are coded using Secure Hashing Algorithm 256 – in the case of Bitcoin.

That is, data input of any length or size into the blockchain is coded into a fixed-length output code. For example:






Trade with Crypto Money


The difference in the output HASH is a standing testimony that the two transactions or inputs are complete of different nature. A profound difference will correspondingly appear in the HASH output if a small change is done to any of those transaction inputs.






Trade with Crypto Money


So if you want to keep track of any historical input data, blockchain will remember a simplified and standardized output HASH string irrespective of its size. To open and retrieve the full content of the input, using computers can process complicated algorithms – a process called mining and discussed in detail in Chapter 5. The creation of codes or HASH strings on the blockchain has and will, in the future present astronomical career opportunities for those who want to pursue meaningful occupations in this field. Furthermore, as many countries introduce and launch sovereign digital currencies, experts with cryptocurrencies will be in demand, as Areddy (2021) contests.

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  A blockchain is a datastructure, which stores transactional records in the form a block chained and stored in several databases, and is essentially a digital ledger of transactions that is duplicated and distributed across the entire network of computer systems on the blockchain.

  Blockchain is a type of Distributed Ledger Technology (DLT) in which transactions are recorded with an immutable cryptographic signature called a hash. Each block in the chain contains a number of transactions, and every time a new transaction occurs on the blockchain, a record of that transaction is added to every participant’s ledger.

Blockchain Applications & Its Challenges

Blockchain technology offers meta-transformative opportunities in the public, corporate and civil sectors. At the same time, its arrival brings a plethora of challenges or drawbacks in one way or another. Let us first look at the opportunities it offers.

In the Chapter Introduction, we pointed out several possibilities of applications using the blockchain technology such as Accounting; Legal Contracts of any form; National Identification document (IDs, Passports, Birth Certificate, etc.); National Qualifications (Certificates, Diplomas, Degrees); Trade (international transactions, including tariffs, etc.); Elections (voters registration, casting of votes, counting of votes); Salaries and Wages (including pension payments and others).

One does not need to look far. Just between September and December 2019, numerous cases pointed to a famous drive to adopt blockchain technology. Countries, corporations, and international payment systems are all gearing up to optimal exploitation of blockchain technology.  Today, China is the leading country in the rate of adopting blockchain in the world. In September 2019, the Bank of China gave US$57.7 billion worth of blockchain-based special financial bonds for financing 410’000 small and micro-sized companies, representing an increase of 35% since a year before. In Turkey, Cointelegraph has it that the country plans to digitalize its national currency – the Lira by 2020; one of the biggest banks – Takasbank, has launched the BiGa Digital Gold platform to assist the banking industry exchanging gold. As a result of the growing blockchain and crypto ecology in the country, several crypto exchange companies such as Binance and Huobi, and lately, have opened offices there. These infrastructures now enable Turkey crypto users to buy and sell Bitcoin (BTC), Ether (ETH), and Tether (USDT) without third parties. This makes Turkey one of the leading economies in placing its fiat currency on a blockchain platform.

Contrary to the norm, Africa is not sitting idle and just watching events unfolding. Experts believe that the decentralized Ledger Technology of blockchain is the key to solving developmental problems plaguing the continent. For example, though many governments on the continent lag, Kenya officially recognized blockchain digital currencies in the country. Nigeria applies a blockchain-based Passenger Manifest System (PAM) to improve on details of passengers using public transport systems and accessing such information instantly in cases of accidents. For Nigeria, this is essential in enabling hospitals to treat patients from road accidents. According to Salami (2021), Ethiopia, in partnership with Cardano, IOHK, and Emurgo, became the first African country to employ the power of Blockchain to grant primary, secondary, and university students a digital identity (called Atala Prism) that can track their educational, career and future progress.

Like countries, Banks and International payment systems are also increasingly gearing up for blockchain-based operations. Africa’s Largest Bank – Standard Bank, joined the blockchain-based Marco Polo Network in 2019. With this reasonable Decentralised Ledger system, the bank will now facilitate trade financing solutions in the ecology of similar players worldwide, such as Commerzbank, Anglo-Gulf Trade Bank, Danske Bank, NatWest, Alfa-Bank, Bayern LN, Helaba, S-Servicepartner, RBI, and Bradesco. Similarly, the Bank of America too joined Marco Polo Network round about the same time to facilitate international trade financing based on a decentralized, speedy and reliable blockchain platform. Not surprisingly, the global payment system – the Mastercard and BitPay have since partnered with R3 For Payment Solution and Wallet Payment, respectively.

With these latest developments, the future of finance looks headed towards a decentralized/borderless, cashless, and digitalization at a scale unprecedented before. However, there will be a couple of challenges or hurdles to be overcome before a mass adaption of blockchain is fully realized.

The challenges that come with blockchain range from technical, policy/ regulatory readiness, or preparedness on governments, corporations, and individual citizens. In the same way that blockchain-based cryptocurrencies threaten to eliminate third parties like banks from transactions, lawyers from intelligent agreements, and accountants from accounting, many governments fear losing power and control over their centralized currencies to embrace blockchain-based digital currencies. As a result, too many governments worldwide are reluctant to adopt blockchain, though the fear is imagined rather than real. Those who are pondering to embrace blockchain technology are plagued by a lack of confidence, understanding, or lack of technocrats who can better advise them on how, where, and when to adopt blockchain. Therefore the speed of governments enacting policies and regulations to deal with the integration of blockchain technologies is worryingly slow. Due to the absence of guidelines and regulatory provisions in handling blockchain-based operations in many countries, individual corporations and citizens already applying the technology face uncertainty regarding the legitimacy of what they do.

Scalability. Secondly, a limit to the adoption of blockchain is technical scalability. Computers with higher power of processing data are required in validating transactions on the blockchain. They do this by first downloading all the data on the entire node to perform the verification. It is estimated that, for example, one node of verifying a Bitcoin takes about 1MB per block every ten minutes, amounting to 241GB. Etherium full node takes more than 3TB of data. This means as time goes on, more and more data storage will be required, and not every organization has the technical scale of such resources of computers to install for that purpose. However, as time goes on, there is also a strong belief that gadgets will become more user-friendly in both data storage and computation. Therefore data processing might become less demanding in terms of data storage and speed.

Speed of Transaction. The strength of a decentralized ledger that comes as an advantage to blockchain is processing transactions in real-time. Unfortunately, the current rate of processing real-time transactions on blockchain is estimated at seven transactions per second. Unless blockchain processing speed changes, as more adoption spreads across the world, there will come a time when the entire system will crash due to the growing demand for processing. To that extent, there might be a slow down in the speed of blockchain processing which will compromise its competitive advantage of real-time verification of transactions. Only supercomputers with Terra Gig can resolve this challenge, though it remains a distant hope for now.

Energy Demand. Computers with a real-time capacity to validate complex transactions (usually known as Proof of Work) on the blockchain take in a lot of electrical energy. According to Dr Mark van Rijmenam (2020), “It is estimated that the PoW consensus mechanism in the bitcoin blockchain currently consumes 66.7 terawatt-hours per year, which is comparable to the total energy consumption of the Czech Republic, a country of 10.6 million people”. Although there are stronger signals of improved innovations to bring down these costs in the future, most developing countries may find such energy consumption prohibitive in adopting blockchain operations at the public sector level. But with the under-utilization of abundant alternative energy resources such as solar, and the potential placement of crypto mining plants nearby power stations for optimal use, this challenge is insurmountable.

Underdeveloped Blockchain Ecology. A fully-fledged operational blockchain sector will require various components to be in place. At the least, these include, but are not limited to infrastructure (like Etherium, EOS, Nxt, Ripple, etc.), consensus mechanisms (like proof of Work, POW; proof of stake, POS; and proof of authority, POA) to determine which nodes are designated to validate transactions. Distributed computing on decentralized ledger principles, distributed storage, privacy and identity (including a pool of talent responsible for coding), money transactions like cryptos, about 45 Million wallets which are digital bank accounts that allow you to buy, use and store crypto, exchanges to enable swapping of more than 2398 cryptocurrencies in more than 140 countries, and Industry applications of all sorts are among other necessary resources.

Lack of Talent. Currently, the greatest challenge of many countries and corporations in the adoption drive for blockchain is the lack of personnel qualified in programming. There are also limited institutions of training that offer courses in the blockchain. This leads to a lack of talent pool to accelerate the entrepreneurial opportunities inherently available on the blockchain platform.

Leadership. The momentum towards the full adoption of blockchain requires visionary leadership, most especially at the political level. This will create an environment where countries will eventually develop policies from which blockchain-based practices will be legitimized. Unfortunately, few leaders have such a vision towards the full adoption of blockchain in this world to date. Leadership sensitization on the values of blockchain will become an imperative formula in driving adoption of the blockchain technology.

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Areddy, J. (2021). Crypto Experts in Demand as Countries Launch Digital Currencies. The Wallstreet Journal.

Salami, I. (2021). Ethiopia’s blockchain deal is a watershed moment – for technology and Africa. East London: The Conversation.




Decentralized Ledger:

A database of transactions stored and accessible to several stakeholders over a distributed network of computers across geographies.

Smart Contract:

A Blockchain-based protocol that facilitates the initiation, verification, and enforcement of agreements without the need for an intermediary third party.


A building block of complete transactional data on each computer or device on the Blockchain. An entire node verifies, saves, and broadcasts transactional history to other nodes on the chain.

Crypto Money:

A digital asset is used as a medium of financial transactions/exchange while serving as a store of value.

Hashing Algorithm:

Input data of any transaction is coded through an algorithm of fixed length and re-coded to a new output of a specified length.

Adoption Drive:

A combination of individual, corporate, and public efforts to popularize the adopted application of Blockchain-based practices.



In this Chapter, you learned about blockchain technology’s basic principles and advantages, such as distributed ledger controls, transparency, and immutability of transactions. You did also come across or managed to create your blockchain wallet, thereby joining millions of other global citizens on the horizons of steering the world into a fully digital society as part of the fourth industrial revolution. Indeed, it is because of these gains, growth in popularity, and adaptation that blockchain has now increased its footprint to more than 140 countries worldwide. In so doing, Bitcoin has raised its market share to more than US$200 billion.

However, blockchain has some challenges such as limited scalability, slow speed of transactions, high energy usage, underdevelopment of its ecology, lack of commensurate talent, and uncertain leadership. All these challenges combine to restrict its acceptance in some countries across the globe. But with the increased number of cryptocurrencies, the demand for blockchain takes a positive outlook in years to come.

Chapter 3


Talking about cryptocurrencies is like talking about money. This is because cryptocurrencies are money and money. After all, they all do what money can do. They can pay for products and services. They can be received as salaries, payments for services, and products issued by supplies.

Furthermore, cryptocurrencies are digital assets that can be used as a store of value. The King of Crypto – Bitcoin came into existence in January 2009, shortly after the global financial meltdown of 2008. Those behind it – the Satoshi Nakamoto, wanted an alternative currency from the US$, not controlled by a single authority such as the Federal Reserve. The intention was to put control in the hands of end-users like you and I – free from manipulations by third parties such as governments or banks.

In the beginning, a few people did not take this initiative seriously that much. Hence the value of Bitcoin (for example) was about US$0.99 then. However, the value kept, and still, keeps on growing as demand for its uses grows around the world. By February 2011, one (1) Bitcoin was equivalent to US$1.00. In March 2011, it rose to US$1,250.00. By December 2017, Bitcoin price reached a peak of US$19,825.97 per coin. The highest ever since the time of writing was in May 2021, when it was US$62’200.00. Sooner, all these records could be history when it breaks new all-time-highs shortly.

What mainly explains this phenomenal increase in the value of Bitcoin is its default deflationary characters over time. Nakamoto issued a limited supply of 21 Million coins to release the last one into the market by 2140. The nodes on the blockchain solving complex Bitcoin transactions are rewarded through the number of Bitcoins they can verify per block – a process called Mining (see Chapter 5). Between 2008 and 2012, miners were allocated 25 Bitcoins per block. After the first halving – between 2012 and 2016, the allocation of Bitcoins per block was halved to 12.5. There are 144 blocks mined per day on average, and therefore (144 x 12.5 Bitcoins) = 1800 Bitcoins mined per day. The subsequent having is expected from the 12 of May 2020, bringing the Bitcoin per block to 6.25 Bitcoins and levelling at 900 Bitcoins being mined per day.

Each time the halving takes place, the price value of Bitcoin arguably goes up as well. This is how those who invested in Bitcoin have become millionaires. In turn, this creates an insatiable demand for Bitcoin as its supply in the market continues to deflate. With time, there may be no future for earning from the Mining of Bitcoin after 2140. No one exactly knows what will happen then, but most of the Bitcoins ever created will be circulating in the global market.

Like Bitcoin,  all other cryptocurrencies have more or less the same general protocols of decentralized peer-to-peer deflationary characters, though with variable features. The rest of this Chapter will deliberate on various types of cryptocurrencies, their volatility, how to acquire them, and provide a few examples of how one can exchange them for fiat.

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The Crypto Market

The crypto industry is vast and still growing. Since 2008 to date, the number of cryptocurrencies has surpassed the mark of 5000. There are also now more than 300 exchanges around the world that handles cryptocurrency transactions with a market capitalization exceeding US300 Billion at the time of writing. This is a massive surge for a market segment of crypto that only started 12 years ago. However, this is minuscule compared to the traditional world economy strangling at a GDP of US$80 Trillion, handled by about 3521 Banks/financial institutions globally.




5000> [16/02/2020]



Market Capitalization

US$288 Billions> [16/02/2020]

Traditionally, the crypto market has always been dominated by Bitcoin. Some refer to it as the King of Cryptos. Others call it the digital Gold – almost to the point of using it as a standard of exchange in global trade and transactions. However, some coins have since joined the crusade of crypto space and can be equally used to stabilize trading and exchanges in the market. Therefore, there is a need to distinguish what are stable coins from altcoins, tokens, and so forth.

StableCoins: A stable coin is a digital cryptocurrency whose value remains the same. They are designed this way to minimize the volatility of price actions in the market. Usually, they do this by pegging or collateralizing them to fiat-regulated currencies. They can also link them to an exchange-traded reserve commodity (like gold, platinum, silver, etc.), another cryptocurrency, or not backed by anything. Crypto traders use stablecoins to secure or hedge their hard-earned profits from price fluctuations – a holder of value. The list below shows some of the top trending stablecoins in the market (February 2020).





Market Cap. @ Time of Writing







$1.9 B

True USD







USD Coin







Paxos Standard Token







Gemini Dollar







Maker DAO








Altcoins: Altcoins refers to all cryptocurrencies that came into existence after the success story of Bitcoin. They can be an alternative to Bitcoin. Hence the name altcoins. In their own right, altcoins have their inherent competitive advantages. Some like Ripple (XRP) and Etherreum (ETH) enable faster real-time cross-border transactions for many fiat currencies. Other altcoins like Litecoin (LTC) have a faster block generation rate than Bitcoin and thus would allow transactions to be verified much faster without timing out, like in the case of some Bitcoin-based payments. XRP and EOS have been pre-mined and are therefore not subjected to mining that requires a lot of computational power consumption – perhaps making them candid for adoption by many governments. Here is a list of a few top altcoins to familiarise with:


Birth Year

Market Cap

Token Value

Ethereum (ETH)




Ripple (XRP)




Litecoin (LTC)




Tether (USDT)




Bitcoin Cash (BCH)




Monero (XMR)








Bitcoin SV (BSV)




Binance Coin (BNB)




Libra (LIBRA)




The list above is just a tip of an iceberg in the sea of many altcoins in circulation worldwide. In the next section, let us look at acquiring cryptocurrencies – how one can obtain them. We will also take a brief look at the state of regulating cryptocurrencies in different markets or countries.

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Crypto Transactions

Where and how can one find cryptocurrencies? Well, several exchanges can supply and accept cryptocurrencies. A user is usually required to sign up through these exchanges and create a personal account on a given exchange platform. When signing up individuals, exchange platforms apply strict vetting measures of security validation to make sure that no children under age fake personalities get access to such accounts

Let us take a few examples to demonstrate this point. As you are about to do that, note that all cryptocurrencies are digital assets and only exist online. Therefore one needs to have reliable, fixed network connectivity, a smartphone, and/or a personal computer.

  Signing Up with Crypto Money:

  Signing Up with Binance:

  Open your browser

  Go to

  Click “Register”, and the following dialogue will open. Complete and follow the instructions as required.

  Follow all the steps and provide all the documents as requested

  Once your account is fully verified, it should look something like this: The key four security features should be entirely up to date.

  That is, your 2-factor authentication (2FA) should be enabled.

  Identity should be thoroughly verified

  Your Whitelist Withdrawal should be “turned on”.

  Your Anti-phishing Code should be up to date

At this stage, you are in a position to withdraw or deposit money into your Binance account. You are also ready to buy and sell any cryptocurrency listed on the exchange. For further information and self-coaching, please do read, almost daily, other many offerings provided by Binance at its Binance Academy, where they provide you with a Beginner’s Guide.

  Signing Up with AltCoin Trader:

  Open your browser

  Go to:

  Click on Register

As the following dialogue opens up, please furnish the necessary details and follow all the instructions when requested:

Please make sure you have your valid identification document (ID or Passport), a Proof of residence (a letter from utilities not more than three months old), and be prepared to take a selfie picture holding your ID and an A4-size paper written: “ AltCoin Trader Account Verification” with today’s date.

Once fully verified, your account profile should show and look something as follow:

You can check your security, Banking, Communication, and general account settings and make changes when necessary from the profile display.

Creating a Blockchain Wallet of your own:

Having a Blockchain Wallet is paramount for all active and enthusiasts of cryptocurrencies. It is the primary Wallet facility we strongly recommend for everyone for reasons such as impeccable security, reliability, and an option for backing up funds in hardware format and rich diversity of digital currencies it can hold.

  Open your browser

  Go to:

  Click on “Create a Free Wallet”


The following dialogue box will appear. Make sure you complete all the necessary information as requested:

Once successfully created, it will look something as follows:


Once you click the “Get Started” button, a verifiable e-mail will be sent to your e-mail. Go there. Open the e-mail. Verify it, and a legitimate process shall promptly commence.

At this point, you have arrived at the world of cryptocurrencies. You can buy, sell, make payments at any shop or to anyone using your blockchain wallet.

Have you managed to create your cryptocurrency account using any of your choice above or other options?

Cryptocurrencies & their Volatility: One feature well known to distinguish cryptocurrencies from fiat is their higher degree of volatility. That is, the market value of these currencies changes rapidly compared to traditional money. Such volatility has both advantages and disadvantages. When a coin has a slower rate of change or volatility, it represents the stability, security, and confidence of those who invest in it. So for those interested and looking for putting their money in safe heavens, their best bet is to go for fiat currencies or those cryptocurrencies with lower volatility. However, the downside of such stability, security, and confidence is slow or weak growth. In terms of monetary markets, slow-growth economies are associated with stability and more sense of security. However, fast-growing economies are associated with instability higher volatility but with either more gains or losses. It may be risky to put money in a highly volatile economy as one can lose hard or gain big.

Therefore, since most cryptocurrencies represent the axis of high volatility, they are meant for those investors interested in rapid growth or higher risk-takers prepared to make or break in such conditions. With a few days left in the countdown to the third Bitcoin halving on 22 May 2020, most cryptocurrencies go through some critical volatile roller-coaster moments. For example, the weekly trading chart below illustrates the volatility of Bitcoin versus the USDT between August 2017 and March 2020, where extremes of higher and lower price actions are visible. For experienced crypto traders, this is where real fortunes and wealth are invariably created, whether the currency is bullish or bearish. In the case of fiat currencies, as illustrated between weekly trade between the USDT and the Russian Ruble, between December 2019 and March 2020. As can be seen, there are no noticeable price actions except a single line of constancy and stability of price actions around $70s and $80 only throughout the period. In that way, what you put in is what you get out – secure, safe, but no gains or losses. Perhaps that explains why traders and investors are now migrating in numbers to the fertile grounds of cryptocurrencies.

Figure 2 Crypto Volatility


Figure 3 Fiat Volatility

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Some countries like Japan, Switzerland, and Venezuela are characterized as progressive in creating an enabling legislative environment for cryptocurrencies. Other countries may be regarded as heavily-handed in creating that open space for crypto usage. China, in Asia, is one such country where private cryptocurrencies are banned, except Bitcoin and a national digital currency belonging to the state. In Europe, the atmosphere is generally very friendly to the use of cryptocurrencies. Canada and the US already have legislation on collecting tax from crypto revenues. In that way, they can legitimize the commercial participation and usage of cryptocurrencies in their economies.

Other countries have a grey area or a blind spot to cryptocurrencies without any legislative pronouncement towards Initial Coin Offering, operation of cryptocurrency exchanges, or the mere existence of cryptocurrencies in their jurisdictions. This benign scenario leads to uncontrolled crypto activities nonetheless. One reality is that the current situation will keep on changing. The outlook is that many countries are heading towards promulgating laws to regulate cryptocurrencies in years to come, whereby key tokens like Bitcoin may continue to be regarded as legal tenders. Detailed reading about regulation can be found at Visual Capitalists ( or



Crypto Wallet:

A digital facility holding cryptocurrency for current transactions


The ability of a coin value to fluctuate up or down relative to other major currencies


Payments in exchange for goods delivered or services rendered


All cryptocurrencies that came after Bitcoin


All cryptocurrencies pegged to a primary fiat currency and whose value remains relatively stable to other


A trading platform with a legitimate right to exchange one cryptocurrency for another or one cryptocurrency for any fiat currency and vice versa

Initial Coin Offering:

A pre-launch announcement of the intention to present a particular coin into a market

Fiat currency:

Paper and centralized money not backed up by or securitized by any hard commodity like gold



In this Chapter, you learned to define a cryptocurrency as a deflationary and decentralized digital asset. Furthermore, you should be able to elaborate on how cryptocurrencies have evolved since 2008/9. Since the emergence of cryptocurrencies, Bitcoin remains the King of all cryptocurrencies by strength/value and market share. The Chapter further distinguishes altcoins as all those cryptocurrencies that came after Bitcoin. A typical feature of cryptocurrencies marked is the remarkable volatility of their market value. While this may be taken as a comparative advantage for those interested in trading and making wealth in the crypto space, stablecoins (coins pegged to a reserve currency or commodity) play a very significant role in hedging their volatility. With more than 3000 cryptocurrencies in circulation, exchanges play a critical role in facilitating transactions using cryptocurrencies. Of the more than 500 of them, Binance is the largest and most active global player. Acquisition of cryptocurrencies is made possible with the use of a variety of means, including the use of a Blockchain Wallet


Chapter 4


Exchange is the heart of any financial market. Like a heart, an exchange steadily pumps in and pumps out capital, money, insurance, commodities, derivatives, foreign currencies, and so forth. Like the heart’s left and right chambers, an exchange has two chambers too. One chamber is that of sellers whose job is to sell all sorts of financial products. The other chamber comprises buyers who create a steady demand for financial products coming into the market. You cannot have buyers alone without sellers, nor have sellers alone without buyers. When that happens, you have a heart attack, which we call a financial crash in financial terms. That also happens the day nothing is flowing in or out of the market.

Traditionally, a financial market has an exchange referred to as a Stock Exchange. You have the NSE (National Stock Exchange of India), the London Stock Exchange, New York Stock Exchange, Johannesburg Stock Exchange, Nasdaq Stock Market, Nigerian Stock Exchange, NSX (Namibia Stock Exchange), Abu Dhabi Securities Exchange, and hundreds of others around the world where a variety of commodities, currencies, securities, etc. are changing hands every second between buyers and suppliers. In the new world of crypto markets, the equivalent of stock exchanges is referred to as Exchanges. The purpose is the same, except that their exchange activities are not confined to one geographical location. They do not shut down for business, like between 5 PM and reopening the next day.

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Crypto Exchanges – What they Do

As already mentioned earlier in Chapter 3, there are more than 300 exchanges around the world, facilitating a market capitalization of over $300 billion at the time of writing. Therefore, this is not as simple a market as you would think. Like the cryptocurrencies they represent, exchanges have grown both in numbers as well as in complexity. Before we look at the various forms/types of exchange, we need to answer the question, ‘what do exchanges do’?

As mentioned in the opening paragraphs above, Exchanges provide an opportunity for ordinary people and corporations to meet and exchange one asset for another. You may have 2000 Etherium digital coins, and you may want to exchange them for Bitcoin tokens or vice versa. You may have some $20’000.00 in fiat money, and you may want to buy some cryptocurrencies such as Bitcoin or vice versa.

Furthermore, because of the volatility in most cryptocurrencies, an exchange helps protect their values by converting them to any stable coin of choice. You may have $7000.00 worth of Bitcoins and want to preserve the value of these digital assets by converting to a Stablecoin such as USDT, for example. The reverse is also possible with an exchange.

Lately, exchanges have started going beyond the fiat-crypto domain. They are now being used in exchanging traditional commodities such as gold, oil, silver, and others for either cryptocurrencies or even fiat. The converse is true too. So we can safely state that an exchange is a platform where wealth is created and similarly a platform where wealth can be lost if you are not careful in what you are exchanging. In summary, we can portray the four essential functions performed by exchanges with the following figure:

Lately, exchanges have started encroaching on unusual territories or exchanging fiat to fiat, traditionally a domain for stock markets. These kinds of overlaps may increasingly become unavoidable as more and more traditional financial markets seek to embrace crypto-based transactions and exchanges. We are more likely to see much of this as the world economy turns more and more digital. For example, on 9 April 2020, Coindesk reported that a Canadian Investment Manager, 3iQ bringing in a whopping US$14 million fund on the Toronto Stock Exchange as an Exchange-Traded Product (ETP) for those investors interested in adding Bitcoin (a crypto asset) to their investment portfolios. More of these are likely to be realized in days, months, and years to come.

There are three levels of trading provided mainly by exchanges. There is spot trading where a trader can simply buy or deposit cryptocurrency tokens. The trader places an order for a specified number of tokens. The order is captured on the exchange order book instantly. As you place the order for the chosen digital asset (Bitcoin, bitcoin, ethereum, Bitcoin Cash, etc.), the system usually gives the trader a choice to buy at the prevailing market price or select a threshold maximum or minimum buy. Once a limit is set, the system will wait for the set condition to prevail to execute the ordered buy. It might sound complicated, but it takes a few minutes of fidgeting around a trading platform to understand and master the art. Comprehensive details on trading are explained in Chapter 6 below. Once an order has been placed, the exchange will auto-execute when the right/preferred conditions occur. For example, in Fig 4, a $50.00 was set to buy Bitcoin at a spot price of $6600.00. In addition, the trader also instructed the exchange to stop buying Bitcoin if the price reaches and exceeds $6650.00. Once executed to the letter, the system will accept 0.007518BTC.

Figure 4 Placement of an Order to Buy Bitcoin

Another level of trading that some exchange platforms are offering is the margin trading option. Once again, more details are in Chapter 6. However, it helps to generally appreciate that margin trading refers to an offer of additional funds to its registered traders. This offer can be amplified three or five times the balance that the trader has. Such an offer is meant to give the trader more leverage to pitch their trading at a high-impact economy scale. However, margin trade comes with its risks. When traders close a deal at 3% profit, the margin trade amplifies the value by 3 or 5 times, depending on the level of risk a trader selects. The opposite is also true. If the trader loses by 3% on a deal, the loss is equally amplified by the allocated level of risk selected. In such events, the trader may have their account liquidated. Our advice here is that, although margin trading is very tempting, one has to horn their skills very well before venturing into it.

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Introduction To Blockchain & Cryptocurrencies
A Handbook For Beginners
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blockchain technology, industrial revolution, cryptocurrencies, crypto mining, FinTech
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Gurvy Kavei (Author), 2022, Introduction To Blockchain & Cryptocurrencies, Munich, GRIN Verlag,


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