Today, Bitcoiners all over the world are eating pizza—in offices, on couches, at their apartments and their houses. They’re not doing this because pizza is delicious. They are doing it because it’s a tradition, one that dates back to May 22, 2010, when one man made history by making the first “real world” purchase with bitcoin.
The Man Behind The Pizza
Ten years ago, a Floridian man named Laszlo Hanyecz, decided that he wanted a free lunch.
The young programmer was an early contributor to Bitcoin’s software when it was barely one year old. An active member of an even more niche community then, Hanyecz actually advanced Bitcoin mining in a significant way. He coded a program that made it possible for miners to mine Bitcoin using their computer’s graphics cards (GPUs), a more powerful method than using a computer processor (CPU), the original means of mining Bitcoin.
This was the first shell to drop in what would become an ever-increasing arms race for hash power on the Bitcoin network (what started with more powerful mining rigs with GPU mining would culminate in the massive, ASIC miner packed warehouse that dominate the mining industry today).
But most people don’t remember Hanyecz for his contribution to Bitcoin mining. They remember him for what his mining activity allowed him to do: purchase pizza with bitcoin.
The Million Dollar Pizza
“I’ll pay 10,000 bitcoins for a couple of pizzas … maybe 2 large ones so I have some left over for the next day,” Hanyecz solicited Bitcointalk, a Bitcoin-focused forum founded by the coin’s creator that was a watering-hole for discussion in the protean days of Bitcoin’s development.
“If you’re interested please let me know and we can work out a deal.”
One other Bitcointalk user, jercos, was interested and agreed: Hanyecz would pay him 10,000 bitcoin and he would order two large supreme pizzas for the Floridian.
One user cautioned, perhaps a bit poignantly in hindsight, that 10,000 bitcoin “is quite a lot,” or around $41 on one of Bitcoin’s first (and now defunct) trading hubs.
As Hanyecz told me a year ago over the phone, the price on some trading forum made little difference to him. After all, this was the dude who invented GPU mining; he was eating a meal he paid for with internet currency he generated by idling his home desktop.
In his mind, this wasn’t paying for anything; this was a free lunch.
“I wanted to do the pizza thing because to me it was free pizza,” Hanyecz explained. “I mean, I coded this thing and mined bitcoin and I felt like I was winning the internet that day. I got pizza for contributing to an open-source project. Usually hobbies are a time sink and money sink, and in this case, my hobby bought me dinner.”
“I was like, ‘Man, I got these GPUs linked together, now I’m going to mine twice as fast. I’m just going to be eating free food; I’ll never have to buy food again.’”
While the first transaction was completed on May 22, Hanyecz would go on to do it 9 or so more times and spend a total of 100,000 bitcoin on pizza that summer. He has to stop in August, though, because the network was getting more popular so he couldn’t “generate thousands of coins a day anymore,” according to a post in the original pizza thread.
It wouldn’t take long before Laszlo’s decision would become a point of great intrigue within the Bitcoin community. Not six months later, one precocious Bitcointalk user on the same thread would ask, “Will this eventually become the world’s first million-dollar pizza?”
The answer, of course, is yes—multiple times over. The 100,000 bitcoin Hanyecz spent on pizza in 2010 is worth $900,000,000 at the time of publication and was worth $2,000,000,000 at Bitcoin’s all time high.
This story, of course, has become a bedrock of the Bitcoin community’s lore. If you visit Hanyecz’s Bitcointalk post, for instance, you’ll see that it has been spun into a 70+ page lexicon of exclamations and reactions to the legendary pizza transaction’s rising price over the years.
Some of you may have known of this story already from this 60 Minutes episode, or from any of the many articles that mainstream and crypto media alike churn out at this time of year. Indeed, Bitcoin Pizza day has become a scandalous gaff to even those outside of Bitcoin.
The usual refrain goes something like, “Could you imagine being that dude who bought the pizza for 10,000 bitcoin? I bet he wants to kill himself lol.”
On the contrary, by the looks of last year’s 60 Minutes interview, he’s doing just fine. And besides, this facile perspective fails to acknowledge the basic fact that anyone at this point in time could have bought or mined bitcoin—so really, by this logic, everyone who didn’t acquire and hold bitcoin from 2010 on missed out on life-changing wealth.
But the mainstream “missed-out-on-millions” take also ignores the crucial other side of the story that we addressed here: that Hanyecz invented a more efficient way to mine bitcoin, so his surplus made the transaction a no brainer.
The slice was no more expensive then than anything else he could have purchased at that time; he just happened to do it in bitcoin. The gesture itself is worth a million dollars considering how fringe Bitcoin was, and yet, all we focus on is how much those bitcoin would be worth today.
Would we be doing the same if he used dollars? Probably not, but maybe we should. The cash used to purchase the pizzas has lost roughly 20% of its value over the decade, meaning it would cost about $6 more to buy the same amount of pizza today.
With the dollar’s decaying in mind, actually, maybe focusing on how much that 10,000 bitcoin would be worth today (when compared to the dollar) isn’t such a bad thing after all.