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Bitcoin exchange rate increase gave investor £551,000 from £17 stake

Do you have a spare £17? Sounds like a stupid question because pretty much everyone reading this post will have access to £17. Well, one investor who had a spare £17 four years ago now has a spare £551,000 thanks to his investment in bitcoins. The massive windfall for Norwegian Kristoffer Koch is pretty unprecedented. He invested 150 kroner (£17) in 5,000 bitcoins in 2009 after finding out about the internet currency while writing an essay on encryption.

After that he forgot about his little investment until media reports surfaced about the digital currency earlier in the year. Bitcoins are a currency secured in encrypted wallets that can only be accessed with a private key. Mr Koch had forgotten his password but he eventually remembered it and was amazed by how much money had been made from such a small investment.

“It said I had 5,000 bitcoins in there,” Mr Koch said. “Measuring that in today's rates it's about NOK5m (£551,000).”

In April 2013, the currency hit a peak of £165. Later in the year it crashed to £30 before rising to the £122 rate it’s selling at now. The lucky Mr Koch sold around 1,000 shares and had enough to enough to purchase an apartment Toyen, a wealthy part of Norway's capital city.

To buy bitcoin you normally contact an “exchanger”, although money laundering laws are making this difficult. The user then withdraws the money by sending the bitcoins back to the exchanger in return for cash.

It seems that bitcoins are set to become a part of the international community’s normal currency trading activities as in August 2013, Germany started to recognise bitcoins as a “unit of account” which allows them to be taxed. In London, the Pembury Tavern in Hackney has started to accept them as currency, and in Vancouver the world’s first bitcoin ATM has just gone online.

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