THE ACCIDENTAL MILLIONAIRES OF THE BITCOIN REVOLUTION

The Accidental Millionaires Of The Bitcoin Revolution
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THE ACCIDENTAL MILLIONAIRES OF THE BITCOIN REVOLUTION



Written by Oscar Henson
30 Tuesday 30th May 2017

No matter how many times we experience vast shifts in our relationship with technology, we remain surprisingly bad at seeing them coming.

When the internet first launched in 1991, it was seen as a revolutionary platform for the dissemination of academic research and information. Later, when Mark Zuckerberg went public with Facebook, its total target market was thought to be the Ivy League schools and higher education institutions of the Boston area. And when I was a teenager, MySpace was widely accepted to hold the future of the music industry in its hands. In every case, we turned out to be sorely, sorely mistaken.

Likewise, when the term ‘Bitcoin’ entered the public lexicon at the turn of the decade, it was largely written off as the chit-chat of cyber-geeks, conspiracy theorists and stoned libertarians. To mainstream society, the idea of an anonymous internet currency mined directly from computer servers sounded like a bad science fiction novel, and the media generally treated it as such. 

Since then, the digital currency has exploded. City banks are trading in it. Governments don’t know what to do with it. What was once predicted to be a quirky artefact of the internet era has now established itself as the fastest growing currency on the planet: according to a recent report, a $1000 domestic Bitcoin investment made in 2010 would now be worth $35 million

Unsurprisingly, the drastic fluctuations in exchange rate that have come to define the Bitcoin revolution have made some people – quite accidentally - very, very rich indeed.

Earlier this year a man from California made himself an accidental millionaire overnight in the process of buying a new house. The seller of the $4 million property had requested that the transaction be made using the digital currency – a request that the bemused buyer reluctantly agreed to. As requested, he converted $4 million into Bitcoin, only to find that the exchange rate rocketed overnight, leaving him with an accidental $1.25 million profit on top of the asking price.

And he was not the first to stumble on a fortune. Back in 2009, Christopher Koch – a Norweigian student with an interest in encryption and zero investment experience – bought 5,000 Bitcoins on a whim for a total of $27. His girlfriend scoffed, and they forgot all about it – until 2013, when the currency began hitting headlines once more. Struggling to remember his login details, he eventually managed to access his forgotten account, only to find that the off-hand investment made 4 years previously was now worth close to $1 million. He withdrew one fifth of the investment and bought an apartment in Toyen, one of the most affluent areas in Oslo. Assuming he kept the rest, by today's rates the remainder of his investment will now be worth over $5 million.

Of course, most of us aren’t using Bitcoins to purchase houses or make off-the-cuff investments. Amongst younger audiences, Bitcoins are good for one purpose and one purpose only: purchasing high grade narcotics at a fraction of street price from the safety and comfort of your living room. And if you place a highly volatile currency in the hands of a generation of stoned teenagers, at some point you’re bound to see some interesting results.

For example, Dan: a 24-year old student from North London, who used Silk Road (the now defunct first-wave Darkweb marketplace) to buy a few grams of Moroccan hash back in 2011. At the time, the exchange rate was roughly $1 per coin. After the transaction, a few Bits of ‘change’ lay forgotten in his wallet - where they remained until, in 2013, he rediscovered them. What had been a few dollars worth was now worth over $1000. He sold up there and then, and – we assume – had a proper decent Summer of it. Had he held on a few years longer, his accidental investment could have gone on to pay off his entire student loan.

So, if you’ve ever exchanged money into Bitcoin – for a house purchase, or a humble gram of Super Silver Haze – it might be worth double-checking your Multibit wallet. What was once considered loose change might now be enough to retire on. 

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