Talk about a degree that gives you bang for your buck.
Bitcoin prices on the rise.
Kristoffer Koch was writing a thesis on encryption in 2009 when he spent about $27 to buy 5,000 bitcoins.
Life went on, and he forgot about his investment until bitcoin’s wild price swings earlier this year resulted in a slew of articles about bitcoin.
Bitcoin is a virtual currency that isn\’t controlled by a central bank. Instead, bitcoins are created through a process called mining, in which a computer tries to solve a cryptographic problem. The total supply of bitcoins is capped, which has led to comparisons with assets like gold.
Koch\’s original $27 investment is now worth about $886,000, Koch told the Norwegian broadcaster NRK. That’s a return of 3,281,500% in four years.
Koch has used one-fifth of his bitcoin stash to buy an apartment in Oslo, Norway, the Guardian reports.
A Norwegian man who bought $27 worth of bitcoins in 2009 and forgot about them discovered their value had since shot up - to $980,000 at today's price.
Kristoffer Koch decided to buy 5,000 bitcoins for only 150 Norwegian kroner ($26.60) in 2009, after discovering bitcoin as part of an encryption thesis he was working on.
Koch probably didn't think he would become wealthy as a result, but his 5,000 BTC has turned into a goldmine. It was a wise investment by someone who stumbled across bitcoin before many others did.
Koch found that his bitcoins were worth 5 million Norwegian kroner ($886,000) when he checked back in on them. At the current Bitcoin Price Index of $196, those coins are now worth about $980,000.
After purchasing the 5,000 bitcoins, Koch pretty much forgot about them altogether. That is, until the price shot up to over $200 back in April and he started seeing press coverage about bitcoin's rise.
"I thought to myself, didn't I have something like that?" Koch told NRK, a Norwegian news outlet.
He did, and after figuring out the password to his wallet and seeing how valuable those bitcoins had become, he sold off a portion of them. Now he has an apartment that he purchased in an expensive part of Oslo, Norway. All thanks to the huge price gain that bitcoin has experienced, mostly in the past year.
It turns out that Koch's frivolous technology spending, against his girlfriend's wishes, actually turned out to be a great investment.
“I buy a lot of technical little things that I never have time to use, and this was the worst of all, the fact that I was buying fake money," Koch told NRK.
It’s not fake anymore, at least not to Kristoffer Koch.
Many people have become wealthy as a result of bitcoin's rise, although stories like this are rarely in the public eye. There's the story on the Bitcointalk forums about Kevin, who purchased 259,684 BTC for under $3,000 in 2011.
Then there is Erik Voorhees, who founded the bitcoin gambling site Satoshi Dice and sold it for 126,315 BTC, worth about $24.7 million at the current bitcoin price.
And The Verge reported earlier this year that Satoshi Nakamoto, the Bitcoin network’s mysterious founder, has an address with over one million bitcoins.
Of course, we shouldn't forget about the person who bought two pizzas for 10,000 bitcoins back in 2009. Now, if only that person had kept them, or perhaps forgot about them and rediscovered them years later like Kristoffer Koch did.
Featured image: antanacoins / Flickr
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Can You Earn Bitcoin With USI-Tech — The Finance Guy
Bought in 2009, currency’s rise in value saw small investment turn into enough to buy an apartment in a wealthy area of Oslo
Bitcoin: what you need to know
This article was originally published on 29 October 2013. Due to a technical fault, it has been republished here, on a new page.
Norwegian man discovers $27 bitcoin investment now worth more than enough to buy an apartment. Photograph: George Frey/Getty Images
The meteoric rise in bitcoin has meant that within the space of four years, one Norwegian man’s $27 investment turned into a forgotten $886,000 windfall.
Kristoffer Koch invested 150 kroner ($26.60) in 5,000 bitcoins in 2009, after discovering them during the course of writing a thesis on encryption. He promptly forgot about them until widespread media coverage of the anonymous, decentralised, peer-to-peer digital currency in April 2013 jogged his memory.
Bitcoins are stored in encrypted wallets secured with a private key, something Koch had forgotten. After eventually working out what the password could be, Koch got a pleasant surprise:
“It said I had 5,000 bitcoins in there. Measuring that in today’s rates it’s about NOK5m ($886,000),” Koch told NRK.
Silk Road fluctuations
In April 2013, the value of bitcoin peaked at $266 before crashing to a low of $50 soon after. Since then, bitcoin has seen large fluctuations in its value, most recently following the seizure of online drugs marketplace Silk Road, plummeting before jumping $30 in one day to a high of $197 in October.
Koch exchanged one fifth of his 5,000 bitcoins, generating enough kroner to buy an apartment in Toyen, one of the Norwegian capital’s wealthier areas.
Two ways to acquire bitcoins
Customers line-up to use the world’s first ever permanent bitcoin ATM at a coffee shop in Vancouver, British Columbia. Photograph: Andy Clark/Reuters Photograph: Andy Clark / Reuters/REUTERS
Typically bitcoins are bought using traditional currency from a bitcoin “exchanger”, although due to strict anti-money laundering controls, the process can can be tricky. A user can then withdraw those bitcoins by sending them back to an exchanger like Mt Gox, the best known bitcoin exchange, in return for cash.
However, bitcoin is gaining more and more traction within the physical world too. It is now possible to actually spend bitcoins without exchanging them for traditional currency first in a few British pubs, including the Pembury Tavern in Hackney, London, for instance. On 29 October, the world’s first bitcoin ATM also went online in Vancouver, Canada, which scans a user’s palm before letting them buy or sell bitcoins for cash.
A small group of hardcore users also generate extra bitcoins by “mining” for them – a process that requires computers to perform the calculations needed to make the digital currency work, in exchange for a share of the built-in inflation.
Mining is a time-consuming and expensive endeavour due to the way the currency is designed. Each subsequent bitcoin mined is more complex than the previous one, requiring more computational time and therefore investment through the electricity and computer hardware required.
• In August, Germany recognised bitcoin as a “unit of account”, allowing the country to tax users or creators of the digital currency
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Career entrepreneur Peter Saddington bought a Lamborghini with part of his bitcoin holdings as the price exploded to a new all-time high in the first two weeks of October. And not only was he able to purchase the Lambo with bitcoin, he got away with only paying $115 for the supercar.
Also Read: Humble Bundle Is Selling Popular Bitcoin Books for $1
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Today, Bitcoin is all over the news, seemingly hitting a new record high every other day. But at one point in time, one bitcoin only cost a couple bucks. This where Saddington’s fortune comes into play.
Road to the Bitcoin Lamborghini
A life-long entrepreneur, Saddington had taken on multiple ventures, many of which were unsuccessful. Bitcoin, though, ended up being the best invesment decision he ever made.
Saddington admits it to be a lucky investment, having bought his first bitcoin way back in 2011. When he bought in, the bitcoin price was $2.52. In a youTube video telling his story, Saddington said he made the investment without much thought, and didn’t really check up on it until 2014 — when bitcoin hit $250.
It was then, he said, that he realized the potential of cryptocurrency. And he’s been 100% behind bitcoin ever since.
“It is a great technology for a great investment and it really is the future of money,” Saddington said in his video.
A $20 Million Lambo? Treat Yourself
Come October 2017, and Saddington’s cheap investment from 2011 had earned enough profit to allow him to purchase the Lamborghini. Rather than selling his coins at an exchange and buying the car with fiat, however, Saddington made the entire purchase with bitcoin.
Based on what he paid for the bitcoins in 2011, Saddington said his car only cost around $115. Profit from the skyrocketing bitcoin price took care of the rest.
He bought the car in despite the Bitcoin Lambo memes warning against buying a car with the rapidly-appreciating bitcoin. Saddington acknowledged that his purchase may end up costing him $20 million in the future as bitcoin’s value goes up. “But sometimes you just have to reward yourself,” he said.
A long time in the making, Saddington recalls the years leading up to his Lambo purchase. He said he had looked into buying a Lamborghini in the past — without bitcoin — but his wife shot him down. She told him Lamborghinis were too “gangster rap,” and that he should buy something more tasteful.
Saddington’s consolation prize was nothing to sneeze at, however. Instead of the Lambo, he bought an Audi R8, and proceeded to put so much money into the car that he could have just bought a Lamborghini outright, he said.
A few years later, after a precious moment involving a friend’s Lamborghini and their young son, Saddington received his wife’s approval as he looked at a Lambo he could buy with bitcoin. The rest is history. According to Saddington, he became the first person ever to buy a Lamborghini with bitcoin, earning his car the name, “Bitcoin Lambo.”
Another Step Towards the Moon
While Saddington may be the first Lambo owner to purchase the supercar with bitcoin, he isn’t the first to celebrate his investment success in an extravagant way.
In 2013, an anonymous Bitcoiner used the cryptocurrency to purchase a Tesla Model S from a dealership in Newport Beach, California that had recently started accepting bitcoin as payment. CNN Money reported that the man purchased the car for $103,000, equivalent to 91.4 bitcoins at the time. News of the purchase went viral, after which the dealership said it received around 10 calls from people interested in buying a car with bitcoin.
Today, that 91.4 bitcoin Tesla is worth $536,370.
What’s the most expensive thing you’ve ever bought with bitcoin? Let us know in the comments.
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