Forgotten £15 Bitcoin Investment Earns Norwegian Man £552,000 in Four Years
By Alistair Charlton | October 30, 2013 4:25 AM EST
A Norwegian man who bought $24 (£15) worth of the virtual Bitcoin currency in 2009 has used the coins to buy an apartment, as they have appreciated by more than $880,000 (£552,000) in just four years.
Kristoffer Koch bought 5,000 Bitcoins in 2009 after discovering the digital, decentralised currency while researching for a thesis on encryption.
Widespread media coverage of the currency's boom and bust earlier this year reminded him of his digital wallet, and after logging in he found his coins to be worth $866,000. Koch cashed in a fifth of his wallet to buy a three-bedroom apartment in Oslo, Norway, he told local news site NKR.
Must Read: What is Bitcoin and how does it work?
Bitcoin had piqued Kock's interests due to its encryption which makes paying with the currency almost untraceable.
Mined by computers solving complex mathematical equations, there are currently 11.8 million coins in circulation worldwide, and although its anonymity made itself the currency of choice for traders on drug and firearms market place Silk Road, Bitcoin can be used to buy anything from pizzas to up-market escorts.
When Koch made his investment each coin was worth less than one cent, but a growth in popularity and media coverage lead to a boom in April this year, driving the price up to $266 per coin, before crashing in a matter of hours to $110. Just a year earlier, coins were worth less than $20 each.
Silk Road effect
The value of Bitcoin fell in early October when the Silk Road website was closed down and its alleged owner Ross Ulbricht was arrested - but the currency soon recovered, climbing from around $130 to more than $208 at the time of publication, suggesting its users see a future beyond that of online drug and firearms dealing.
This summer, the US Senate took the first steps towards potential Bitcoin legislation, when a committee launched an investigation into the currency to better understand "threats and risks" associated with it.
In August, the German Finance Ministry ruled Bitcoin is a "unit of account" in the same way conventional currencies like pounds, dollars and euros are.
London-based Bitcoin exchange opens for business
Despite the digital currency not yet being classified as legal tender in the UK, a venture capitalist-backed Bitcoin exchange called Coinfloor has opened for business in London, priding itself on strict anti-money laundering practices.
Users initially from the UK and Europe can create accounts at Coinfloor from 29 October and trading will begin on 5 November. In a bid to distance itself from Silk Road and other illegal marketplaces, Coinfloor is engaging with the UK's Financial Conduct Authority and Europe's Payment Services Regulations.
Co-founder and CEO Mark Lamb told Wired: "We believe users and traders deserve a trustworthy [Bitcoin] exchange on which to conduct their business. From the start, we've been committed to building and operating Coinfloor as a fully-compliant and professional financial services company and we look forward to helping to establish Bitcoin as a mass market asset."
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