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Chaos and Hackers Stalk Investors on Cryptocurrency Exchanges (reuters.com)
From a report: Dan Wasyluk discovered the hard way that trading cryptocurrencies such as bitcoin happens in an online Wild West where sheriffs are largely absent. Wasyluk and his colleagues raised bitcoins for a new tech venture and lodged them in escrow at a company running a cryptocurrency exchange called Moolah. Just months later the exchange collapsed; the man behind it is now awaiting trial in Britain on fraud and money-laundering charges. He has pleaded not guilty. Wasyluk's project lost 750 bitcoins, currently worth about $3 million, and he believes he stands little chance of recovering any money. [...] Cryptocurrencies were supposed to offer a secure, digital way to conduct financial transactions, but they have been dogged by doubts. Concerns have largely focused on their astronomical gains in value and the likelihood of painful price crashes. Equally perilous, though, are the exchanges where virtual currencies are bought, sold and stored. These exchanges, which match buyers and sellers and sometimes hold traders' funds, have become magnets for fraud and mires of technological dysfunction, a Reuters examination shows, posing an underappreciated risk to anyone who trades digital coins. Huge sums are at stake.
>Can't you do everything from your digital wallet on your computer, except convert to real cash ?
In theory. However, any anonymous trading between the crypto and something else (even another crypto) will require a trusted middleman. Of course, the middlemen in the crypto space are pretty much never trustworthy.
> Sorry, I never got on the cryptocurrency bandwagon.
Buy scratch-and-win tickets at your corner store or gas bar. On average, you'll do better and still get the same rush from gambling in hopes of getting filthy rich for little effort. All the rest is overly complicated window dressing.