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.
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11/4/2013 2:13:52 PM
Your question hasn't been answered because it's nonsensical, although I have seen others ask the same thing so I'll try to answer it.
Debt is not supposed to be entirely paid simultaneously. Money IS debt: When you earn it, somebody owes you future goods/services in return. Fiat currency basically results in assets of real societal value backing it as opposed to a precious metal given arbitrarily inflated value from its attachment to a monetary system.
If you want to understand fiat currency, think of an economy with no money at all where we just trade assets. The moneyless analogue of new money from the Fed eventually going to a mortgage is as follows: I want to build a new house, so I give the builders and the previous landowners shares of the house that is about to be built, with all this tracked by the bank. As I work for others and earn my own salary of other asset shares, mortgage payments effectively swap them for the ones on my house, until I own it entirely.
Fiat currency effectively blends all these asset shares into a homogeneous mixture so that we don't need a stupendous amount of information on hand about world assets to understand if we're getting ripped off in a transaction.
Debt is how money gets attached to assets in the way described above. Until we run out of things to build, i.e. societal endgame, there's no problem with the economy's total debt never being paid back.
Inflation targeting is, by definition, the maintenance of the common understanding of value mentioned above.
Interest is the market clearing price for building new assets, which must be controlled to prevent varying inflation/deflation breaking that common understanding of value.
"And boy have we patented it!" -- Steve Jobs, Macworld 2007
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