What We’ve learned from the Bitcoin Meltdown
The best way to learn is from your mistakes
Bitcoin, the most sought after crypto currency, has had tremendous ups and downs the past year but February 25th, 2014 marks a historic moment as Mt. Gox, the largest online Bitcoin Exchange, has shut down their website and halted trading.
Many reports are circulating around the web that this is one of the most devastating and disastrous moments the Bitcoin community has endured and as the community woes, we all learn valuable lessons that we will hopefully not forget.
Early adopters of Bitcoin are taking a huge risk that can come with huge rewards. It’s important to keep in mind that the Bitcoin Market is similar to the stock market, that the price can fluctuate as supply and demand sway. The market is influenced by online reports that circulate from various news sources and reddit which has potential to direct the market.
Mt Gox’s fiasco has hurt the Bitcoin community and the price but it’s something that the community can learn and bounce back from. Bitcoin is still very new and we need to remember that there is a lot of risk involved, just like investing in certain stocks.
There are countless articles and comments online of users who had hundreds of Bitcoins in the Mt. Gox exchange that have now been lost. Hundreds of thousands of dollars vanishing with no update of what’s going to happen with the unavailable funds.
Bitcoin users need to educate themselves on basic finance principles and they need to understand how to divide their portfolio amongst exchanges and not “have all your eggs in one basket.” Having all of your Bitcoins in one exchange is a huge risk that many have taken and now many are unfortunately seeing the repercussions of what can happen when exchanges falls.
It’s a very hard lesson to learn that the Bitcoin community must learn from. Bitcoin is growing stronger and gaining support across the world and it’s important to keep up the momentum. Bitcoin is the “Wild Wild West” of online currency and it’s time that contributing factors and exchanges are set up to help stabilize and provide security for Bitcoin as it grows.
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