Norwegian Man Makes Bitcoin Fortune from $27 Investment
October 31, 2013 12:53 PM
comment(s) - last by
This afforded him a nice apartment in Toyen
You always hear stories about people who tuck old comics or toys in the attic for years and later find out how valuable they've become. Some guy from Norway just did that with
, Kristoffer Koch bought 5,000 bitcoins in 2009 for only 150 kroner ($26.60 USD). Years later, that investment unexpectedly grew into a little nest egg.
Koch originally bought the bitcoins writing a thesis on encryption. After that was complete, he forgot about them.
But when the media started heavily covering bitcoin in April 2013, Koch was reminded of his and decided to take a peek at his encrypted wallet containing those original 5,000 bitcoins. He found out that by today's rates, those 5,000 bitcoins are worth NOK5m ($886,000 USD).
This afforded him a nice apartment in Toyen, which is a wealthy area in the Norwegian capital.
tends to fulctuate a lot, and Koch happened to see his value at the right time. In April 2013, bitcoin value peaked at $266. Then it fell to a low of $50 soon after.
In fact, it hit a high of $197 just this month.
For those who are unfamiliar, bitcoin is a peer-to-peer digital currency that is encrypted. It's bought with traditional currency from a bitcoin exchanger and later change them back for cash or other purchases.
But bitcoin has
had some problems
in the recent past. In August, the feds questioned the legality of cryptocurrency and considered banning it or at least putting heavier restrictions on it. At that time, the bitcoin industry's largest advocacy/trade group the Bitcoin Federation met with federal regulators from the
U.S. Department of Homeland Security
(DHS), Federal Reserve,
Department of Treasury
Federal Deposit Insurance Corp.
Office of the Comptroller of the Currency
Internal Revenue Service
Federal Bureau of Investigation
Earlier this month, the FBI shut down Silk Road, which was a website designed that enabled its users to buy and sell illegal drugs and other unlawful goods and services anonymously. New York U.S. Attorney Preet Bharara seized $28 million in bitcoins that belonged to Ross Ulbricht, the alleged owner of Silk Road.
This article is over a month old, voting and posting comments is disabled
10/31/2013 10:21:12 PM
The primary function of government and the central bank is
to create and hand out money. That statement is absurd. Even if it happens, the government has other functions, none of which can be singled out as *the* primary (e.g. homeland security, regulation, roads, reciprocity agreements, protecting constitutional rights - when they're not stomping on them).
The central bank's function is also not to create or hand out money, it has more important issues like maintaining a stabile money system - despite what's happened in recent years, it's still considered stabile. Other functions include regulating trades/mergers/takeovers and protecting your dollar from counterfeit and theft.
Also, the money system seems to be designed in such a way that there will always be a growing global debt; however, a local economy (e.g. US) can outperform other nations, thus being profitable. But keep in mind that countries can default; they also merge and are taken over by other countries, just like businesses.
The Von Matrices
The Von Matrices
11/1/2013 12:57:38 AM
The problem is that the central bank and its associated government are inseparable even if they operate independently. In all major fiat currencies the government supporting the currency is also the single largest user of that currency. Therefore, that government indirectly influences the value and stability of that currency and the central bank has to correct for that.
The reason why governments don't like Bitcoin is because they can't control it. If you can't keep inflating your currency, then you have to pay off you debts because the interest payments become oppressive. You can't just continue to inflate your currency so that the real value of the debt becomes smaller and smaller.
In my opinion, I fully support government debt as long as it doesn't cause the currency to crash. The media has a bias toward government debt being a negative with no positive. In reality, the debt (a negative) is just from the government providing services to its citizens (a positive). The cost of these services not subsidized by taxes is paid through the loans citizens provide. Taking this to an extreme, if the government were to default, the citizens who provided the loans would be out of their money but they would also have had all the services and infrastructure that were paid for using those loans. They could have just paid taxes and have been out that same amount of money.
11/2/2013 3:59:00 PM
In my last comment, I don't know why "stable" was autocorrected to "stabile" - that was at no fault of my own and didn't notice it. Perhaps I've used "stabile" too much when discussing prototypes.
I'm not an expert, but I agree with the statement about control, but not because of their ability to affect inflation. In fact, inflation in the United States has been rather constant, which is great in terms of stability. Again, I'm not an expert, but I would surmise that the lack of control makes it harder for regulation. Private sectors are generally great at invention and innovation, but they can also be really bad when it comes to greed - consider profiteering, collusion, and intimidation. Bitcoin has the potential to be both really good and really bad and it's the
reasons that I tend to play the conservative card.
The problem with government debt is there is such a thing as too much. The media likes to play it up for ratings, but the government could be a little more intelligent in how it allocates its finances. Remember, this income is coming from businesses, taxes, tariffs, foreign countries, etc. but people want to have a say in how their taxes are spent - after all, they are doing the work for that money.
"Paying an extra $500 for a computer in this environment -- same piece of hardware -- paying $500 more to get a logo on it? I think that's a more challenging proposition for the average person than it used to be." -- Steve Ballmer
Bitcoin Foundation Meets With U.S. Feds Over Legality of Cryptocurrency
August 27, 2013, 8:48 AM
Bitcoin Rollercoaster Ride Sees Currency Soaring to New High of $32/Coin
February 28, 2013, 3:39 PM
FBI's Facial Recognition Database to Have 52 Million Criminal, Non-Criminal Photos by 2015
April 15, 2014, 2:56 PM
Microsoft's Anti-Google "Scroogled" Campaign May Have Ended
April 15, 2014, 2:44 PM
FAA Requiring All Flights to Have GPS Tracking System by 2020
April 15, 2014, 1:25 PM
Google Updates Terms of Service to Disclose Email Scanning for Targeted Ads
April 15, 2014, 9:29 AM
Netflix Speeds Increase for Comcast Users Following Recent Agreement
April 14, 2014, 8:02 PM
44 Percent of Twitter's Total Users Have Never Sent a Tweet
April 14, 2014, 7:55 AM
Most Popular Articles
Cities to Carpoolers: Sharing Your Car is Illegal, We Will Seize Your Cars
April 4, 2014, 9:17 PM
Taiwan's AOU Claims to Have World's Highest-Res. OLED Smartphone Display
April 11, 2014, 1:44 PM
iPad Exploiter is Freed by Federal Appeals Court
April 11, 2014, 7:40 PM
It's Very Likely Neanderthals and Humans Had Sex, Produced Offspring
April 10, 2014, 8:40 PM
Cops at Historically Troubled LAPD are Sabotaging Digital Recording Devices
April 9, 2014, 11:10 PM
Latest Blog Posts
Facebook Aims to Provide Internet to "Every Person in the World" with Drones, Satellites
Apr 1, 2014, 10:20 AM
Retail Mobile Sites Experience Outages in Light of Simplexity's Bankruptcy
Mar 14, 2014, 8:48 AM
Tesla vs. BMW: Who Has the Safer EV?
Feb 1, 2014, 2:56 PM
Justice Leaks Details of Next HTC One Two Flagship Phone
Dec 5, 2013, 4:04 PM
Global Cyber Espionage Concerns Reveal Growing Cyber Armies
Nov 29, 2013, 11:04 AM
More Blog Posts
Copyright 2014 DailyTech LLC. -
Terms, Conditions & Privacy Information