Risks everyone must understand

Since Bitcoin is a commodity, it can be owned as an investment. As such it does not produce dividends or anything useful.

In terms of holding/safeguarding/transporting, Bitcoin is only data, so it is more cost-effective than physical gold, but carries data risks.

Before investing in Bitcoin, the investors must understand the risks, of which there are several. Below is a partial list:

1 That the investor will entrust their Bitcoin investment to be held by a person/group/organization who loses it, or simply does not return it. Recourse may or may not be available.

That the investor will hold their Bitcoin investment in your own computer, and that

2. their computer will be hacked or destroyed

3. their computer will be ok, but they will use a low-quality wallet, which will create ACCOUNTs not properly matched with PASSWORDs - and any Bitcoin stored in these ACCOUNTs will not be able to be spent, thus lost forever.

4. their computer will be ok, but they will use a malicious wallet created by hackers. The wallet will create ACCOUNTs spendable by the creating hackers instead of the legitimate owner.

5. their computer will be ok, they will use a good wallet, but that mismanage the passwords, and lose their bitcoin (losses are forever)

Regardless of where the investment is held, that

6. Naked futures contracts will be used to manipulate the price of Bitcoin.

7. All politicians will end up forbidding Bitcoin use, even the ones who accept Bitcoin donations as campaign contributions.

Timing

8. That education (and therefore Bitcoin appreciation) will take a LONG, LONG time.

9. That day trading will be attempted, and money will be lost, just like in the stock market.

10. That herd behavior will be exhibited: Buying after seeing others buying, i.e. high. Selling after seeing others selling, i.e. low. Just like with the stock market, such behavior is a recipe for losses. The price of Bitcoin will seesaw as education is spreading slowly and unevenly.
11. That everyone on earth will simply lose interest in Bitcoin.

Plus others, that we cannot think about now.

Risks espoused by other bloggers and mentioned here for full disclosure

* That one day everyone will realize that obviously Bitcoin has no value, and thus it will be worth zero. Some bloggers have been expecting all this to happen any second now, since 2010.

* That if at some time all of a sudden there is be no electricity, no internet, or no person in the world ever wanting to hold any Bitcoin, and again, the price will go to zero.

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