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 5:58:11 PM
Buy assets and sell them as needed. I know retirees are worried about assets losing value, but that's why we have social security as a fallback.
It would be great if we could magically store your labor to help you later in life, but we can't, and assets are the only way we can transmit productive value through time.
The "lose it" part - which is only 2% per year but should be a bit higher - is needed because an economy can't function if everyone saves. The wealthy are already doing too much saving in the last 5 years even with 2% inflation. Zero inflation or, more likely, deflation would make saving even more attractive than investing.
I would be open to a certain amount of cash in a 401k for debt-free individuals to get interest matching inflation, but choosing to turn money into an artificial asset of fixed supply would destroy the economy.
"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997
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