Many people have lost some data while reformatting a computer hard drive. Jered Kenna lost more than that. In 2010 he erased from his computer 800 Bitcoins that haveCrypto-tycoon: Roger Ver invested his life savings in bitcoin. Every time you spend bitcoins to buy a drink at Evr, a swanky bar in midtown Manhattan that accepts the digital currency, you make its co-owner, Charlie Shrem, just a little bit richer.
And that’s not only because a chamomile sour costs $17 (or 0.16 bitcoins). It’s because whenever someone new uses bitcoins, the electronic currency’s value tends to increase.
Shrem has bought thousands of bitcoins for about $20 each, starting in 2011.
Since then, the digital coins have soared in value to $109. That’s turned the 23-year-old into a millionaire and into one of a handful of early bitcoin investors who’ve decided to sink their windfalls back into the bitcoin economy, starting their own companies and investing in others. “Infrastructure is what we need,” says Shrem. “We’ve gotta build, build, build–financial software, exchanges, and different payment products.” In addition to his investment in the bar, Shrem founded Bitinstant, afalseThe astronomical rise in the value of bitcoin—which has surged more than 8,000 percent over the course of 2013—has created a new breed of digital currency multimillionaires. The 34-year-old Roger Ver began investing in bitcoins in early 2011—and made his first million from the virtual currency that same year—which saw prices skyrocket from around $0.30 to $32 before settling at $2. He bought his first bitcoins at around $1. (Read more: Bitcoin s surge due to excess liquidity : Faber ) With prices currently hovering above $1,000, his virtual wealth has since exploded. Ver says he doesn t feel richer but that his wealth is much more liquid than it would be in a normal bank account. Ver is one of hundreds of investors that have struck it big with bitcoin. But his association with the virtual currency extends far beyond just owning it. He has helped seed about a dozen different businesses involving bitcoin and actively promotes the currency, earning him the nickname Bitcoin Jesus. IEarly adapters of Bitcoin have made an absolute killing in just a few years with Bitcoin trading at more than $120 and as of November 2013, the prices jumped as high as US$1200.
Some analysts have predicted it could rise to as much as $100,000 per Bitcoin.
A few short years ago Bitcoin was 5 cents, just $10,000 invested then is now a $150 million fortune. By April 2013 there were around 250 e-wallets with more than $1million worth of Bitcoins, which means there were over 250 Bitcoin millionaires, that has now jumped to thousands and we just saw our first Bitcoin billionaire. Will Bitcoin completely replace our current systems of currency? The history of currency is fraught with countless tales of boom and bust as wars, politics and events such as the Global Financial Crisis impact. Many don’t trust the current world monetary system controlled by the Central Banks and want to see a new honest transparent monetary system. This is why Bitcoin was created. Will it succeed before ourCan t tell a bitcoin from a blockchain? Read our explainer to see how the cryptocurrencyMany people have lost some data while reformatting a computer hard drive. Jered Kenna lost more than that. In 2010 he erased from his computer 800 Bitcoins that have been worth more than $200,000. Kenna isn’t upset: He has plenty more. He says he bought his first batch of virtual currency, 5,000 coins, at 20¢ each. On April 10, Bitcoins traded for as much as $258 each, according to Tradehill, a Bitcoin exchange in San Francisco, before plunging more than $100. Like other enthusiasts, Kenna shrugs off the volatility. While he won’t disclose his total holdings, he says, “I’m happy to be considered a member of the Bitcoin millionaires’ club. ” Created four years ago by a person or group using the name Satoshi Nakamoto, Bitcoin is a virtual currency that can be used to buy and sell a broad range of items—from cupcakes to electronics to illegal narcotics. The surge in a Bitcoin’s value has made millionaires out of people who loaded up on them early on—however briefly. Many of them are.