Over the last few years, Bitcoin has attracted an enormous amount of media, business and investor attention. While trading began as far back as 2009, the price of a single coin has since sky-rocketed.
There are some Bitcoin evangelists promoting the currency as the future of money, capable of replacing or transforming the current banking system. Others are buying Bitcoin as an investment, expecting an increase in value over time since there’s a limited number of coins that can ever be mined. In the early days, a single Bitcoin was valued at less than a penny. At the time, the digital currency attracted the attention of cryptography enthusiasts, as well as innovators interested in mining new coins, but at that price, it’s no surprise that keeping track of your Bitcoin wallet was not necessarily a top priority.
The first documented Bitcoin purchase was recorded in 2010 when a developer in Florida offered 10,000 Bitcoins in exchange for 2 pizzas. A value of around $40 back then. What sounded like a fun idea at the time, would now be worth over $100 million dollars. The recent surge in Bitcoins popularity has resulted in speculators and first-time investors trading on exchanges, hoping to get rich quick.
This has led some experts to believe that a combination of visionaries, gamblers and bots are responsible for the currency sharp spikes and unpredictable plunges. The extreme fluctuation of Bitcoins value has become a common occurrence, where thousands of dollars in gains can instantly disappear in a flash crash in less than 24 hours.
Some investors have converted their entire life savings into Bitcoin, only to panic and sell for a lot less than they originally paid. Getting destroyed trying to make a quick buck without having any idea of what they’re getting themselves into. Aside from the obvious risks surrounding Bitcoins volatile price, there have been numerous hacks and thefts, so be extra careful handling digital currency, especially when it comes to keeping your Bitcoins secure.