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I'm Investing In Bitcoins

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Backed by nothing, or rather they are backed by the idea that they are not backed by or reliant on any government. I feel they dream of becoming the "global" currency if/when the usual governments fall.... until a sexier one comes along.


Although the price has been steadily rising (last time I looked), IMO when it falls it will plummet, and bear in mind their "stock markets" or "banks" have been hacked a number of times - most recently this year.

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FOUR years ago Norwegian student Kristoffer Koch spent 150 kroner ($26.60) on a little-known internet currency called bitcoin.


It was 2009 and he was working on his thesis about encryption when he came across the mysterious currency. He bought some for fun, then forgot about it.


Fast-forward to April 2013, when the value of bitcoins started to soar. The internet currency received widespread media coverage, and Mr Koch remembered he had bought a few bitcoins years ago, NRK reports.


"I thought to myself, didn't I have something like that?" Mr Koch said.


He started searching frantically for his password, which he had encrypted. When he finally worked out the correct combination to unlock it, he found a very pleasant surprise.


"It said 5000 bitcoins there. Measuring that in today's rates it's about 5 million kroner ($885,520)," he said.


He cashed in about one fifth of his bitcoins, and it was enough for him to buy an apartment in Toyen, one of the richer parts of Norway's capital Oslo.


His partner was initially sceptical about him spending "real money" on "fake money". She has since changed her tune.


"She thinks I spend money on a bunch of crap. I buy a lot of technical little things that I never have time to use, and this was the worst of all, the fact that I was buying fake money," Mr Koch said.


And now?


"She says that I should be allowed to buy the things I want."


What are bitcoins?


Bitcoins only exist online. There are two ways to acquire them, the Herald Sun reports.


The first is to buy them on an online exchange, where a person can transfer local currency, such as Australian dollars, for bitcoins.


The second, and much more difficult way, is to "mine" them. This is by done by using a computer to solve a very complex equation. Once solved, the miner will receive a (virtual) handful of bitcoins.


After four years, there are about 11 million bitcoins in existence, and the technology has been designed so that the number of bitcoins that can ever be mined will be exhausted at 21 million.


But the currency is very volatile. At the start of the year, one bitcoin was worth $US13. By April it had rocketed above $US260, before swiftly crashing to $US100 on the same day. They are currently worth around $US195.





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