At first sight, the advantages of Bitcoin are obvious: fast transactions, much lower fees compared to traditional banking and anonymity. But what are the risks?
The first and most important risk is the risk of security. If you have downloaded a wallet program on your computer, you should make sure never forget the password or your funds will be permanently lost. Unlike your bank, there are very limited password recovery options with Bitcoin. You need to backup your wallet on a regular basis and to store it in a safe place. If you don’t do this, you could definitely lose your bitcoins in the event your hard disk fails or your computer is stolen. Using online services is not a good idea because such services generally still do not provide enough insurance and security to be used to store money like a bank.
The high volatility of bitcoins can significantly affect the price. On Tuesday 18 August 2015, bitcoin’s price fell 16% in just one day!
The third problem is the opacity in bitcoin management. In April 2014, MtGox, the world famous Bitcoin exchange platform, has gone bankrupt. Sixteen months later, in August 2015, the former head of MtGox, French-born Mark Karpelès, has been arrested in Japan for embezzlement.
So, can you attempt the Bitcoin adventure? Yes, provided that you keep in mind that it is a speculative currency and you commit only small amounts of money.