While investing in the stock market is cool and might help you save for your retirement, Bitcoin is a fun investment option – it’s hip, new and growing at an absurd speed.
Perhaps what should scare users the most, is how easy it is to lose your coins. If you don’t have your wallet backed up on at least two devices, it’s easy to lose it in a computer crash. Also, if you don’t bother to hold your Bitcoins in Your wallet, you are practically begging hackers to steal it. Though Bitcoin exchange platforms do everything they can to secure their Bitcoins, there is always someone trying to hack those platforms by any means necessary.
This is what happened to Mt. Gox, one of the biggest Bitcoin exchange platform out there. Between 2013 and 2014 Mt. Gox was handling 70% of all Bitcoin transactions in the world. This meant managing nearly half a billion dollars worth of accounts.
As the Japanese and the U.S governments started putting pressure on Mt. Gox, withdrawing became harder and harder until February 2014 when Mt. Gox stopped all withdrawals from the site. The announcements where unclear and users where waiting for their money to get released for months. By the end of February, the website disappeared utterly. The company allegedly lost about 750,000 Bitcoins in a major security breach, and it is not possible to recover them.
All users who have had money on the exchange platform on the night of the security hack lost their money indefinitely, and while a small sum was recovered a few years later, most users can forget about their Bitcoins.
We should learn from that NEVER to hold money on exchange platforms. Always make sure the money travels to your wallet as fast as possible.