Bitcoin's success in the financial world is tremendous, and each day, it is setting new records, tempting investors and trades to become a part of its community. However, financial institutions across the world call bitcoin a fraud and warn people from investing in it. Bitcoin has created chaos in the economic cycle, making everything think about whether they should invest in bitcoin. The hype about the biggest cryptocurrency worldwide, Bitcoin, has reached a new level where investors can't control themselves from investing in it.
On the other hand, some crypto experts and financial institutions warn people to avoid its hype and prevent themselves from falling into this trap of an impulsive economic cycle. Bitcoin is an independent, unregulated, and most popular cryptocurrency that is highly vulnerable to cybercriminals. Hackers always have prying eyes, and they always wait for the right time to get access to your coins or wallet. There have been many incidents where hackers have hacked millions in bitcoin, and investors don't even know what hackers can do. There have been no such incidents with Ethereum, and you can choose to become an Ethereum trader.
Many crypto exchanges have become the victim of hackers and have lost millions in bitcoins to investors. Since 2011 around 9,80,000 bitcoins have been stolen from crypto wallets and exchanges. Some people still think of bitcoin as a monetary revolution, but do you think you should be a part of its community, or should you distance yourself from investing in it?
Should you invest in bitcoin or maintain a distance?
Bitcoin advocates guarantee the complex algorithms that Satoshi Nakamoto created known as the blockchain. It is an online distributed public ledger that records the transactional data of bitcoin. It is a public ledger which means all the users can view the transaction that takes place publicly. Miners mine bitcoin transactions and compete to solve the block faster and earn the bitcoin reward. Each miner who contributes to the mining process can access the blockchain ledger anytime, and if any hacker tries to manipulate the system, it reflects every minor change.
Some bitcoin advocates say that it is impossible to hack the bitcoin network as it is a decentralized network, unlike banks. However, the financial institutions and other mainstream institutions argue over the reliability of the bitcoin network as any solid system does not back it. Its value can go to zero anytime as there is no central authority that backs bitcoin. Before you plan to invest in bitcoin, read about the financial disasters recorded in the history of bitcoin that questions the reliability of the bitcoin network.
Ross Ulbricht is the proprietor of Silk Road, and traders use this website to carry out illegal transactions in arms and drugs. Silk Road became famous in 2011, and in two years, it has gained popularity. It became the favorite marketplace for illegal traders to carry out the trade of drugs and weapons. Drug Mafias used to buy pills, and within a few months, Silk Road became the darknet leader with an annual turnover of more than $1 billion.
Later in 2013, the proprietor of Silk Road, Ross Ulbricht, got arrested, and the site got shut down. Ross got convicted for life on criminal enterprise, illegal distribution of drugs, drug trafficking, money laundering, and many more criminal activities.
Hack of Mt Gox exchange
Mt Gox is a Tokyo-based crypto exchange that deals in cryptocurrencies. The company reported that it lost around 80,000 bitcoins, according to a record. The company was in loss and trouble from the start, but the CEO of Mt Gox, named Mark Karpeles, didn't reveal it. Later in February 2014, the exchange confirmed that around 850,000 bitcoins had disappeared suddenly, costing approximately $450 million. Many investors faced loss, which made people think that bitcoin needed to be backed by the government. And this is what causes uncertainty in cryptocurrencies but without a delay.
Fluctuation in the price of BitInstant
BitInstant is a crypto exchange, and the CEO of BitInstant, Charlie Shrem, is a famous entrepreneur who loved the idea of cryptocurrencies that the government doesn't control. He invested in bitcoin at a low price and started a crypto exchange at his home. The crypto exchange got around $1.3 million from the Winklevoss brothers and collaborated with giant companies. The CEO started facilitating crypto transactions on the Silk Road, and he got accused of selling illegal drugs and weapons.