The bitcoin bandwagon is gathering pace, and now there are few people who haven’t heard of the magical internet currency. Its meteoric rise from nothingness to a value of nearly $18,000 in December 2017 has had investors kicking themselves at the fact they didn’t buy it up five years ago when it was nearly worthless. Everyone’s heard of the lucky “bitcoin millionaires” who jumped on the cryptocurrency at the right time, but is it too late now for investors to get in on the action?
Some people are saying that it is by no means too late to be getting involved with bitcoin and other leading cryptocurrencies. In fact, experts including Wences Casares, a member of PayPal’s board of directors, have predicted that the currency invented by Satoshi Nakamoto in 2009 could hit a value of $1 million in the next five to ten years. If investors could trust that prediction, then buying up vast amounts of bitcoin still looks to be a viable prospect. But there are, however, some things that potential investors need to consider before they go and stake their life savings on something which people still don’t know much about.
One highly pertinent issue is security. There have been numerous cases of hackers getting hold of large amounts of bitcoin from secure websites. These instances have highlighted the fact that in the internet age in which cybercriminals can strike anywhere, an internet-based currency may not be infallible. Earlier in December, the cryptocurrency mining place NiceHash announced that they had lost over 4700 BTC, which at the time was worth approximately $78 million. Another incident in July occurred at one of the largest cryptocurrency exchanges in the world. Bithumb in South Korea was targeted by highly skilled cybercriminals and the data of 30,000 customers had been compromised. In many cases, individual users are tricked into giving up passwords and data through methods of social engineering, but phishing is also prevalent. Cybercriminals get hold of large numbers of email addresses through web scraping, using bots to extract large amounts of data from websites and servers, and through other methods. Then, they compose emails that look legitimate in order to trick users to follow links to sites where they’ll input their credentials, effectively stealing such password and username information, if the recipient falls for it.
Now that massive companies such as NiceHash and Bithumb have shown that they are not impervious to attacks, people wishing to invest in cryptocurrencies would be wise to store their wealth elsewhere. It is highly recommended that you store bitcoin and other cryptocurrencies in a hard wallet rather than on an exchange like Coinbase. You could opt to use an offline bitcoin hardware wallet, or transfer your funds onto a USB drive which is kept in a safe place. The most important thing to remember is that if your money is online, it is at risk.
Some people think that the meteoric rise of bitcoin is simply a bubble that will burst at some point in the near future. Others believe that one day all transactions will be done with the e-currency. By investing now, the ROI won’t be anywhere near as high as it was a few years ago. But if you believe in the predictions of respected money experts like Casares, it may be wise to put whatever money you can spare into cryptocurrencies today. Just make sure that you follow all the correct security protocols when doing so.