How one guy's $24 investment in bitcoins turned into an $886,000 payday

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This story is based on a radio interview. Listen to the full interview.

Audio Transcript:

Marco Werman: You've heard us talking about bitcoins before. A few weeks back, I think we successfully explained what bitcoins are all about. They are digital currency used for online transactions and they are decentralized, which means that their value is not tied to a central bank, like the Fed. Think digital poker chips. The concept was introduced in 2008. One year later, Kristopher Koch bought just around $24 worth of the digital currency. Koch is an engineer based in Oslo in Norway and recently he had a really pleasant surprise: he discovered that his 24 bucks had turned into a whopping $886,000. Nice. But Kristopher says the value of his bitcoins was so low originally, he almost forgot he had them.

Kristopher Koch: Yeah, I think the value when I bought them was like 0.04 or something dollars each. And today, I don't know, like $200 today.

Werman: When did you realize just how much your purchase had risen in value?

Koch: It was April this year. It was in the media, they mentioned that it was rapidly increasing in value, so it dawned on me that I had something like this.

Werman: So you made this investment in 2009 and then after that you just kind of ignored the value of bitcoins and just kind of sat there online.

Koch: Yeah, I was going on with my life, finishing my master's thesis, and getting a job and doing my job. It was kind of in this struggle to find this [inaudible 01:30] file which proves that I can use these coins.

Werman: Right, that's kind of a nail biting episode here. You almost didn't get any of your investment back. Explain that.

Koch: Yeah, I found a file which I had stored online in a safe place, but being a bit paranoid I had encrypted this file. I don't know, do you remember your passwords from four years ago?

Werman: Yeah, I know that's always a tough one. So you didn't remember your password for the investment of those $24 worth of bitcoins a few years ago.

Koch: I think I had like 12 hours of crying in finding what was this, not only password, but pass phrase, so...

Werman: Did you find a piece of paper with it written down or did you just kind of try and divine it?

Koch: Yeah, no, it came to me in a silent room.

Werman: Kristopher, do you think a decentralized currency will continue to have traction or will it even maybe increase as we head into the future?

Koch: Maybe it won't be bitcoin or whatever, but the idea is out, so everyone can understand how it works and implement something like it or better improve it.

Werman: So let me ask you the real question here, which is now you've kind of got some money in the bank, what are you going to roll that back into, another smart investment?

Koch: No, I'm a technical guy. I don't think money makes you happy, but it can buy you an apartment.

Werman: It can also buy you a nice meal. Did you celebrate?

Koch: Yeah, multiple times.

Werman: Okay, good, at least there's a little payoff, isn't there?

Koch: Yeah, there is. It's a good story to tell.

Werman: Kristopher Koch, engineer and now successful bitcoin investor, speaking to us from Oslo.