In was a warm and
sunny Florida day in May 2010, and computer programmer Laszlo Hanyecz decided
he had more bitcoin than he knew what to do with. The so-called cryptocurrency
was less than two years old, but despite a loyal and growing bunch of
enthusiasts praising its technology in dedicated forums, it was almost
worthless. Each virtual coin was worth less than half a cent and with nothing
to spend them on, Hanyecz's computer was producing thousands every day, feeding
them into a bulging online wallet.
On 18 May Hanyecz posted on the bitcointalk forum to say, as
an experiment, he would pay 10,000 bitcoins for two large pizzas delivered to
his house.
Hanyecz wanted to perform the first ever real-world purchase of
goods using bitcoin.
Hanyecz typed to
the nascent 100-member forum: "I'll pay 10,000 bitcoins for a couple of
pizzas. Like maybe two large ones so I have some left over for the next
day...you can make the pizza yourself and bring it to my house or order it for
me from a delivery place".
Four days later, a
Californian teenager called Jeremy Sturdivant agreed, ordering the pizzas
online and having them delivered to Hanyecz's house.
Given the pizzas
cost $25 (£19) and the bitcoins were worth $41, Sturdivant felt he'd got
something of a bargain; soon after, he passed them on for around $400, happy
with a healthy return on his impromptu investment.
Hanyecz didn't
really care for the coins; he was producing thousands every day for the cost of
his computer's electricity and would repeat the pizza stunt several more times
that month.
But within a few
weeks, bitcoin's value was on the up and his charity pizza payments were now
worth hundreds of dollars, so he stopped.
Within a year,
Bitcoin's value had reached that of the US dollar, putting the pizzas at
$10,000, and due to the way bitcoin works Hanyecz's mining efforts were slowing
down. The more bitcoins mined, the more computing power (and time) needed to
extract them. Before long, home computers – even powerful gaming rigs – could
not mine effectively. Professional miners built entire warehouses to
extract the rapidly appreciating digital gold.
Bitcoin's value rose and fell violently
over the coming years, as more people invested and businesses began accepting
the currency as a legitimate form of payment – and online drug dealers basked in its
near-anonymous nature.
The price of
bitcoin increased so quickly that, in February 2014, Hanyecz said he knew of
one recipient of his pizza bitcoins who bought a house after converting the
coins into dollars at an online exchange.
'It was a great deal at the time'
Writing on the
bitcointalk forum in 2015, Hanyecz said: "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, five years
after the pizzas were bought, a pot of 10,000 bitcoins was worth $2.4m, then a
year later this had increased to over $4m. But since then – and since the start of 2017 in
particular – the value of bitcoin has exploded, from $830 per coin
in early January to $2,190 at the time of publication.
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