Bitcoin

The crypto world is a strange place to be- we have expressions like ‘to the moon’ and ‘rug’, which are not really used anywhere else, and we hold celebrations on days like today- Bitcoin Pizza Day, on May 22.
Many of us probably already know the story.
In 2010, Laszlo Hanyecz paid 10,000 Bitcoins for two pizzas, representing the first real world transaction where Bitcoin was used to buy something in the real world.
<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/6c30134f938644bbbc517bb65c1e9cb5.jpg">

Hanyecz himself received quite a bit of fame in the years following this transaction. After all, while Bitcoin may have been worthless then, realities have since shifted, and even a single Bitcoin today can get you a fair bit more than two pizzas.
Despite the ridicule and countless calculations being performed to ostensibly show shortsighted Hanyecz himself was to pay for perhaps the most expensive pizzas to date, Hanyecz has stated multiple times that he does not regret making that transaction.
But who exactly is Laszlo Hanyecz? Aside from his reputation as the guy who spent 10,000 Bitcoins on pizza, what else is he known for?
The real Laszlo Hanyecz
10,000 Bitcoins is no small amount- even for the time. In 2010, the number of Bitcoins in circulation was just around 2 million, so 10,000 Bitcoins would account for 0.5% of the total supply.
For context, if someone had 0.5% of the world’s wealth today, they would have around 2.3 trillion US Dollars. Putting that into perspective, Apple, the largest company in the world by market cap, has a valuation of around US$2.54 trillion.
How did Hanyecz obtain this much Bitcoin? For one, he got in early.
He was so early in fact, that he actually contributed to Bitcoin’s code. Hanyecz is credited with being the first Bitcoin developer to release the Bitcoin mining code for the Mac OS, and some credit him with being the first person to realise that GPU mining rather than CPU mining was more efficient.
This discovery, as it turns out, meant that he was able to mine Bitcoin far more efficiently than other miners at the time, and allowed him to amass the 10,000 Bitcoins that were eventually used to pay for the pizzas.
Yet, this discovery itself also set off the arms race between miners for better equipment, in particular GPUs. What began as a simple realisation has led to price spikes for GPUs, specialised CPUs being developed for crypto mining, and much more.<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/e7950891f60945ac8ffdfb6a874724f7.jpg">
 Today, to have any reasonable chance of mining Bitcoin, miners now use expensive and energy-intensive mining rigs. Are we really sure that this is something to celebrate?
The original vision for Bitcoin was heavily focused on decentralisation and freedom from oppression. Are we so sure that Bitcoin today, with massive mining operations run by corporations and gatekept by high barriers to entry in the form of hardware costs is really something to celebrate?
Of course, this is not exactly something that Hanyecz should be vilified for. While he did discover the potential of GPU mining, the discovery itself was merely one part of the reason for the mining arms race. The miners themselves are also to blame for their escalation of the arms race, and for building more and more energy-intensive methods for mining Bitcoin.
And even if Hanyecz did not discover GPU mining, as some contend, someone else would have. Hanyecz may have been the first, but to suggest that he was the only one capable of discovering it and taking advantage of it is another. Case in point, Satoshi himself may already have been aware of GPU mining when Hanyecz notified him of the discovery.
As we can see, Hanyecz is not exactly the fool that many have portrayed him as- in fact he was a brilliant early adopter who was responsible for some of Bitcoin’s early developments. But history has a way of losing track of important details- and this is not the only time such details have been omitted at Hanyecz’s expense for the sake of a good story.
The truth behind the 10K BTC pizzas
Most of us probably think we at least know this story- that Hanyecz paid 10,000 Bitcoins to Papa Johns for two pizzas. In fact, Hanyecz’s twitter bio explicitly states “I am the person who bought the 10,000btc pizza 8 years ago. I am poor now.”
Admittedly, this story is mostly true- but again some details have been omitted.
Firstly, while Hanyecz did pay 10,000 Bitcoins and did receive two Papa Johns pizzas, Hanyecz did not pay Papa Johns 10,000 Bitcoins for two pizzas.
Instead, Hanyecz actually posted the request on the Bitcointalk forum, saying that he was willing to pay 10,000 Bitcoins for two pizzas, to anyone who was willing to fulfil the request. They were free to either make the pizzas themselves, or to otherwise acquire and deliver them to his doorstep.
<img src="https://academy-public.coinmarketcap.com/srd-optimized-uploads/6ef54ca4de384aca968b00c2662483f9.png">

You might also notice that Hanyecz posted this not on May 22, but on May 18. So where did the May 22 date come from?
May 22 is actually the day that another forum member, Jeremy Sturdivant, took up Hanyecz’s offer. Sturdivant was the one who placed the delivery order for Papa Johns to deliver the two pizzas to Hanyecz, and paid fiat currency to Papa Johns. In return, Sturdivant received 10,000 Bitcoins from Hanyecz.
So the transaction was not really as straightforward as is often told- Hanyecz didn’t pay Papa Johns 10,000 Bitcoins for two pizzas, but instead, paid someone else to order pizza to his house.
This story is a far cry from the commonly told story that a business actually accepted cryptocurrency as payment- and the true story was simply that two community members merely used crypto among themselves.
So why do we celebrate Bitcoin Pizza Day?
Bitcoin Pizza day is important not because it represents some huge milestone that the Bitcoin and cryptocurrency community reached, but because it is a time to look back on how far the community has come.
May 22 may not have been as monumental as many of us previously believed, but that shouldn’t stop us from celebrating its significance to us either way.
The reason we celebrate the founding of our countries, or our friends’ birthdays, or any victories in our lives no matter how small, is not because the rest of the world cares, but because we care- these events are important for those who celebrate them, and that is what matters.
But it is perhaps time to celebrate it in a way that better reflects the events that actually happened; It was not a moment of folly or short-sightedness that Hanyecz parted with 10,000 Bitcoins in 2010, but a decision made by one of Bitcoins’ most important developers; It was not the first crypto transaction involving real world goods and services, but it was a sign of the community’s bond and faith in the nascent cryptocurrency.
These milestones, no matter how inconsequential to others, are important to the early Bitcoin community, and that matters to us as the crypto community. That is, in itself, something worth celebrating.
Yes, those 10,000 Bitcoins are worth a fortune today- but we are missing the point if that is all we focus on when celebrating. There is still plenty else to celebrate: Hanyecz was a titan among early developers, and his contributions are significant to the early Bitcoin community. And how far the crypto world has come, with improvements such as smart contracts, NFTs, and tokenisation, is also something worth celebrating.
Let us reflect on these achievements, and on Hanyecz’s genius, rather than gloating about that time someone spent 10,000 Bitcoins on two pizzas- for to do so would be to miss the forest for the trees.

The real story behind Bitcoin Pizza Day- and the man who started it all

Coinlive

Other articles published on May 19, 2023

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