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Connect With Your Management On-The-Go

In collaboration with Simal Celikkol

Edited By Mehmet Naci Efe

A challenging journey for managers to succeed by following 13 paths… Visionary and curious academicians sailing to new horizons…Yes! The journey is long, tiring but how success is easily achieved? There is no change without pain! Management on the Go covers different aspects of today’s management which can be both used as a handbook by executives who want to keep up with the pace of scientific advancements, as well as a road map for academics to turn towards innovative management systems.

You are invited to embark on a journey from topics that have become outdated in the literature to approaches that will arouse excitement and curiosity about future. Each chapter is written based on sector experiences by 13 academicians located in 5 different universities in Turkey and now reaches you dear readers.

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Chapter 9 Digital Currency Risk Management: Hakan BAL


Hakan BAL

Digital currency can be defined as the money balance recorded in a network server, distributed database on Internet or a stored-value card (Al-Laham et al., 2009). The types of digital currencies include cryptocurrencies, virtual currencies, central bank digital currencies and E-cash. In a similar vein, virtual currency can be defined as “a digital representation of value that is neither issued by a central bank or a public authority, nor necessarily attached to a fiat currency, but is accepted by natural or legal persons as a means of payment and can be transferred, stored or traded electronically” (European Banking Authority, 2014).

Digital currency can be centralized or decentralized. Most centralized digital currencies issued by private entities were not really successful to date (Nixon, 2019). Decentralized digital currencies have been relatively successful in being adopted by the public. Most decentralized digital currencies depend on encryption to work, called cryptocurrencies.

Tab. 1 shows the market caps and volumes for top 10 cryptocurrencies as of October, 9 2020. Bitcoin has a market capitalization of more than 200 billion USD. For comparison, M1 money supply of US dollar is around 5 trillion USD, Euro is around 8.5 trillion USD and Swiss Franc is around 800 billion USD at the time.

The most popular cryptocurrency with the highest volume is Bitcoin at the time of this writing. To trade Bitcoins one needs to set up a digital wallet. Inside the wallet are private and public keys,...

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