Bitcoin is a virtual currency that was initially devised as an unregulated and decentralised payment system, which has been widely used lately. Bitcoin is gaining more and more attention from international media as its value skyrockets with no clear reason behind it or backing of any authority.

In this article, we will be discussing Bitcoin risks involved in Bitcoin investment to make sure you are aware of all problems associated with Bitcoin before investing your time and money into Bitcoin mining or trading. You can also visit Bitcoin Buyer to gain complete information about bitcoin trading.

Most common Bitcoin Risks today:

1) No one can predict Bitcoin's price – It's a dilemma since the only way to obtain Bitcoins now is via Bitcoin trading through an online exchange where trading bots operate 24/7 making all kinds of crazy automated for traders hoping to turn a quick profit. Bitcoin can be worth hundreds of dollars or even zero in a few seconds.

2) Bitcoin's value fluctuates rapidly – The Bitcoin market is still very young and not stable, meaning Bitcoin's exchange rate against other currencies can change dramatically within a day because of its low liquidity. It means you run the risk of losing all your money if you trade Bitcoin with leverage or margin trading, which are widely available on many Bitcoin exchanges. Even if you invest in BTC without leverage or margin trading, Bitcoin price could drop so much in a day that it'd become worthless in the next couple of hours since most people would sell their Bitcoins at loss rather than holding them when this happens, so they wouldn't get your coins back when they bounce up again.

3) Bitcoin Bubble – Bitcoin's value will likely dramatically drop or even make Bitcoin become worthless overall in a few years. Bitcoin is open-source and anyone can contribute to Bitcoin software, therefore making it easy for hackers to steal Bitcoin from exchanges or wallets, which have already happened a couple of times. Bitcoin mining difficulty has been rising exponentially since the launch of Bitcoin in 2009 giving small miners a lesser chance at earning decent Bitcoins ever again.

4) Bitcoin relies on trust – Unlike traditional fiat currencies that are backed by government authority and legal system, Bitcoin doesn't rely on any authority or the legal system to back it up. It means that no one can help you if your wallet gets stolen or hacked with all your Bitcoins inside, except yourself since there is no authority you can complain to. Bitcoin is money, Bitcoin is a bubble and Bitcoin is a Ponzi scheme according to some experts.

What About Bitcoin Mining? Bitcoin mining involves using powerful computers solving hard mathematical problems all day long as part of the Bitcoin client's operation for generating new Bitcoins as they are generated from the Bitcoin mining process itself as well as verifying Bitcoin transactions on the Bitcoin network at the same time.

Once your computer successfully solves those problems, you will be awarded Bitcoins depending on how much computing power you have invested into Bitcoin mining with respect to the total computational power of all Bitcoin miners in the world combined. However, there are rumours that huge market players such as banks, governments, or even large stock exchanges might control most of Bitcoin mining operations in the near future which would make Bitcoin mining not profitable at all for small miners like you or me.

Bitcoin mining hardware is expensive and it might take months, if not years before you could break even on your Bitcoin mining investment by covering the cost of Bitcoin mining hardware alone with Bitcoins that you would possibly earn from the Bitcoin mining process itself along with transaction fees since there are no other costs involved in Bitcoin mining.

What about Bitcoin Mining Pools?

Some major players in the Bitcoin industry such as The Pirate Bay (TPB), announced recently that they're looking into adding support to their site for utilising Bitcoins instead of trading them, but this will be done through a Bitcoin payment processor so TPB users can use Bitcoins for donating money to TPB which should help boost adoption rate among people who aren't aware of Bitcoin but do use TPB from time to time. But the Bitcoin mining pool is a different matter altogether which you can easily get into without investing too much.

What is the Bitcoin Mining Pool?

Bitcoin client automatically connects you to a Bitcoin pool with all other Bitcoin miners worldwide since it's part of the Bitcoin client itself, which makes the Bitcoin mining pool pretty much essential for Bitcoin mining in the world since Bitcoin blocks are very hard to find every 10 minutes by any Bitcoin miner in the network.