This is an absolute must-read for (traditional) investors expanding to bitcoin. On a very frequent basis we get news that a bitcoin exchange is being hacked. But that is not the only hazard when trading bitcoin. Not all bitcoin exchanges are equal. Far from it. The post added below deals with counter-party risk. It focuses on:
- Price differences, and believe me these are massive and not always for obvious reasons
- Exchange founders/sponsors,you might want to know who/what is behind the exchange
- Funding/ Sources of capital, again you might want to know who/what is behind the exchange
- Security, here’s where the technical part kicks in.
To traditional investors: please realize you have to get yourself familiar with this kind of information if you want to trade bitcoin instead of gambling on it. It also again underpins the infant-stage of this ‘asset class’!