CHAPTER 6

How Crypto Markets Work: Blockchains, Exchanges and Custody

From mining to wallets

Opening question

“Where is my bitcoin actually kept, and who can take it?”

In this chapter

What a blockchain is and how it records ownership
Proof of work and proof of stake: how networks agree on the ledger
Transactions, fees and settlement finality, with a worked fee example
Centralised exchanges and how their order books work
Liquidity and slippage, with a worked example
Decentralised exchanges and the trade-offs they bring
Private keys, wallets and the choice between self-custody and custodians
Market structure, security failures and practical safety rules, seen from Vietnam

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This chapter is in the full book

Chapter 1 is free to read online. The full text of chapter 6 — with its tables, figures, worked examples and practice lab — is available in the complete edition of Forex and Crypto Investing: From Theory to Practice (Volume 3, NXW Investment Library).

Read Chapter 1 free Get the full book — contact@nxw.vn

Sections of this chapter

6.1 A shared ledger

6.2 Proof of work and proof of stake

6.3 Transactions, fees and finality

6.4 Centralised exchanges

6.5 Order books, liquidity and slippage

6.6 Decentralised exchanges

6.7 Keys, wallets and custody

6.8 A market that never closes

6.9 Hacks, failures and safety rules

6.10 Crypto markets seen from Vietnam

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