If I bought bitcoin in the early days in some exchange for $10, would it have been lost if I kept it in the exchange?

Question

I just want to get some history perspective of Bitcoin. Say in the early days when Bitcoin was $1 or $10, if I decided, "ok, I may invest in US$3000 at the software startup I work for, but that US$3000 is likely to go to $0, so I will just invest $1000 in Bitcoin anyway, assuming it could be lost but not a big deal".

So what places was available for me to buy Bitcoin at that time? If I bought it from BitInstant, Mtgox (I am not familiar and will need somebody who knows the history to answer this), then would that mean that $1000 could become $3 million, except it was all lost or stolen along the way during the BitInstant and Mtgox time?

But if I bought it and immediately transfer to my own wallet, and didn't forget the password, then it would have been ok?

Answer 1

You are correct.

Leaving your money in the hands of a third party such as an exchange means two things

• so far as the Bitcoin network is concerned, you own no money at all.
• when that business fails, your money is usually lost. You might get some back if there is a police investigation and/or some bankruptcy process - but you shouldn't rely on this.

Transferring the Bitcoin amount to the sole control of your own Bitcoin wallet means that your money is safe, so long as

• you keep a copy of the private key(s) or seed-phrase somewhere safe, or make regular backups and remember any password.
• your computer isn't hacked or infected.