5 Bitcoin disasters of all time; why it's never safe to invest in virtual currency

The frenzy around world's biggest virtual currency, Bitcoin, has reached a level where it's impossible for you not to think about investing in it. Every day Bitcoin is setting up a new benchmark, luring you to become a part of this unpredictable financial cycle. At the same time, some financial institutions such as JP Morgan Chase and Berkshaire Hathway have debunked the "bitcoin mania", calling it a "fraud" and warning people against falling for the "Bitcoin trap". Being the most popular and an unregulated, or independent currency, Bitcoin is vulnerable to online sharks - hackers - waiting for the right time to dig in their claws on your money. A recent examples: Hackers stole over $80 million in Bitcoins by breaking into Slovenian-based virtual currency marketplace NiceHash. The currency is so volatile that you can't be sure when it is not your day. On Thursday, the virtual currency dropped 22 per cent to low of $15,262 after taking a $20,000-mark jump on last Sunday. Bitcoin fell below $13,000 on Friday on a Luxembourg-based coin exchange, Bitstamp. The crypto-currency has seen two sharp drops in the last two months.

As per Coindesk, a similar virtual currency exchange, one third of the two third Bitcoins mined are lost forever. Reuters says more than 9, 80,000 Bitcoins have been stolen from exchanges since 2011, roughly around $1, 57, 780, 04900 as per the current price. The reason for disappearance can be anything like hacking, or hardware failure.

So is Bitcoin a monetary revolution - and you think you must be a part of it - or should you keep a distance?

Bitcoin advocates swear by its anonymous founder Satoshi Nakamoto's super complex algorithm called Blockchain, an online distributed ledger system that maintains the data related to every single Bitcoin transaction. Bitcoins are stored in an open online decentralised ledger where every single transaction is verified by the cryptocurrency miners spread all over the world, who are constantly competing with each other for a bitcoin reward. Every miner can access the ledger and the system reflects each small development. They say the system is impossible to hack as it's not centralised like Federal Reserve Bank of the US, or any other central bank. The mainstream institutions pose the same argument saying since there's no solid system to back it up if things go haywire, it's not reliable. In entirety, it seems like a zero sum game. But before you take the plunge, read these five biggest financial disasters associated with Bitcoin that pose serious questions on its reliability.

Bitcoin mining marketplace NiceHash reported on Wednesday that hackers stole nearly $80m in Bitcoins from the company. Ever since the company informed the law enforcement agencies, the operation has been stopped and users have been told to change password and other personal details. It was "a highly professional attack with sophisticated social engineering", NiceHash head of marketing Andrej P Skraba told the Guardian. The company has so far lost around 4,700 Bitcoins worth about $80.02 million at current prices. The official website of the mining marketplace says the service is currently unavailable and that the matter is being investigated. "Clearly, this is a matter of deep concern and we are working hard to rectify the matter in the coming days. In addition to undertaking our own investigation, the incident has been reported to the relevant authorities and law enforcement and we are co-operating with them as a matter of urgency," the company said in a statement.