23rd May 2022 - 5 min read
The Bitcoin community has been celebrating a day known as Bitcoin Pizza Day every 22 May, and this year is no different. But what’s the big deal with this day, and what significance does it really hold? As it turns out, it’s a “tradition” that celebrates a historic moment just as much as it is a celebration of irony.
Well, first, the story: 12 years ago on 22 May, a man from Florida named Laszlo Hanyecz spent 10,000 Bitcoin at a local restaurant, Papa John’s to buy himself two pizzas – making him the first person to perform a “real-world” transaction with the token. Understandably, this has now earned him a spot in the history of cryptocurrency, and it is also why 22 May is now famously known as Bitcoin Pizza Day.
To note, Bitcoin was only a little over a year old back in 2010, and was worth only approximately US$0.0025. Today, the token has gained fame as digital gold, with its value reaching over US$68,000 at one point (in November 2021). While the cryptocurrency is no doubt a volatile asset – as you can see via events such as the Crypto Crash in 2021, and more recently, in 2022 – investors’ sentiments are generally quite positive, with many hanging on for the long haul.
After that initial transaction, Hanyecz – who is also a Bitcoin developer who contributed to the growth of the cryptocurrency with his codes – would go on to make several more pizza purchases with Bitcoin. In fact, he’s said to have spent a total of 100,000 Bitcoin on pizzas. Speaking to CoinTelegraph in 2018, Hanyecz said that he had no regrets spending the money.
“You know, I don’t regret it. I think that it’s great that I got to be part of the early history of Bitcoin in that way, and people know about the pizza, and it’s an interesting story because everybody can kind of relate to that and be [like] – ‘Oh my god, you spent all of that money!’. I was also kind of giving people tech support on the forums and I ported Bitcoin to MacOS, and you know, some other things – fix bugs and what not, and I’ve always kind of just wanted people to use Bitcoin and buying pizza was one way to do that. I didn’t think it would get as popular as it has, but it’s gotten to be a really catchy story for people,” said Hanyecz.
Why is Bitcoin Pizza Day also a celebration of irony? Well, how much would Hanyecz’s BTCs spent on pizzas be worth today?
As shared earlier, the price of 1 BTC was only a fraction of a cent at US$0.0025 in 2010, which meant that the two pizzas purchased for 10,000 BTC were equivalent to US$25. Not too bad, considering those Bitcoins were probably mined at minimal cost and up till then had no real-world use.
Today, 10,000 BTC is worth… US$300 million.
Oh, let’s not forget that Hanyecz claimed that he spent a total of 100,000 Bitcoins on pizzas in total, which is worth a cool US$3 billion today. Or more than double that (around US$6.8 billion) at Bitcoin’s all time high price of around US$68,000 back in November 2021.
Back then, in crypto’s early beginnings, Hanyecz’s first cryptocurrency transaction marks a key moment in the narrative of decentralised finance (DeFi), signalling the potential of DeFi. In fact, it can be said that without those pizza transactions, the entire crypto landscape could have been vastly different. They were a successful proof of concept in how DeFi has a real-world solution.
In essence, DeFi seeks to democratise financial transactions by removing reliance on third-party intermediaries such as banks. This is done via a technology called blockchains running on decentralised networks of computers rather than a single server. Newer innovations such as smart contracts allow for more complex transactions to be completed. If those pizza transactions hadn’t occured, the accelerated speed of innovation in crypto in the years after may not have been possible.
In the years after Bitcoin was invented, many other tokens have also cropped up as the crypto community sought to create various real-world solutions through blockchain technology, with some of the better-known ones being Ether, Bitcoin Cash, and Ripple. Other altcoins that you may have heard of include Stellar, Cardano, Solana, and even meme-coins such as Dogecoin and Shiba Inu. As more and more digital asset exchanges crop up globally, “stablecoins” were also introduced to ease the process of purchasing tokens. A stablecoin’s value is fixed to another asset (often fiat money), enabling a non-volatile channel to invest in crypto.
With so much attention on cryptocurrency today – and DeFi in general – there is little doubt that there will be more innovation and developments to be seen in the near future. In the meantime, though, grab yourself a pizza and raise a toast to Laszlo Hanyecz for being the first use case of cryptocurrency.
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