Bitcoin Heaven: Man Wakes Up To Bitcoin Fortune
A lucky Norwegian man discovers his one-off investment from 2009 is now worth a fortune.
His exes are probably kicking themselves now.
Four years ago, Kristoffer Koch was a student working on his thesis about encryption when his research led him to the newfangled digital currency known as Bitcoin, or cash for the internet. On a whim, he bought 5,000 of them for less than 30 bucks.
Koch went on with his life and had forgotten about his investment until this past April when Bitcoin made a splash in the news with its wild price swings. The Oslo-man quickly scrambled for his password to his Bitcoin wallet and, after some trial and error, was floored to find out that his $27 was worth $866,000. Based on today’s exchange rate, he's currently sitting on a $1 million nest egg. That's a return of like THREE-MILLION percent in four years!
"It said I had 5,000 bitcoins in there. Measuring that in today's rates it's about NOK5m ($886,000)," Koch told NRK via The Guardian. Koch cashed out one-fifth of the stash to buy a nice apartment in a wealthy area called Toyen.
What is a Bitcoin?
Bitcoin, launched in 2009 during the global financial crisis, is simply a long string of numbers and letters that is unique to the Bitcoin bank. There are about 11 million of these coins today, and only be 21 million will ever be created, which means making fake money would be nearly impossible. You can't touch or hold Bitcoins, as they only exist on the Internet, but they have the same value as physical money. But unlike cash, Bitcoin money is traceable. The whole network sees it whenever you make a transaction.
Its quirky characteristics, its notoriously erratic fluctuation in value (from $120 to a high of $266), and the fact that it has no owner or centralized bank (like the Federal reserve), is why many people might be wary of Bitcoins.
However, many consumers argue that a Bitcoin is actually more secure, because why trust the traditional banking system (ahem, JPMorgan)? As the recent financial meltdown proved, a few lousy banks can cause a world of damage.
The infant currency is also becoming increasingly recognized. Canada recently opened Bitcoin ATMs and Germany called it a "unit of account" in August.
Do you think Bitcoins are a safe investment?