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Norwegian Man Forgets About $26 Bitcoin Investment, Makes $850,000

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An offhand $26 investment in bitcoins has turned into an $850,000 windfall for one very lucky Norwegian man.

According to Norwegian news outlet NRK, Kristoffer Koch decided -- on a whim -- to invest 150 kroner (about $26) in 5,000 bitcoins in 2009, soon after the Bitcoin network first came into existence. Koch is said to have discovered the virtual currency while writing a thesis on encryption and decided to put down a small investment out of sheer curiosity.

Unaware of just how successful bitcoins would soon become, Koch says he promptly forgot about his digital stash; that is, until a flurry of media coverage about bitcoins caught his attention earlier this year.

Koch reportedly had to scour his memory for the password to the encrypted wallet that held his investment. When he finally figured it out in April, he says he was stunned by what he found.

"It said I had 5,000 bitcoins in there. Measuring that in today's rates it's about five million kroner," Koch told NRK, according to a Guardian translation.

That's about $850,000.

Gizmodo points out that Koch's small initial investment is worth even more today. With a single bitcoin currently priced around $210, Koch's investment would be worth more than $1 million.

Koch isn't the only person who has benefitted from the rise in bitcoins' worth and popularity. According to an April report by Bloomberg Businessweek, the success of the world's first decentralized, peer-to-peer digital currency has spawned many overnight millionaires.

“I’m happy to be considered a member of the Bitcoin millionaires’ club," 30-year-old Jered Kenna told the news outlet. Kenna reportedly bought his first batch of bitcoins -- 5,000 of them -- at 20 cents each.

But investing in the virtual currency is not without risk.

"Make no mistake, this is no different than any other high-tech stock. It's risky, it's volatile, and you should not invest any more than you are prepared to forfeit all together," an anonymous Bitcoin miner told a blogger for The Huffington Post in May.

Do you understand how bitcoins work? This infographic by Confused explains in simple terms what Bitcoin is and how it works:

2013-07-22-abeginnersguidetobitcoins.png

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