Top 6 and a Half Insane Moments in Bitcoin History

June 22 by Stephanie Tan

Since bitcoin was introduced 8 years ago, some pretty crazy things have happened. While the cryptocurrency used to be seen as a currency for drug dealers, it’s now being embraced by the mainstream. But let’s not forget the good, the bad, the ugly and the downright daft moments in bitcoin history…

1. A $27 investment turns into a million

In 2009, a Norwegian student named Kristoffer Koch discovered bitcoin when he was writing a thesis on encryption. He decided to buy some bitcoins for fun and then promptly forgot about them. That is, until the value of bitcoin started to soar and hog news headlines in 2013.

Suddenly remembering his investment, Koch had to work out the password to the encrypted wallet that held the bitcoins.

When you forget your password and there’s no option to reset…

Once he was able to unlock it, he found that he was sitting on a fortune. The 5,000 bitcoins he had bought for $27 several years ago were now worth about $886,000. He cashed in a fifth of his bitcoins to buy an apartment in a swanky part of town.

Koch’s girlfriend had initially scoffed at his decision to spend real money to buy fake money. Now, according to him, he’s allowed to buy whatever he wants. We’re pretty sure he’s got a Get Out of Jail Free card for life!

2. A $26 million pizza order

In 2010, a developer named Lazlo Hanyecz made the first ever purchase with bitcoin. He bought two pizzas for 10,000 bitcoins – a quantity that would be worth some $26 million today.

But before you start chastising Lazlo for his stupidity, it’s worth keeping in mind that 10,000 bitcoins were only worth $40 at the time. “No one knew it was going to get so big,” he would later tell media. In addition, no mainstream retailers accepted bitcoin as a legit form of payment then. So Lazlo had to strike a deal with a Bitcoin forum member, trading his bitcoin in exchange for the pies.

And that is probably the costliest meal Lazlo will ever have in his life…

 When pizza just feels like a slap in the face now…

3. Black market bitcoin bust

The infamous Silk Road,considered the first modern darknet market, popped up in 2011. It was known as the “eBay of drugs” but PayPal wasn’t the favoured payment method… Instead, all transactions were conducted using bitcoins so buyers and sellers could stay somewhat anonymous. (It makes it a lot harder for authorities to “follow the money trail,” as they say.)

In 2013, the FBI shut down Silk Road and arrested its kingpin, who was known by his pseudonym, “Dread Pirate Roberts.” They seized his bitcoins, along with bitcoins from accounts on the illegal marketplace.

The news of Silk Road’s bust led the price of bitcoin to crash 22% in just a mere three hours. But fortunately, its recovery was just as rapid.

4. Biggest bitcoin heist in history

Based in Tokyo, Mt. Gox was once the world’s largest bitcoin exchange. At its peak, it was handling more than 70% of all bitcoin transactions worldwide. But in 2014, the company imploded in epic fashion. It was discovered that nearly half a billion worth of bitcoins had gone missing from its accounts. For the full, juicy story, read Bitcoin Heist: The Mt. Gox Meltdown.

 5. First big bank accepts bitcoin

In the early days of bitcoin, most banks viewed cryptocurrencies with wariness. Not only because of their link to criminal activity but because they posed a threat to the banks’ own business. (Although it must be pointed out that banks have been keen to adopt blockchain technology, on which bitcoin is based.)

But Barclays was an early trendsetter, becoming the first major UK bank to accept bitcoin in 2015. It was kind of a big deal at the time: a traditional bank enabling customers to receive bitcoin payments directly in their bank accounts. You know what they say – if you can’t beat them, join ‘em!

Join the dark side, we have bitcoin…

6. Man accidentally made $1.3 million while buying a house

In an interview with Bloomberg Markets, Bitpay’s CCO told a fascinating story about how a man bought a house with bitcoins – and unintentionally made money in the process.

The bitcoin payment processor was approached by a real estate developer who had received an offer to buy a house. The only catch? The buyer wanted to pay in bitcoin. Bitpay was familiar with these kinds of transactions so they walked the developer through it. Finally, both parties struck a deal for the property for around $4 million.

The bitcoin price was at $750 when the transaction began. But by the end of the transfer, it had soared to over $1,000! So basically, the buyer made a million-dollar profit on the exchange from bitcoin to U.S. dollars. Not only did he get a house for 25% cheaper, he apparently used the leftover cash to buy a Lamborghini. Making money from a purchase? Yes, some people have all the luck.

 When your new house comes with a little something extra…

6 ½. Fork in the road for bitcoin

Bitcoin has a scaling problem: it’s taking longer for transactions to go through, while fees are getting higher. Two solutions were proposed, one of which was called the ‘hard fork.’ This would essentially split bitcoin into two – an unprecedented event that would cause major volatility. The other solution is called SegWit but not everyone in the bitcoin community is behind it. The deadline for deployment of SegWit is August 1. Who knows, fears may just be overblown and August 1 could end up being a rather uneventful day…Or could it actually be bitcoin’s day of reckoning?! Oh, the suspense!

Stuck between a fork and a hard place…

Written by

Stephanie Tan

Nomadic wordsmith who has dabbled in public relations, media and now, casual trading. She may not have a head for numbers but she enjoys doing cyber-sleuthing on companies and loves being immersed in all things tech. Connect with her on BUX: @Stephtrades

Disclaimer: All views, opinions or analysis expressed in articles are that of the author and do not represent the views of BUX. Neither BUX nor the author provide financial advice and these articles should not be construed as such.

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