Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren't printed, like dollars or euros – they're produced by people, and increasingly businesses, running computers all around the world, using software that solves mathematical problems.
Bitcoin trading seems easy, but so many people lose money trying to trade.
I want to make sure new users understand the risks and common mistakes new traders make so you can avoid losing money.
Losing Money on Exchanges
When you trade Bitcoin, you'll need to store your money with an exchange. Most of the time this is fine and you will not lose money.
Unfortunately, history is filled with exchanges that were "hacked" or did not allow customers to withdraw their own money.
Take Mt. Gox for example. Thousands of people just left money on the exchange. When Mt. Gox went down, they all lost their money.
Ideally, when trading, only deposit to make a trade, then get your money off the exchange.
Many people get introduced to cryptocurrency. Some people feel disappointment, because they feel as if they missed out on Bitcoin and want to get on the "next" big crypto.
The reality is most cryptocurrencies simply fail and don't retain their value.
The main reason for this is because crypto-markets are not regulated. It's very easy for a developer to create a new cryptocurrency. The developer or group can then market the coin, try to get new people to buy it, and then sell it and abandon the project. The sad reality is this is what happens with most altcoins.
So, you should research all altcoins if you plan on storing value in one long term.
Quick profits (and losses) and be made trading altcoins, but it is silly to think that every altcoin will be the next big thing.