Over the last few years, Bitcoin has attracted an enormous amount of media, business and investor attention. And while trading began as far back as 2009, the price of a single coin has since skyrocketed. 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 two pizzas — a value of around 41 dollars back then. What sounded like a fun idea at the time would now be worth over a hundred million dollars!
The recent surge in Bitcoin’s 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’s sharp spikes and unpredictable plunges.
The extreme fluctuation in Bitcoin’s value has become a common occurrence, where thousands of dollars in gains can instantly disappear during 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 what they originally paid — getting destroyed trying to make a quick buck without having any idea what they’re getting themselves into. Aside from the obvious risk surrounding Bitcoin’s volatile price, there have been numerous hacks, thefts and scams. So be extra careful handling digital currency, especially when it comes to keeping your Bitcoin secure.