Did you know that the Bitcoin value has multiplied by 879,999 times between 2010-2017? This and a total of 58 ‘insane facts’ have been compiled by experts from BitcoinPlay.
Given the success in annual return it has since its introduction in 2009, the cryptocurrency has managed to catch the eye of numerous strong investors.
If you are among the insightful few who got it in its infancy, you probably are a millionaire right now. It is not too late to climb aboard but that is not to say that there aren’t volatility, regulations and other unforeseen risks holding people back from the BTC market.
A lot of governments are skeptical of the anonymous nature of the currency and could clamp it down at any moment; in fact, in some nations it is outlawed completely.
Before browsing off to your bank and swapping your traditional currency with this growing digital alternative, let’s take a closer look at the main Bitcoin-related risks that you should be aware of:
Regulations are considered to be a major risk when about the future of Bitcoin. The price of the digital currency is heavily dependent on its market demand. For instance, if a country like China, which holds 90% of the Bitcoin trading market, would ban its citizens from trading, the price of Bitcoin would crash. Thus, any negative regulatory changes concerning Bitcoin trading can have a huge impact on Bitcoin investments on a global scale.
The Risk of Large-Scale Hacks
The continuous large-scale cyber-attacks to large Bitcoin companies and Bitcoin currency exchanges present a serious risk to the price of Bitcoin. The world’s largest Bitcoin exchange MT Gox crashed in 2014 and Bitcoin prices fell by 40%. Need another example? Bithumb, the 4th largest bitcoin exchange, was hacked for billions in July 2017. So, all current and future Bitcoin investors out there, be aware that cyber-attackers are your enemies and it’s wise not to hold BTC in third party wallets or at the exchanges.
Bitcoin Transactions Are Untraceable
The fact that Bitcoin transactions are not centralized and thus not traced by any government authority attracts criminals and hackers. The sale and purchase of illegal drugs and other items can therefore flourish. In turn, such activities can spur governments into regulatory actions, casting negative light upon the currency, as the Silk Road crackdown clearly demonstrated back in 2013.
Bitcoin is Still Young
The history of Bitcoin traces back to 2009, giving it a maturity of 8 years. 8 years is hardly enough to gather appropriate data to predict the future of Bitcoin. Let’s face it, Bitcoin is still young. What if in the near future somebody finds a major flaw in the system? Or what if a new cryptocurrency supersedes the success of Bitcoin? You never know, and why is that? There is an insufficient amount of data to predict.
Bitcoin is Super Easy to Lose
Be warned! If you lose your Bitcoins, they are gone. Like, gone-gone. No mechanism is present to recover lost Bitcoins. If your Bitcoin wallet gets hacked, all its content is gone for good.
If you accidently make a bigger payment with Bitcoin – gone! Forever!
In 2016 a bitcoiner accidently sent $137,000 instead of $5 with no way to get it back. Even if you keep your Bitcoins on a hard drive and you lose it, guess what? Say goodbye to your Bitcoins. James Howel lost 75,000 Bitcoins by throwing away his hard drive which had £4M worth.
Risky, isn’t it?