Bitcoin Pizza Day 2018: How a $25 takeout is now worth $82 million

Bitcoin Pizza Day 2018: How a $25 takeout is now worth $82 million

May 22 marks the day when, in 2010, two pizzas were bought through a web forum for 10,000 bitcoins

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On this day, May 22, in 2010, Laszlo Hanyecz had more bitcoins than he knew what to do with them. The Florida-based computer programmer was an early adopter of the strange new 'cryptocurrency', which had emerged online 16 months earlier, but there was no means of spending it.

Created by a mysterious person (or persons) called Satoshi Nakamoto in the wake of the 2008 financial crisis, bitcoin was being mined (created using computer power) by a small group of web enthusiasts. Some believed it would become the new global standard for currency, a decentralized answer to the government-controlled dollar and euro; a way to anonymously transfer funds directly between two people. No banks, no middleman and no government control.

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Others curiously mined the coin with spare computers, unaware that each coin, then worth less than half a cent, had the potential to make them all unfathomably rich. Hanyecz's own computer was producing thousands of bitcoins every day, faithfully solving mathematical equations which authenticated the transactions of coins between other users on a public ledger called the blockchain, then depositing them into a digital 'wallet' on the hard drive.

Keen to make the first real-world purchase using bitcoins, Hanyecz posted on the bitcointalk forum, saying he would give 10,000 bitcoins to anyone who would deliver two large pizzas to his home. "I'll pay 10,000 bitcoins for a couple of pizzas," he typed into the 100-member forum. "Like maybe two large ones so I have some left over for the next can make the pizza yourself and bring it to my house or order it for me from a delivery place."

Four days passed until Jeremy Sturdivant, a teenager in California, took up the offer. Sturdivant placed a $25 order for two pizzas from a Florida pizzeria and, given how the bitcoins were worth $41 on the day, felt he had struck a great deal. The transaction of 10,000 bitcoins from Hanyecz to Sturdivant can be seen here.

Today, with each coin worth $8,000, it sounds like madness to spend 10,000 on pizza, but Hanyecz's stunt proved something important — that bitcoin held a value and could be used to buy real-world goods online, through a peer-to-peer transaction and without a bank.

Speaking to Bitcoin Who's Who Blog in 2016, Sturdivant said: "At the time I was certainly somewhat aware that this was setting a precedent for casual trade with bitcoin."

Two of several pizzas Laszlo Hanyecz bought for 5,000BTC eachLaszlo Hanyecz

Hanyecz would repeat the stunt several more times that month, but as bitcoin's value crept up — making the pizzas worth hundreds of dollars — he stopped. A year later, anyone who kept the 10,000 coins would have a digital wallet worth $10,000, as bitcoin's value matched the US dollar.

Over the following years, as many readers will know, the value of bitcoin rose (and fell) violently as the cryptocurrency was simultaneously praised as the future of finance and ridiculed for its use by illegal online gun and drug marketplaces, like the now-shuttered Silk Road.

Hanyecz returned sporadically to the forum thread he created over the following years. In February 2014, with bitcoin worth around $600 per coin, he claimed he knew how one recipient of his pizza coins had bought a house after converting the bitcoins into dollars through an online exchange.

A year later, he posted: "I was pretty happy to trade 10,000 coins for pizza. I mean people can say I'm stupid, but it was a great deal at the time. I don't think anyone could have known it would take off like this."

By 2015, the 10,000 coins were worth over $2 million, before doubling over the following 12 months.

This time last year, on 'Bitcoin Pizza Day' 2017, the coins were worth $22.5 million. Today, a year on and after a 12 months which saw bitcoin's biggest-ever rises and falls, 10,000 coins is worth just over $82.3 million, down from a record high of $193 million, set on December 17, 2017.

Hanyecz last posted on the forum thread in February 2014, saying simply: "I generated my share and I spent it." The bitcoin wallet owned by Hanyecz back in 2010 has had over 81,000 coins pass through it, but currently holds just 0.0004 of a bitcoin, worth approximately $3.30.

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