I was amused (and impressed) to read of the good fortune of a Norwegian man.
In 2009, Kristoffer Koch was doing research on encryption and on a whim decided to invest 150 Norwegian kroner [about US $25 at current exchange rates] in the recently created bitcoins, a means of payment over the internet.
Koch, now 29 and working as an engineer, only remembered the investment in April this year when he read an article about the soaring value of bitcoins.
His 5000 bitcoins were suddenly worth about €500,000 [about US $675,000].
After spending a full day trying to remember his password, Koch cashed in 1.1 million kroner [about US $179,000], by selling a fifth of his newly acquired fortune.
After deducting 28 per cent in taxes, the money was enough for the down payment and restoration of a flat worth 2.6 million Norwegian kroner [about US $422,000] in central Oslo, one of the world’s most expensive cities.
“Not in my wildest dreams could I have imagined that they would have soared like this,” Koch said.
There’s more at the link.
The impressive thing about the performance of his investment isn’t so much that bitcoins are worth so much more today than they were when he bought them . . . it’s that other currencies have depreciated so much against bitcoins! It reveals the decline in the value of world currencies very clearly, and should have all of us worried.
Bitcoins are, of course, purely a human invention and convenience, with no collateral backing them up. On the other hand, gold might be described as the same thing; it has no intrinsic value except that which human beings assign to it. If we were to decide tomorrow that gold was just another metal, but that rare earth minerals were now an investment commodity, the price of the former would collapse while that of the latter would skyrocket. On that basis, perhaps investing in bitcoins wasn’t quite so hare-brained an idea after all . . . at least, before the FBI took an interest in them (link is to an Adobe Acrobat document in .PDF format) and seized millions of them from a suspect. Nowadays, I’m not so sure any more.
Peter
It's nice to read a similar conviction to one of my earlier speculations. Money is a vastly powerful – and universally useful – tool that is entirely independent of the particular form or material it happens to be expressed in today/by us.
Money is an idea that permits a distributed network of exchange and communication entirely independent of other technology, political persuasion, physical locale or personal circumstance.
You're the first writer I've read that seems to have grasped that. Hurry up with the next book; now I have to buy them all to see if your imagination is as sensible* as your blogging.
(*a fairly direct correlation between agreement with me and whatever it was you said. :))
Sounds like he got out at the 'right' time!