Hey, before you start to invest in bitcoin it is good to be aware of these five danger area’s. This article discusses five dangers of Bitcoin investment for beginners based on the book: Start investing in bitcoin today by Janne M. Lohvansuu.
Five dangers of Bitcoin investment.
Based on the Book Start investing in Bitcoin today by Janne M.Lohvansuu
For investors, it is interesting to see where potential dangers lie. Janne’s book describes five risks for investors.
- Malicious exchanges
- Technological failure
You can buy bitcoin online from exchange websites; however since there have been exchanges in the past that had security breaches, like Mt. Gox, it remains hard for investors to identify which/if exchange(s) can be trusted. Mt. Gox used to be the most widely used Bitcoin exchange market, but a breach occurred. They lost a majority of their customers funds. Even though personal integrity is present, the exchanges can be compromised. More history on hacks and theft of bitcoin here.
Online Bitcoin wallets have the possibility of being hacked. Hackers have been able to hack into online bitcoin wallets and were able to steal customers funds in the past. One example is the Ukranian hacker group who stole from blockchain.info See the article here.
Banks or governments have influenced the Bitcoin price in the past. We have seen the decline of the bitcoin price with 14% over one weekend in the spring of 2014. It happened because the Chinese government suspended yuan deposits from the Chinese Merchant Bank to major Chinese Bitcoin exchanges.
Sometimes there is the aspect of personal safety measures the end-user uses. Safest would be to generate your private keys offline, save them on an external hard drive, print them out on paper and keep them in a secure location. Furthermore, Denarium hides the private key under a security hologram for extra security.
The price of Bitcoin goes dramatically up and down, but the market seems always to recover. The highest bitcoin price was around 17.900 USD when the interest in Bitcoin spiked last December. The cost for 1 Bitcoin in May 2018 was average 6900 Euro; It has risen from $0.003 to 6900 Euro in 8 years time. 2,3 million times as much as the initial value. Bitcoin seems to keep interest as a lot of users prefer to hold their capital in their own hands, away from influence by a government or bank. With Bitcoin, however, you need to prepare for sudden price changes.
How do we as Denarium and the services of Prasos provide answers?
We can only affect those things we can influence. This is why we make physical bitcoin coins. Bitcoin wallets that are always offline, and according to us the safest way of storing bitcoin. We have the know-how and the competence to provide you with solutions. Sudden price changes in Bitcoin (volatility), because of regulation, for example, we cannot control. Our services intend to provide answers to those aspects we have read about that we can control. Such as exchanges, hacking and technological failure.
Take a look at our process page for an introduction to our physical bitcoins. We make it very easy for customers in Europe since we have the technical know-how and provide customers with a ready product pre-loaded with Bitcoin.
Denarium is part of Prasos. Next to Denarium Prasos started their exchange platform called Coinmotion and the Finnish broker Bittiraha. In addition to that, they have also made Bitcoin even more accessible to the public operating the largest Bitcoin ATM system in the Nordic nations, called Bittimaatti. Prasos has been building customer trust and providing reliable Bitcoin services over the last six years.