A Delicious Slice of the History of Bitcoin and Investment
TL;DR
Laszlo Hanyecz exchanged 10,000 bitcoins for two large pizzas on May 22, 2010. That purchase has been commemorated as Bitcoin Pizza Day. This article explores the implications of Bitcoin Pizza Day for life-changing wealth and calorie reduction.
On May 22, 2010, Laszlo Hanyecz, a programmer and early Bitcoin enthusiast, exchanged 10,000 Bitcoins for two large pizzas. Back then, the price of $0.0041 per Bitcoin seemed fair, making the exchange worth roughly $41 for the pizzas. To say that the price of Bitcoin has increased since then is an extreme understatement. On November 8, 2021, the price of Bitcoin reached an all-time high of $67,566.83 per Bitcoin. By simply shifting the decimal, we can see that the Bitcoins Hanyecz spent that day have been worth as much as $675,668,300.
As I write this, the current price of Bitcoin is $26,350, having been as low as $15,476 as recently as November 2022.
I've shared the story of Bitcoin Pizza Day with many people, expecting them to draw what, to me at least, seems like an obvious conclusion. However, their responses have astounded me. It's usually some variation of "What an expensive pizza. That guy really wasn't very bright. I would never do something like that."
So, you may ask, what conclusion did I expect people to draw from the tale of Pizza Day?
Over the past 13 years, anyone could have turned even the most modest of disposable incomes into life-changing wealth.
Is this still true today? Well, yes and no.
While the price of Bitcoin has skyrocketed, it has never been a safe short-term investment. Exchanging money that you might need next week, next month, or even next year for Bitcoin has always been a risky gamble. Bitcoin purchased on November 8, 2021, was worth less than a quarter of its peak value a year later.
On the other hand, Bitcoin held for four years has always more than doubled in price. In fact, it has usually increased far more than double its price. Don't take my word for it. Just zoom into any four-year period on the Bitcoin/U.S. dollar chart at Trading View and see for yourself: https://www.tradingview.com/chart/IjOPJ8oT/?symbol=BITSTAMP%3ABTCUSD . It's amazing, isn't it?
I can't predict the future, but I see no reason to think that the spectacular growth of Bitcoin's price over all four-year periods will end anytime soon. It will probably take more than 13 years to turn the price of two large pizzas into life-changing wealth, but why not forego a few calories and find out?
I am not an investment professional, and this isn’t investment advice.