Table of Contents

Chapter 1 - Introducing Cryptocurrency 1

Chapter 2 - What Is Crypto and How Does it Work? 4

Chapter 3 - The Different Types of Cryptocurrencies 10

Chapter 4 - How to Store Your Cryptocurrency Safely 13

Chapter 5 - How to Buy and Sell Cryptocurrency 19

Chapter 6 - How Does Cryptocurrency Mining Work? 27

Chapter 7 - Crypto Security and Regulation 32

Chapter 8 - Where Will Your Crypto Journey Take You? 36

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Chapter 1
Introducing Cryptocurrency
The arrival of cryptocurrency came at a poignant moment in time. As the world reeled from the
damaging effects of the 2008 financial crisis, an economic revolution was already underway.

Very little is known about the biggest name in crypto, Satoshi Nakamoto. But in October 2008,
Nakamoto laid out the terms for what we would come to know as “cryptocurrencies.” Digital
finance would never be the same again.

In Bitcoin’s whitepaper, titled “Bitcoin: A Peer-to-Peer Electronic Cash System,” Nakamoto

bemoaned the frailties of “trust-based” payment models imposed by financial institutions and
shared his robust calculations that demonstrate why Bitcoin may be a strong contender to
smooth the process.

It’s likely that even Nakamoto would’ve been unaware of the movement that he’d (or they)
started through the introduction of Bitcoin. What was deemed as “a purely peer-to-peer version
of electronic cash [that] would allow online payments to be sent directly from one party to
another without going through a financial institution” grew into an entire decentralized
economic ecosystem, and all signs indicate that we’re still only getting started.

Nakamoto’s vision was simple. Bitcoin would act as a decentralized unit of finance capable of
leveraging payments without the need for the user to place their trust in a third-party financial
institution. As 2008 saw the collapse of major financial institutions like Lehman Brothers, Bear
Stearns, and Washington Mutual Bank, Nakamoto’s vision was clearly set on bypassing
traditional banking with a peer-to-peer financial system.

Bitcoin would be used for financial transactions, whether they were payments or transfers,
without the need for any intermediary. Rather than storing your money in a bank, which is a
centralized entity that holds your wealth on your behalf, each Bitcoin would remain in the
hands of its owner, meaning that their wealth wouldn’t be at risk should a financial institution
collapse or suffer from a liquidity crisis.

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Source: Wikimedia Commons

Crucially, what Nakamoto was proposing would ultimately become known as a blockchain, a
distributed digital ledger network that would form the cornerstone of the sprawling
cryptocurrency landscape we know today.

Rather than verifying transactions through a financial institution, a blockchain would place the
power to broker transactions in the hands of the people via “nodes,” which is essentially a
device (usually a computer) that participates in a blockchain network—anyone can join the
network as a node. These nodes are located around the world and require a consensus to be
reached before a transaction is fully processed. Because they were distributed on a global
scale, a blockchain became virtually impossible for hackers to break into and edit its records to
steal money.

It’s clear that Satoshi Nakamoto had big ideas about how Bitcoin could transform the future of
finance, but whether he would’ve anticipated the rise of decentralized finance and the
emergence of thousands of cryptocurrencies like Ethereum, Dogecoin, and XRP off the back
of his creation is uncertain; the mysterious creator of crypto hasn’t been heard from since
December 2010.

In the years that followed Bitcoin’s launch, we’ve seen the cryptocurrency landscape grow to
unimaginable heights. Often written off by skeptics as a Ponzi scheme or “digital tulips,”
Bitcoin has evolved into a tangible store of wealth that saw the asset reach an all-time high
value of $69,044.77 USD in November 2021, representing an increase of 41,000% on its price
in June 2013. At its peak price, BTC had an estimated market capitalization of over $1.2
trillion, which aligns with the capitalization of some of the biggest companies in the world,
including Amazon and Alphabet.

Through this book, we will explore the rapid rise of cryptocurrency, how it’s created, why it’s so
valuable, and what’s still to come from arguably the world’s most rapidly appreciating assets
and fastest-growing financial ecosystem.

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Over the course of eight lessons, you will be provided with insightful information on what a
cryptocurrency is, the various forms they take, the safe storage of crypto assets, how to buy
and sell different coins, what to do to mine cryptocurrencies, and what regulatory and security
structures are in place.

Once you’ve completed all eight chapters, you will have a fluent understanding of how different
cryptocurrencies work, how to purchase and store your chosen crypto, what legalities and
regulatory frameworks concerning crypto apply to you, and how to mine cryptocurrencies.

So get ready and sit tight. You’re about to embark on a voyage through the world’s most
exciting and mysterious financial ecosystem.

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Chapter 2
What Is Crypto and How Does it Work?
To begin our journey, let’s explore the frameworks of cryptocurrency and why crypto is capable
of challenging the limitations of traditional finance.

What Is a Cryptocurrency?

The topic of cryptocurrency can become complex, but the core concept behind crypto is
simple: cryptocurrency is digital cash.

Although crypto doesn’t have a physical appearance like banknotes and coins, it still exists in
a very real way as digital entries in online databases. Although these databases take the form
of a collection of numbers and letters secured by cryptography (hence the name
cryptocurrency), they function in the same way as their more traditional counterparts.

Cryptography refers to the method of encoding and decoding information so that only the
relevant parties, with the right public and private keys, can read and process the information.

As Satoshi Nakamoto detailed in the 2008 Bitcoin whitepaper, this cryptography meant that it
was impossible for cryptocurrencies to fall victim to counterfeiting and double-spending within
the framework itself. However, it’s also important to note that cryptography doesn’t
automatically make your cryptocurrency portfolio immune to vulnerabilities, which we will cover
in chapters 4 and 7.

This cryptographical platform meant that many more cryptocurrencies could follow the path of
Bitcoin and launch with very different ambitions and goals. Through the limitless possibilities of
what cryptocurrencies can represent, we have a vibrant ecosystem populated with
peer-to-peer financial services like loans, insurance, and even NFTs.

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Ethereum, for instance, was developed to allow users to create, publish, and deploy
decentralized applications. Tether—the first stablecoin that is tied to the US dollar— however,
is designed to offer a safe digital asset that maintains its value over time, hence the name
stablecoin.

Through NFTs (non-fungible tokens), it’s possible to use cryptocurrency to buy, sell, and swap
digital art, collectibles, and other assets. In the age of the metaverse and Web3, users are
even capable of purchasing virtual land via crypto.

How Does a Cryptocurrency Work?

Virtually all cryptocurrencies use blockchain technology, a distributed digital ledger that
records and stores all transaction information across a vast network of nodes.

Although that previous sentence may be tricky to fathom for individuals new to the
cryptocurrency landscape, it’s important to understand what a blockchain actually is because
it’s the fundamental reason why crypto is such an important asset for the future of finance.

Source: Freepik

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As the image above shows, every time a transaction is made on a blockchain, it will record it to
the network, and reach a consensus among nodes, which is essentially an agreement
between devices in the network. The changes are recorded by adding a new block linked to
the previous transaction block, hence the “‘chain” aspect.

The reason a blockchain is viewed as a distributed ledger is because it operates as a

database that is shared among multiple devices. The blocks that form the ledger are stored in
chronological order.

The parties that share the information on a blockchain are called nodes. Each block will carry
different features, including the previous block’s hash and its own hash, which is a character
string used for security purposes. Each block must contain its own hash, but can also hold any
relevant information that the network’s developers could want, including smart contracts.

Every time you make a decision that involves moving crypto, the transaction will be
automatically added to the block. In many cases, the movement of these assets will be publicly
visible, providing a level of transparency that doesn’t exist in traditional finance.

For instance, with Bitcoin, you can see all transactions made. In the case of the famous
Wannacry ransomware attack, if you checked the address of their wallet, you’d be able to see
how much money they’ve blackmailed out of people.

What Are Public and Private Keys?

As we’ve already touched on, if you own any kind of cryptocurrency, the chances are that
you’ll have come across public and private keys, but what are they, and what do they do?

Public and private keys are fundamental pillars in the crypto landscape, and they ensure that
assets remain protected at all times from vulnerabilities.

Private Keys

When it comes to crypto, a private key is one of the most valuable pieces of data. It’s a string
of letters and numbers (essentially a password) you must keep secret. This actively works as a
passcode to your crypto and is required to broker transactions involving funds. The reason
they’re called “private” keys is that it’s information that should be kept private to the holder, as
it gives direct access to their crypto.

For many cryptocurrency holders, it’s common practice to store their private keys in a wallet,
but others store them physically (e.g., coded on a piece of paper and stored in a safe) without
having them recorded online or anywhere that could be compromised by cybercriminals.

In some cases, private keys are stored by a trusted third party. If you decide to use a custodial
cryptocurrency wallet, the wallet provider holds your private keys, which is convenient and

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easy to access. However, it’s also worth noting that this opens the doors to the dangers of
trusting centralized entities, like hacking, data-breaches, and bankruptcies.

Public Keys

Public keys can be seen or shared with any user on a blockchain. While these keys look the
same in appearance to private keys, they serve an entirely different purpose to their private
counterparts.

Although private keys work as a form of password for cryptocurrency holders, public keys
operate more like a bank account number or email address. They identify the account you
own, and they don’t put your cryptocurrency at risk when shared online because they can’t be
used to access or move funds.

Source: Wikimedia Commons (Example only! Do not scan the QR code!)

In the above image, we can see how both public and private keys are used to create a
physical Bitcoin wallet that can be used for sending and receiving BTC. While public and
private keys appear long and difficult to memorize, using QR codes can simplify the process of
setting up transactions.

That said, storing a paper wallet can also be risky. Make sure to store private and public keys
separately from each other. You could also get the paper laminated so it does not tear. You
could even create several copies of the wallet, each holding only part of the private key. This
way, only those who have all of the copies could gain access to the wallet.

It’s also important to avoid leaving online copies and PDF versions of the wallet on your
computer. Once someone has your public and private keys, they can access your account.

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How Cryptocurrencies Are Used

Because of the technology that drives blockchain, we’re seeing more use cases emerge for
cryptocurrencies. Many of these revolve around tokens linked to decentralized finance (DeFi)
and can relate to just about any tool of traditional finance which can be reimagined in digital
form. Let’s take a quick look at some different types of cryptocurrencies based on their
purpose.

Traditional Cryptocurrencies

Of course, there’s no actual need for cryptocurrencies to carry any further function than simply
acting as a store of wealth. Traditional cryptocurrencies can be bought, sold, and traded for
assets or goods like fiat currencies. Here, assets like Bitcoin take the form of a traditional
cryptocurrency.

Utility Tokens

Cryptocurrency utility tokens go beyond a store of value and can be issued as part of an initial
coin offering (ICO) when a company or project is seeking financial support For a startup to
raise capital, investors are offered an incentive in the form of a utility token if they aren’t given
a stake in the company itself. Basically, utility tokens allow users to perform specific actions on
a certain network (e.g., access to exclusive services). An ICO is often mistaken with IPO (Intial
Public Offering), which is when a privately held company goes public in order to sell its shares
to the public and raise capital. Though there are some similarities, IPOs and ICOs are
different.

Stablecoins

Stablecoins are blockchain-based cryptocurrencies like Bitcoin or Ethereum designed to hold a

consistent price over time. These assets are typically pegged to the value of fiat currencies like
the US dollar but can also be linked to other commodities like gold or petroleum.

Stablecoins are great for making international payments securely and 24/7. Unlike fiat
currencies, you could avoid hefty conversion rates and fees when using stablecoins
worldwide.

Security Tokens

Similarly to utility tokens, security tokens are often part of the ICO process of a new company
or project. However, unlike their utility counterparts, security tokens offer investors an actual
stake in a company and are generally proof that an investor owns part of a particular company
or endeavor.

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Privacy Coins

Cryptocurrency transactions recorded on blockchains are pseudo-anonymous because the

movements of assets are publicly recorded on distributed ledgers. As such, the structure of
some blockchains means that transactions aren’t 100% private.

This can be troublesome for investors keen to uphold the truly decentralized qualities of an
anonymous financial ecosystem. To address this issue, we’ve seen the emergence of privacy
coins like Monero, which make transactions entirely private.

Meme Coins

Experiencing a significant rise in popularity in 2021, meme coins are cryptocurrencies that
exist only as a “meme” or a joke. The most famous example is Dogecoin, which carries very
little functionality but has a dedicated following. Unlike Bitcoin, Dogecoin has an unlimited
supply of coins, which means it can inflate to any number.

It’s important to acknowledge meme coins because they’ve become so popular over the years
despite their lack of purpose. Recent attempts to emulate the popularity of Dogecoin in the
form of Shiba Inu have also brought some success. However, periods of high trading volumes
tend to occur during market bull runs when investors experience greater liquidity.

Understanding How Cryptocurrencies Work in Practice

Looking ahead to our next chapter, it’s time to take these core functions of cryptocurrencies
and to learn how they’ve paved the way for many different types of cryptocurrencies, how they
differ, and why two different cryptos can have vastly different values and market caps.

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Chapter 3
The Different Types of Cryptocurrencies
Now that we’ve explored what cryptocurrency is, it’s time to take a closer look at the many
different types of cryptocurrencies. In this chapter, you will learn what makes assets like
Bitcoin different from Ethereum, and why stablecoins and utility tokens must be regarded as
completely separate entities in the crypto landscape.

How Do Cryptocurrencies Differ?

There are many differences to consider when comparing cryptocurrencies, and many
fundamental variations between cryptos revolve around how they are produced and spent.

Some of the world’s largest cryptocurrencies, like Bitcoin, Litecoin, and Dogecoin, are
produced via a mining process called a “Proof-of-Work” (PoW) mechanism. Fundamentally,
Proof-of-Work involves utilizing very powerful computers to solve complex cryptographic
puzzles in order to be rewarded with coins.

Although PoW was a popular approach to producing cryptocurrencies among many of the
earlier coins, in recent years, we’ve seen a conscious shift to a more sustainable approach to
production: “Proof-of-Stake.”

The world’s most popular alternative cryptocurrency to Bitcoin, Ethereum underwent a “Merge”
in 2022 to switch to a Proof-of-Stake (PoS) model due to the environmental concerns
surrounding cryptocurrency mining.

Because of the complexity of the puzzles that miners must solve in order to access PoW
cryptocurrencies, the computational power needed to mine new coins has led to a sizeable
carbon footprint forming in the world of crypto that many of the biggest players in the space
are keen to address.

Other coins that operate on PoS algorithms include BNB, Solana, Cardano, and Polkadot. The
Proof-of-Stake model means that instead of mining, users can “stake” their coins to help verify
blockchain transactions, helping them to earn more currency and rewards as a result.

Variations in Supply

Another key difference to highlight is the varied supply of coins and their role in the
functionality and value of different assets.

Although many factors determine an asset's value, scarcity can play a major role. While
Bitcoin has a total supply of 21 million BTC and a circulating supply of around 19.3 million,
other assets like Dogecoin have a circulating supply of around 140 billion at the time of writing.

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This clarifies why BTC has retained a value of more than $10,000 since 2020, while DOGE
has never broken a value of $1.

Acceptance Plays a Role

When it comes to spending, different cryptocurrencies enjoy varied levels of acceptance

among merchants and service providers. As the world’s most well-known cryptocurrency,
Bitcoin is accepted throughout many venues worldwide. Live maps like CoinMap illustrate the
many physical locations that accept BTC as payment (e.g. shops, ATMs, and grocery stores).

Source: Coinmap (screenshot taken by Dmytro Spilka)

Daily use isn’t a priority for many cryptos, and it can be harder to make purchases using a
specific asset. Ether, for instance, is more widely recognized as a coin used to pay for services
based on Ethereum’s blockchain. But this isn’t the only difference between Ethereum and
Bitcoin.

How Bitcoin and Ethereum Differ

As the world’s first and second most popular cryptocurrencies in terms of market dominance,
it’s worth exploring the key differences between Bitcoin and Ethereum and why they’ve
become so popular for different reasons.

While we’ve already covered the different algorithms supporting both Bitcoin and Ethereum
and the more subtle differences in their functionality, there are more differences between the
two assets worth addressing.

Although both cryptocurrencies use a blockchain, their technical specifications are vastly
different. For example, Bitcoin’s older framework has made the cryptocurrency more popular

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as an investment tool akin to gold, while Ethereum’s currency, Ether, is popularly used to
power the Ethereum network and its many decentralized applications.

Crucially, Ethereum was designed to complement Bitcoin rather than stand as a competitor,
which is seen in how Ethereum operates more as a platform than a crypto asset.

It’s also important to note that Ether doesn’t have a maximum supply, which means that it’s
unlikely to ever compete with Bitcoin in terms of value-per-coin. However, Ethereum’s network
launched six years after Bitcoin in 2015 and is considerably more advanced. This means that
transactions are faster on Ethereum’s blockchain than Bitcoin, and although ETH transactions
require “gas fees," they can be considerably cheaper than that of Bitcoin.

It’s worth mentioning that Bitcoin has something called halving. This is when the reward for
mining is cut in halve for those that validate transactions, thereby lowering the new supply.
Ethereum, on the other hand, practices coin bruns, which essentially means the removal of
coins from circulation.

Key Variations Between Popular Cryptocurrencies

At present, no cryptocurrency comes close to Bitcoin in terms of market capitalization, and

BTC’s popularity has been a driving force behind the coin’s impressive all-time high values
during the crypto bull markets.

Source: CoinMarketCap (screenshot taken by Dmytro Spilka)

Looking at the largest assets by market capitalization presents a great example of some of the
landscape’s strongest and most varied coins.

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Bitcoin’s dominance rarely falls below 40% throughout the entire market, which is why it’s
viewed as a leading store of value. Whereas Ethereum’s role as the world’s favorite altcoin
makes it a modern and highly functional cryptocurrency for users to utilize the many
decentralized apps (DApps) throughout Ethereum’s network.

Stablecoins

Also among the world’s largest cryptocurrencies by market capitalization are Tether and USD
Coin, which are stablecoins with their values pegged to the US dollar. This means the coins
are designed to retain their value at $1 regardless of wider market volatility.

Stablecoins are unlike any other cryptocurrencies because they’re directly linked to centralized
assets as a way of remaining stabilized amidst even the harshest of market conditions.

Stablecoins are great for quick, international payments at any time of the day. Unlike traditional
(i.e. fiat) currencies, you could avoid hefty fees when using stablecoins worldwide.

Exchange Native Coins

Another coin that’s grown into one of the most popular in the cryptocurrency market is BNB
Coin, the native cryptocurrency for the Binance crypto exchange.

As the world’s largest cryptocurrency exchange, the use of BNB Coin has soared in recent
years, with traders using the asset in the trading pairs that provide access to a wider range of
cryptocurrencies as well as to pay transaction fees on Binance at a discounted rate.

BNB is also used by many decentralized exchanges (DEX) to initiate trades, making the native
coin a great asset for investors on the hunt for the next great market opportunity.

Familiarizing Yourself With Different Cryptocurrencies

Before you buy a cryptocurrency, it’s worth spending time researching your chosen coin to
better understand how it works, its purpose, and its circulation.

Although many factors help coins present themselves as strong investment opportunities, their
different roles can go some way in informing investors about their future prospects.

You should always consider how coins are minted, whether they have a capped circulation,
and the purpose they serve if you’re seeking to add new cryptocurrencies to your portfolio. In
such a diverse crypto landscape, this information can go a long way in building a more
intelligent investment strategy.

In the next chapter, you’ll learn how to safely store your cryptocurrency, along with the
advantages and disadvantages of different types of crypto wallets.

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Chapter 4
How to Store Your Cryptocurrency Safely
Before we explore the many ways that you can buy cryptocurrencies, it’s best to first cover
how to store crypto safely. Ensuring that your crypto assets are stored in a secure manner in a
trusted wallet can be crucial regardless of whether you’re planning on investing, trading, or
spending cryptocurrency.

What Is a Cryptocurrency Wallet?

Cryptocurrency wallets come in a variety of shapes and sizes and are primarily designed to
keep your private keys, which provide access to your crypto holdings, both safe and easy to
access.

By using an encrypted digital wallet, you can send and receive cryptocurrencies like Bitcoin
quickly and efficiently. These wallets can also come as embedded web applications, built into
exchanges, external offline hardware, or even as a piece of paper.

One key distinction to make at this stage is that you shouldn’t think of crypto wallets in the
same way as traditional wallets in which you keep your money. Technically speaking, crypto
wallets don’t actually hold crypto. Instead, it stores the private keys that prove your ownership
of cryptocurrency on the blockchain. Similarly to Apple Pay and Samsung Pay, rather than
storing your funds, they simply enable the use of the funds that are held by your bank.

It’s for this reason that you must always keep your crypto wallets safe and secure at all times.
By cutting corners and using an untrusted wallet provider, or by leaving your hardware wallet
in a vulnerable place, you risk losing access to all of your crypto.

What Different Types of Cryptocurrency Wallets Are There?

There are many different types of cryptocurrency wallets. For instance, hot wallets remain
perpetually online, while cold wallets bring additional safety by taking your crypto offline and
away from hackers.

Wallets can also come in different forms, and paper wallets can be used as simple QR codes
printed onto a piece of paper that can be scanned to store and send cryptocurrency.

It can be easy to create a paper wallet, and the approach became popular among
cryptocurrency investors in the early 2010s. The process worked by physically printing private
and public keys onto a piece of paper or card and using them to carry out transactions. The
paper would contain two alphanumeric codes and two randomly generated QR codes.

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It’s important to keep in mind the risks involved with physical wallets (e.g. loss, fire, theft and
flooding).

However, in recent years, more cryptocurrency holders have opted to keep their holdings
online, thanks to improving levels of security and functionality offered by major crypto
exchanges like Coinbase and Binance. Exchanged-based crypto wallets are generally classed
as “hot wallets”, which are essentially wallets that can be accessed online. There are many
pros and cons to hot wallets, which we’ll cover in the next section.

In addition to this, dedicated online wallet providers like MetaMask and Trust Wallet have built
a strong following. You can learn more about MetaMask here, and you can learn more about
Trust Wallet here. Furthermore,

Despite this, there’s still a significant market for “cold wallets,” which securely take private keys
offline via the use of a flash-drive-like device.

Source: Unsplash

Cold wallets can be a great way for investors to securely store their private cryptocurrency
keys offline, which can help to ensure that large quantities of high-value crypto remain
untouchable by cyber criminals.

However, because their holdings are kept offline, users would be unable to leverage
transactions or trades until their funds are moved back online. This means that the approach is
most likely to benefit long-term holders of crypto.

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The Pros and Cons of Software Wallets

There are many reasons why investors are drawn to software wallets like Exodus, Trust
Wallet, and MetaMask. These internet-connected wallets help users to access their crypto
directly from their desktop, mobile, or browser extension without having to keep them in the
hands of centralized exchanges or manually connect hardware wallets.

Furthermore, these wallets tend to be far easier to use for casual crypto investors and easy to
move across different exchanges, trading platforms, and other ‘hot’ wallets.

However, the key drawback of these wallets revolve around security. Being perpetually online
means that it’s possible for hackers to access the contents of software wallets through a
number of nefarious tactics.

The Pros and Cons of Hot Wallets

Cryptocurrency hot wallets refer to wallets that store crypto online at all times. Although these
are the most popular form of wallet, they’re also the most risky.

Because your private key is stored on your provider’s server, it will be more vulnerable to
hackers. Some wallets that operate on exchanges can also be particularly at risk of hackers
breaking into an exchange to steal cryptocurrency. In addition, you’re not in full control of your
keys, which means you could potentially lose access to your funds.

Despite this, hot wallets are highly functional and easy to use. For users who are interested in
sending and trading cryptocurrencies regularly, these online wallets can be a strong option.
However, it’s advisable that only investors who hold a relatively small amount of crypto use hot
wallets. For those seeking to invest a significant amount into crypto, a cold wallet is a far safer
option.

The Pros and Cons of Cold Wallets

Hardware cold wallets are considerably safer than perpetually online wallets that can be
accessed via web apps and crypto exchanges.

However, it’s important to note that cold wallets can be expensive, with some models costing
hundreds of dollars. Furthermore, your cold wallets are only as secure as you make them.
Because they’re physical devices, they could be easier to misplace and lose over time, making
them far more hazardous to hold.

The biggest disadvantage of cold wallets is that they’re very inconvenient to use for
cryptocurrency investors looking to continually use, transfer, and spend their crypto.

This would involve continually connecting your cold wallets to bring them online and access
your holdings. With this in mind, it’s advisable for investors who are planning to store high
quantities of crypto over long time frames to keep their assets in a cold wallet.
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What Type of Wallet is Best for Me?

The type of crypto wallet that suits users best will depend on their goals. For long-term
investors interested in holding significant amounts of cryptocurrency in their wallets, a cold
wallet will be safer and more secure than other options. For others who would rather have their
cryptocurrencies online to trade, buy, and sell, a trusted hot wallet could be more effective.

There are many leading brands associated with cold wallets, and Trezor is a leading name in
the market. However, it’s always a good idea to analyze customer reviews in this regard. For
hot wallets, there are many options. While built-in exchange wallets like Coinbase Wallet can
be a functional option, many users opt to send their cryptocurrency to wallets like Metamask
and TrustWallet for their functionality.

As with anything in crypto, be sure to do your research before choosing a wallet.

Adopt an Approach that Matches Your Goals

When it comes to storing your cryptocurrency, there’s no right or wrong way to keep your
crypto safe. Although cold storage is ideal for keeping coins offline and away from hackers, it’s
little use if you’re interested in trading your assets, or if you’re only prepared to invest relatively
small volumes in coins.

It’s also worth bearing in mind that cold storage is only as effective as its physical storage
space. If you’re concerned that your crypto may be misplaced, or that you don’t have a safe
space that’s completely private, it may not be worth using hardware.

As a rule of thumb, if you plan to be a more active investor that exchanges crypto and
continues to shape their portfolio, it’s likely that hot wallets built into cryptocurrency exchanges
will be perfectly suitable. However, a little research can go a long way, and taking the time to
assess the security of your chosen wallet can pay dividends in helping to prevent future
losses.

Now that you know how to safely store cryptocurrency, let’s explore how to buy and sell your
crypto.

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Chapter 5
How to Buy and Sell Cryptocurrency
Let’s take a deeper look at how to buy and sell cryptocurrency. The most popular way to
purchase and sell cryptocurrency for domestic currency is via trusted exchanges.

There are many cryptocurrency exchanges out there. While some offer hybrid functionality
alongside traditional stocks like Robinhood, others like Binance and Coinbase exclusively
focus on crypto.

Although the crypto landscape has a problematic history with the security of assets held within
exchanges with the 2014 hacking of Mt. Gox and the collapse of FTX in 2022, it can be worth
looking at reputable exchanges like Binance and the NASDAQ-listed Coinbase. We will cover
some of the most reputable cryptocurrency exchanges a little later on in this chapter.

Crypto exchanges work by enabling the purchase of cryptocurrency through fiat transactions.
This means you can exchange your money for crypto using a debit or credit card.

Most crypto exchanges also have embedded cryptocurrency wallets, which means that the
assets you buy will be automatically ready to hold, transfer, or sell in its own “hot,” or online,
wallet. Transfer and withdrawal fees largely depend on the exchange itself, hence you should
always check with your exchange before making the transfer/withdrawal.

While exchanges can display the value of crypto, it’s worth consulting external platforms like
CoinGecko to gain a better understanding of the price movements of assets before making a
purchase.

Source: CoinGecko
Doing this can help users to better understand the value they’re getting from listed
cryptocurrency prices on exchanges.

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3 Trusted Cryptocurrency Exchanges by Size

The list below is largely based on daily trading volumes and does not represent future
performance. You should always do your own research before registering with any crypto
exchanges. Although most exchanges would have an extensive list of cryptocurrencies to
invest in, make sure to carry out your own due diligence.

1. Binance

Binance is the world’s largest crypto exchange in terms of both trading volume and liquidity,
meaning that it can be a popular choice among investors.

With a relatively large number of cryptocurrencies and fiat currencies supported, as well as a
“Binance Lite” user interface that simplifies the volume of metrics and insights available to
users, the platform is relatively user-friendly.

2. Coinbase

Another popular option is Coinbase, which is a NASDAQ-listed company and thus better
positioned to bring more trust to its user base.

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Although Coinbase’s trading volume is far lower than Binance at around $775 million traded on
a 24-hour basis at the time of writing, the platform is highly accessible and the buying and
selling of assets can be considerably more straightforward than that of Binance, which can
involve locating third-party buyers.

However, one of the more negative aspects of Coinbase is that withdrawal fees and
conversion rates can be relatively high in comparison to other exchanges.

3. Kraken

Another user-friendly exchange is Kraken, which features fair levels of trading volumes and
over 1 million weekly visits from users.

With more than 220 cryptocurrencies supported and high levels of liquidity, Kraken weighs in
as another relatively trustworthy option for investors to get to grips with the crypto market.

However, the exchange has reportedly encountered users who have experienced hacks, and
associated fees on the exchange can sometimes run high.

Purchasing Crypto: Step-by-Step Guide

Using Coinbase as an example, let’s now look at how we can purchase cryptocurrency via a
crypto exchange.

1. Create an Account

This step can vary in complexity due to KYC commitments of exchanges. In registering for
Coinbase, users are required to send an image of a form of identification before the buying
and selling of cryptocurrency can begin.

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 2. Add Your Payment Method

Next up, it’s time to add your preferred payment method. As we can see from the screenshot
below, Coinbase (along with many other exchanges) accepts credit/debit cards, bank
transfers, PayPal, and other bank account transactions depending on your geographical
location.

3. Set Up Your Purchase

Coinbase allows you to set up a purchase by selecting the Buy & Sell button at the top of your
screen, which is displayed as a bright blue button.

As part of this process, Coinbase will allow you to make a quick purchase of a pre-determined
amount. It’s even possible to set up recurring payments on specific days, or on a weekly or
monthly basis.

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 4. Select the Asset that You Want to Buy

After you’ve set up your purchase, you’ll need to choose the cryptocurrency that you want to
purchase. Coinbase naturally populates this option with Bitcoin, which is the world’s most
popular crypto asset, however, the dropdown list of options also features other popular
cryptocurrencies.

The dropdown list also has a search bar which means you can type out the name of the coin
that you’re looking to buy in order to locate it quicker.

5. Click Buy to Complete the Purchase

Finally, you can click Buy to complete the purchase.

Completing your first crypto purchase can seem overwhelming, but most exchanges have
extensive help portals to aid any areas that may become an issue for new users.

Prioritizing Comfort and Security

If, when purchasing cryptocurrency on an exchange, you ever feel uncomfortable about the
process, it’s probably best that you reconsider your decision.

While there are certainly some exchanges that offer better functionality, trading pairs, and
security than others, many investors blend personal preference with security when it comes to
picking their default exchange.

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By spending some time looking into some of the most trusted exchanges on the market, or by
purchasing a small amount of crypto on different exchanges, you can gain a stronger idea of
what works for you and can buy and sell your crypto with confidence.

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Chapter 6
How Does Cryptocurrency Mining Work?
For many cryptocurrencies that operate on a proof-of-work basis, miners are used to mint new
coins and add the cryptocurrency to the blockchain. This can be a strong inflation-proof means
of managing cryptocurrencies by introducing new coins over time. Cryptocurrencies, unlike
banks, do not have centralized systems and teams that review the legitimacy of transactions.
Instead, to make sure that the same cryptocurrency isn’t spent multiple times, there’s a
network of participants (miners) that solve complex puzzles to verify transactions. Once the
first participant verifies the transaction, it then needs to be verified by other participants. Only
then the miner gets rewarded with cryptocurrency.

While anyone can become a cryptocurrency miner, the process requires an extraordinary level
of computational power that’s likely to come at a high entry cost for those looking to embrace
mining. However, others who have bought into mining have found some success from mining.
With this in mind, let’s take a deeper look at cryptocurrency mining and what the process
actually involves:

What Is Cryptocurrency Mining?

The first thing to clarify when it comes to cryptocurrency mining is that it doesn’t actually
involve any form of mining as we traditionally know it.

Cryptocurrencies come in many different forms, and the generation of new coins can often be
managed on a proof-of-work, or proof-of-stake basis. While proof-of-stake mechanisms
revolve around consensus algorithms, proof-of-work is based on “mining” assets by solving
complex mathematical equations. That said, both mechanisms are based on consensus.

What do these mathematical equations consist of? VMware cryptography researcher,

Avishay Yanay, has likened the puzzles that miners must overcome in cryptocurrency mining
to a fingerprint.

“Imagine that you are given a fingerprint sample and you are asked to discover the height,
weight and overall look of the person to whom this fingerprint belongs,” Yanay explained in his
analogy.

Doing this requires significant computational power, and cryptocurrency mining firms invest
heavily in hardware to cope with these complex equations.

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Source: Unsplash

In terms of entry cost and energy costs, getting set up in mining cryptocurrency can be
extremely expensive, so what can crypto miners expect to achieve in terms of rewards for
completing puzzles?

What Cryptocurrencies Can be Mined?

Many of those interested in entering the cryptocurrency mining landscape are likely to be
thinking of Bitcoin when they take their first steps into the industry. This is understandable, as
Bitcoin is the world’s most popular asset and possesses the single largest market
capitalization in the industry by some margin.

But Bitcoin mining can be an extremely costly challenge with no guarantee of reward. This is
because BTC can only be awarded to the miners who solve the cryptographic hash puzzles
presented to them, and with many different sets of expensive hardware competing for coins, it
can be especially difficult.

Furthermore, Bitcoin features a pre-programmed halving cycle which actively halves the
volume of BTC awarded to miners approximately every four years. This helps to preserve the
coin’s scarcity and was most recently halved from a payout of 12.5 BTC to 6.25 BTC for
miners completing puzzles.

By 2024, Bitcoin will halve again, cutting the reward down to 3.125 BTC for miners. This
represents a significant drop from the initial payout of 50 BTC to miners, though Bitcoin’s

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impressive price rallies have helped to maintain a relatively consistent value of rewards over
time.

Other coins, like Monero, Litecoin, Ethereum Classic, and Dogecoin can also be mined due to
their proof-of-work mechanism and may represent better opportunities for miners to gain a
steady income for their efforts by simply mining from home.

Why Can’t All Cryptocurrencies be Mined?

Today, we’re seeing more cryptocurrencies move away from proof-of-work mining and towards
a proof-of-stake mechanism. This includes assets like Ethereum, BNB, Polkadot, Cardano,
and Avalanche, and the approach is generally regarded as a more sustainable means of
generating cryptocurrencies.

Rather than relying on costly machinery that requires vast quantities of power to solve
equations, proof-of-stake cryptocurrencies allow coin holders to stake their crypto as collateral
for the opportunity to validate blocks and earn rewards.

These validators are selected randomly to confirm transactions and validate block information,
and rather than competing with one another, the algorithm randomizes who can collect fees for
their staking.

Instead of utilizing expensive processors to mine crypto, validators simply stake a specific
amount of coins to aid the algorithm. For instance, Ethereum requires 32 ETH to be staked by
holders in order for them to become validators.

Why Does Crypto Mining Use So Much Power?

To mine cryptocurrency, miners must verify transactions using complex mathematical

equations. This can require masses of computational power, and miners compete to solve the
same puzzle first to access the freshly minted crypto.

This means that to compete, miners must buy extremely powerful machinery in order to solve
puzzles ahead of their fellow competitors.

To quantify the sheer level of power required to mine Bitcoin, for instance, involves 12 trillion
times more computing power in 2019 in comparison to the first blocks mined by Bitcoin back in
early 2009.

While a home computer would’ve been enough to participate in mining back in the early days
of crypto, the process is far more complex today. Nowadays, ASIC miners are used for mining
particular cryptocurrencies. Essentially, ASIC miner is a device specifically designed for mining
crypto—they are effective yet fairly expensive.

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According to Bankrate statistics, creating mining Bitcoin consumes 121 terawatt-hours of
electricity each year, which is more than what is used by the Netherlands and the Philippines
over the same time frame. Furthermore, it would take the average household nine years to
mine a single Bitcoin.

Is it Worth Getting Into Cryptocurrency Mining?

So, is it actually worth getting into mining cryptocurrencies like Bitcoin? Sadly, the answer is
that there are simply too many variables to say for certain. Should expensive entry and energy
costs not be too much of an issue, cryptocurrency mining could be a profitable endeavor.

That said, the energy costs alone for mining a single Bitcoin, should a miner be resourceful
enough to fend off their competitors, would cost over $10,000 in the United States, and
$18,000 in the United Kingdom. It’s for this reason that we’re accustomed to seeing miners set
up bases in cheaper nations like Kuwait and Kazakhstan, where energy cost-per-Bitcoin is
considerably lower.

On top of this, it’s also necessary to purchase hardware that will be capable of mining
cryptocurrency. While ASIC mining rigs can cost $1,500 per computer, creating a competitive
Bitcoin mining rig can run up costs that range into tens of thousands of dollars.

However, it is possible for users to mine crypto more effectively by joining a Bitcoin mining
pool. This empowers miners to pool together their resources to compete more efficiently in
earning cryptocurrency rewards for their efforts. But once again, this method comes with no
guarantee of profitability.

Matching Mining With Personal Goals

Whether getting into cryptocurrency mining is right for you depends wholly on your goals and
ambitions for crypto.

If you’re ready to invest heavily, mining valuable assets like Bitcoin and Litecoin can yield
plenty of revenue over time. If, however, you’re unsure about mining, it may be worth testing
the waters in a mining pool or seeking alternative approaches to investing in cryptocurrencies.

Whether cryptocurrency mining hardware and the cost of energy become more efficient in
producing more proof-of-work cryptocurrencies in the future remains to be seen. But for now,
the challenge of generating enough crypto to sustain mining efforts can be a tricky balancing
act for many individual miners.

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Chapter 7
Crypto Security and Regulation
Naturally, with so much money flowing through Bitcoin and other cryptocurrencies, there are
plenty of security risks associated with holding crypto. For many cybercriminals, there’s no
better opportunity to make money through illegitimate means than to launch crypto scams that
prey on unsuspecting or inexperienced users.

While there are certainly cases of crypto exchanges being hacked and ponzi or rug-pull scams
involving small-cap coins, the most common form of crypto scam involves a phishing attempt.
Although crypto is generally secure when it comes to privacy, phishing scams that promote fun
software to animate NFTs, or too-good-to-be-true crypto exchange rates, or fake competitions
can be a leading way of losing out on your assets.

Although many of the biggest cryptocurrency exchange hacks took place in the last decade
while the cryptocurrency ecosystem was still maturing, it’s still not uncommon to see hackers
exploit some exchanges or projects. For instance, in 2022 a hacker stole $625 million from
Ronin Network, which was a subset of a blockchain used to support the NFT-based game Axie
Infinity.

When storing your cryptocurrency funds online, using major exchanges with a good reputation
and strong security is the best approach. However, following a 2019 security incident on
Binance, the world’s most widely used exchange, in which $40 million in BTC was stolen by
hackers, it remains clear that the only way to ensure your crypto is safe at all times is by
storing it offline in a cold wallet.

Is Crypto Actually Legal?

The matter of the legality of crypto generally depends on your geographical location. In most
cases, cryptocurrency is completely legal to buy and hold, though taxation laws may come into
play if you make a significant profit from trading your assets.

In nations like China, Saudi Arabia, and Qatar, cryptocurrency is banned in its entirety, while
implicit bans have been put in place throughout nations like Cameroon, Central African
Republic, Gabon, Guyana, Lesotho, Libya, and Zimbabwe.

Could Cryptocurrency Be Banned?

In short, there are no guarantees that circumstances won’t cause regulatory bodies to ban
cryptocurrencies like Bitcoin.

The matter of regulation and crypto has been a major topic across many nations, and although
perspectives on the legal future of cryptocurrencies can be highly divisive throughout different

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governmental bodies around the world, it seems more likely that the cryptocurrency industry
will be allowed to continue its impressive growth.

To expand on the prospect of cryptocurrency being banned, the Biden administration in the
United States drew criticism in early 2023 for its “crypto roadmap,” which commentators
likened to an attempt to “quietly ban” the likes of Bitcoin.

However, this roadmap was created in the wake of a cryptocurrency bear market which saw
the value of assets plummet. Now, as the total cryptocurrency market capitalization continues
to rise from lows of under $800 billion to an industry worth significantly more than $1 trillion,
the prospect of banning such a large market will become less likely.

Source: CoinMarketCap (Screenshot by Dmytro Spilka)

It’s for this reason that the future of crypto will lie firmly in the hands of institutions, which have
the power to grow the market and provide more stability for investors and regulators alike.

Elsewhere, nations like France have been more welcoming to cryptocurrencies, and have
even considered fast-tracking firms to become compliant with new EU regulations.

However, future complications may emerge in the form of central bank digital currencies
(CBDCs).

Some regulatory bodies have been so fixated on crypto that they’re in the process of creating
their own CDBCs, which would operate in a similar way to stablecoins like Tether in most
cases. These may cause cryptocurrencies fresh challenges in the coming years, or they could
drive more levels of crypto acceptance among mainstream users.

How to Identify Cryptocurrency Scams

Keeping vigilant in the face of scams is an important measure for cryptocurrency investors to
take. Scammers continually change tactics, so even the most experienced cryptocurrency
users can fall victim to new approaches.
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Although it’s difficult to anticipate what the next trends in cryptocurrency scams will look like,
here are a few general rules to follow in order to keep your funds as safe as possible at all
times:

1. Keep Away from Ads that Promise the World

During a cryptocurrency bull market, it’s common for scammers to piggyback on appreciating
assets by creating scam promotions for bogus coins or investments that promise to make a
1,000% ROI for investors. These may well prove to be Ponzi schemes where scammers plan
to onboard investors before pulling their shares.

In a market as volatile as crypto, there’s no such thing as an investment that’s guaranteed to

make major returns, and all unfamiliar projects or assets should be heavily researched before
you decide to invest significant amounts of money.

2. Be Wary of #Ads

The legality of cryptocurrency promotions and influencer campaigns has been a cause for
concern for many regulators. Even major celebrities like Kim Kardashian have been criticized
for participating in crypto marketing campaigns that may have been misleading to her social
media followers.

As a rule of thumb, if you come across a social media post from an influencer about a
cryptocurrency that contains the hashtag #Ad, be mindful that the content itself will often be
purely marketing material, and won’t contain the opinions or thoughts of the influencer
themselves.

3. Watch Out for Non-Existent Teams

When researching a new project, it’s always worth checking to see who is actually in charge,
including every member of their team.

Here, you can research them and their backgrounds before choosing to believe that their
cryptocurrency can perform to your expectations. If there’s no information about the team
behind a project, it’s best to keep wary.

4. Look for a Whitepaper

Every cryptocurrency should have a whitepaper. This will be a document that tells you exactly
how the cryptocurrency project has been designed, how it intends to grow, and how it will fund
itself.

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If you can’t find a whitepaper or its content doesn’t make sense to you, it’s best to pass on
investing in the project.

5. Never Log Into Your Wallet From Untrustworthy Links

Blockchain frameworks in crypto mean that it’s very difficult for hackers to access your funds
or NFTs, but their job can be made easier if they have access to your information. For this
reason, you should never log into your wallet if you’ve been prompted to from an unverified
link. This goes for embedded website links or email links.

Although it can be difficult to keep track of the attempts of scammers to steal your crypto,
remember to trust your instincts at all times. If something doesn’t seem quite right, don’t
proceed with a transaction or login.

Keeping Vigilant Is a Sad Reality for Crypto Investors

Sadly, the high values associated with the cryptocurrency market will always make it a target
for scammers and hackers. This means crypto users need to remain vigilant at all times. If
something doesn’t look right, it’s probably best that you stop what you’re doing.

Try to avoid clicking embedded links that ask you to access your wallet, and be sure to always
check that your connection is secure to websites that you use your crypto on.

Fortunately, the levels of security within the cryptocurrency market are growing each year, and
this means that attacks on exchanges are becoming less frequent. With this in mind, as long
as you’re cautious around possible scam attempts, you’re likely to keep your crypto safe.

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Chapter 8
Where Will Your Crypto Journey Take You?
At this stage, it’s worth reiterating core points surrounding the cryptocurrency market, buying
and selling crypto, security measures, and privacy risks. Let’s also use this time to explore
what the future holds for the cryptocurrency landscape, and what could be next for the
industry.

Cryptocurrencies are a form of digital currency that commonly operate on distributed digital
ledgers known as a blockchain. This is an essential component in creating a decentralized
ecosystem in which cryptos can operate outside of traditional financial boundaries that require
central banks and costly intermediaries.

It’s common for users to use a cryptocurrency exchange to buy and sell crypto, but matters
surrounding the storage of coins can be more varied. Although hot wallets that are perpetually
online are often used for storing smaller amounts of crypto, not even the world’s most popular
exchanges can guarantee against hackers. In many cases, it’s worth investing in a cold wallet
to store larger quantities of crypto offline and out of the reach of hackers.

While cryptocurrency can be mined, it’s important to assess the associated costs of hardware
and power in your local area before committing to crypto mining. It may also be more fruitful to
join a mining pool for the best results.

Likewise, it’s essential that crypto users remain vigilant about the prospect of encountering
scammers, and investment decisions should only be made after sufficient due diligence and
research are carried out. If you see an influencer or project promising you the world, it’s likely
to be a scam.

The legality surrounding cryptocurrencies is also relatively fluid, so it’s worth keeping up to
date regarding regulatory changes.

The Future of Crypto

We’ve become accustomed to hearing that cryptocurrency is operating within a bubble and
that we are often told Bitcoin is "digital tulips," but the reality is that cryptocurrency has a
valuable role to play in the development of an exciting technological landscape.

In a world that’s undergoing significant digital transformation, cryptocurrencies stand as an

advanced, borderless, and low-cost solution for modern financial frameworks.

As the age of the metaverse and other Web3 applications emerges, we’re likely to see even
more use cases grow within the cryptocurrency industry. This will invariably bring more
institutional adoption to the landscape and more market stability, which can ease the concerns
of regulators around the world.

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Although nothing is guaranteed in the world of cryptocurrency, and your investments can very
much go down as well as up, there is little doubt that crypto is an innovation that still has
plenty of potential on the world stage.

Further Reading

For further reading, it’s also worth adding some educational links here about the basics of
cryptocurrency from some of the most trustworthy online resources:

● MakeUseOf Cryptocurrency Section - A great collection of articles for those

looking to get started with crypto.
● Binance Academy - An academy platform created by one of the biggest crypto
exchanges in the world.
● Coinbase Learn - A great resources for beginner, intermediate and advanced crypto
investors alike.
● Learn Crypto - A free crypto education platform designed specifically to help users
easily learn about cryptocurrency, with engaging content.
● EDX Crypto Tutorials- A useful collection of cryptocurrency courses that can help
users learn more about crypto.

Taking Your Next Steps in Crypto

Now you’ve completed our chapters, it’s time to take your next steps in crypto. Whether you’re
planning to invest, trade, mine, or simply continue your education on the wide and varied world
of cryptocurrencies, remember to always research before making a decision and to keep wary
of scammers.

While we can’t be certain of what tomorrow will hold for the cryptocurrency landscape, we
have full control over the coins that we can manage today. So take the time you need to find
exchanges and wallets that suit your needs and acquaint yourself with the processes that you
plan on using. To get the best out of crypto, it’s essential that you’re confident and familiar with
your strategy.

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