From $27 To $886,000 In Four Years: Name The Investment

Tyler Durden's picture

Not Tesla, Not Apple, Not Netflix...

 

 

Via The Guardian,

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.

 

...

 

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.

 

...

 

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.

 

...

 

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.

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James_Cole's picture

"If only I'd dropped a c-note..."

max2205's picture

That shit never happens to me. 

CH1's picture

That shit never happens to me.

With Bitcoin, it's happening to the good guys for a change.

One And Only's picture

When the individual becomes the bank there is a liberation that is like discovering sex for the first time.

Quus Ant's picture

Damn.  What coin shop are you going to? 

Can I get the address?

knukles's picture

About that $27 I loaned you....

gold-is-not-dead's picture

Ah, finally, some good words and almost no fud in zh comments regarding btc.

Ahmeexnal's picture

So BitCoin ponzi is fully endorsed by the Koch extended brothers. Not a surprise, as BitCoin is a creation by none other than the teutonic uber-bankers, the red shields (whose real name is another, quite common in the teutonic empire).

icanhasbailout's picture

Spot the bubble...

 

Oh wait, this bubble is popular on ZH.

trembo slice's picture

I disagree.  OR, I believe there needs to be a distinction in what I see as two types of bubbles: there is the "tulip-mania" explanation given in school, which, ultimately, seems like mass-hysteria, fad-seeking, perhaps Bitcoin... AND, asset bubbles that develop as a result of policy.  Sept. 10, 2003, Dr. Ron Paul had this to say to the House Financial Services Committee: 

"The special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they coult not attract under pure market conditions.  Like all artificially created bubbles, the boom in housing prices cannot last forever.  When housing prices fall, homeowners will experience difficulty as their equity is wiped out.  Furthermore, the holders of the mortgage debt will also have a loss.  These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing."

Bubbles form from credit expansion coupled with policies designed to steer resources into industries that "they could not attract under pure market conditions."  I can't imagine policies are in place to steer resources into BitCoin.

I'm not sold on BitCoin.  Pretty jealous of this guy, that's for sure.  I'd still rather have my savings in gold/silver.  Might be fun to ride the fad as the incompetent baffoons at central banks around the world grind sovereign currencies into oblivion.  I just think it may be a "bad bet."  Not a bubble in the same context as housing, student-loans, derivatives, etc... wherein government and central bank policy is directing resources via interest-free money, bail-outs, QE, etc. 

gold-is-not-dead's picture

Many people still don't believe what's happening with the new global currency, while it in shadow conquers the market. if you still feel uncertain, all I can say is that you are wasting time. Everyone who doesn't own btc will loose money, nothing else.

Ignoring its hyper-deflating properties is a loss in every aspect. No fud or hate will change its HYPER-deflating properties. And it goes to 8 decimals, so pick your target in this situation where every fiat is inflating and gold is being manipulated.

trembo slice's picture

Not hating on BitCoin.  Just trying to draw a distinction between bubbles fueled by mania/hysteria and bubbles blown by policies.  IF BitCoin were  a bubble it would be the first type, not the second.

What do you mean by hyper-deflating properties?  I'm literally just above the ignorance level of my dog when it comes to BitCoin.

 

gold-is-not-dead's picture

simply speaking, as the opposite of hyper inflation properties of fiat...

wouldn't go anywhere near comparison btc with tulip/ponzi… even though it shows scary looking similarities it fails to comply in one, perhaps the major one, ponzi's and tulips never reflate in real life…

with this new protocol you can hold international "no limit debit card" in your head, for many still hard to comprehand, uniformly benefficial and advantageous…

RideTheWalrus's picture

They worked out they can sell the beanie babies without having to produce them.

 

lickspitler's picture

That Silver bubble at $50 burst pretty hard.

Retronomicon's picture

Is that because being the bank is like screwing, except you get to screw everyone?

Confused's picture

Sooooo, all this about BC being in a bubble aside, what are the tax implications? Say I invested $27, and sold them for $800,000, does the US gov tax the balls off me? How do they view it? Long term investment? Do they even have rules for this? Or better said, would they even know? (apart from the NSA) 

SilverSavant's picture

Silly rabbit, you pay the same rate as you do on silver profits.

malikai's picture

So, you mean he pays nothing?

Either the dude pays cap gains or he sits on it.

From what I read, he bought a house with it. Not bad for a $30 outlay.

N2OJoe's picture

Bitcoin = Anonymous so what did you buy in at?

Idk about you but I'm taking a $1 loss...

And it acutally says he bought a house with 1/5 of them.

Stackers's picture

Rhodium eat your heart out.

flatbush71's picture

Bitcoin bitches

Give me my money !!

dcohen's picture

Any one dealing in bitcoins will have a banker's bullet with their names engraved on it.

CH1's picture

Bitcoin IS bullets being shot through bankers.

icanhasbailout's picture

Don't blame me if you don't properly anticipate the day when some programmer at Goldman Sachs figures out how to spend the same Bitcoin in two places at once with latency exploits or some other malicious technique.

CH1's picture

And don't blame me if a thief finds your stash, or a Fed beats it out of you or steals it from a vault where you were sure it was safe. There is always risk in life.

The insanity of these comments is that they make it an either-or.

BOTH BTC and Phyzz are good!

gold-is-not-dead's picture

Yes, please, I beg banksters to put a bullet in my head because I participate in the btc protocol, I went through three wars and I'm not even thirty years old.

But I don't think that is true. Since I started taking profits in fiat on my bank account, due to my actions with bitcoins, my banker offered me better treatment. I got gold card, personal 24/7 service, and it leveled up my ratings with them in every aspect.

Schmuck Raker's picture

You sound like an idiot. Pay attention....

EVERYBODY'S name is on the bankers' bullets.

gold-is-not-dead's picture

Schmuck, this is one of the best comments I've read. If I may add that we're not talking about bullets, but rather banksters naval carriers which are backing the dolar today.

PETRODOLAR - backed by naval carriers

BITCOIN - backed by math

 

2+2 will always be 4 and ships can sink.

TheHound73's picture

meh, its only a 3.2 million % return on investment.

putaipan's picture

feels toto keiser fer me around here fer me , too too.  et tu francis?

http://www.rense.com/general96/saving.html

One And Only's picture

I was skeptical of bitcoin at first.

End of last year I did a lot of research and became a believer. I love bitcoin.

To those who are skeptical: research it. It's pretty amazing once you start understanding it.

msohn's picture

I agree that Bitcoin seems like a great idea, but like all currencies, convertibility is key.

What happens if you are no longer allowed to enter marketplaces to transact? That rate at which Bitcoin gains acceptance would likely be offset by government restricting access to it.

One And Only's picture

It's peer-to-peer.

All you need is a buttonwood tree to sit under. The electronic exchanges are convenient but not necessary.

The convertibility is universal, you can trade bitcoin for whatever currency you want to exchange for it. It's traded globally. Buy a bitcoin in the US and go to Europe; sell the bitcoin for Euro's (with $1 dollar or $1,000,000) it fits on a thumb drive. You can always buy goods/services with bitcoin, more and more vendors are accepting bitcoin every day.

malikai's picture

Bitcoins are not considered a 'monetary instrument' anywhere yet. Therefore, the $10k threshold on customs declaration (USSA) does not apply.

Also notable, your average TSA employee (read: University of Phoenix Online graduate) doesn't know wtf a Bitcoin is. But he/she sure knows what gold is. And he/she'll have a hard time getting their hands on the 'can't touch it, don't own it' Bitcoin.

Phil Free's picture

Germany has:

Germany's ministry of finance has formally recognised the digital currencyBitcoin as a "unit of account" which can be used for private transactions – meaning that the ministry will now be able to tax users or creators of the four-year-old virtual money. [ http://www.theguardian.com/technology/2013/aug/19/bitcoin-unit-of-account-germany ]

 

"Germany's move does mean that people who have speculated in the online cryptocurrency could be liable for capital gains taxes if they sell them less than a year after acquiring them."

CH1's picture

Meet an OTC dealer at your local Starbucks!

TeMpTeK's picture

Right now Bitcoin is currency... if the govts of the world criminalize its convertibility to cash , bitcoin then becomes money... Either way they lose.

 

Groundhog Day's picture

I know it's safer then the digital banking system, but i just don't trust the criminal banksters to sit by and let bitcoin takeover their monopoly.  They will emp that shit before letting it go mainstream

Lore's picture

BTC is acceptable to purveyors of imaginary media of exchange. It can be centralized; it can be tracked; it can be taxed; it can be controlled, directly or through proxies. Case in point: announcement today on Canadian national news of BTC ATMs.  BTC is "acceptable" because, like an ETF, it diverts capital from investment in real things. Anything that postpones the populist move into tangible money is "okay."

One And Only's picture

BTC can definitely be tracked. Anyone can examine a wallet and even see how much is in that wallet. 

Who owns the wallet is a different story. No one knows who owns any wallet and no one ever will. It takes 5 seconds to change a wallet address if you're paranoid.

Lore's picture

Yeap. It only matters when the time comes to use it. No advantage there. Again, any sort of token that delays the populist move into real money is "okay." It's a wonder that the Chinese and Indian governments don't push bitcoins. Oh wait, no it's not...

One And Only's picture

"Yeap. It only matters when the time comes to use it."

I can spend or send bitcoin WITHOUT anyone knowing it was me. The only thing that can be seen is that the transfer occured, that's it.

Deo vindice's picture

Hmmm. Sounds like using cash. (which I do)

One And Only's picture

It is like cash. But unlike dollars it is backed by something; MATH.

F-Tipp's picture

He means this - in the event of the economic collapse that is coming, how can you be guaranteed to be able to transact in bitcoin? You cannot guarantee this, as bitcoin exits as data only. Yes, this is a positive aspect today. But what about tomorrow? What happens when the internet is interrupted (at any level) by .gov? Or your hard drive fails? Or a business doesn't want to deal in currencies that exist as data only?

Please don't get me wrong, I think bitcoin is useful in helping people to understand the fucked up system we have, and it's been an excellent investment vehicle for those that got in on the ground floor. However, I don't think it is right to advocate that people abandon other currencies (or real money) and transition to bitcoin for these reasons.