You've probably already heard about it: 11 years ago, two pizzas were bought for the sum of 10,000 Bitcoin. If you haven't, don't worry, here we explain Bitcoin Pizza Day and what happened on 22 May 2010.
The very first sale of a physical asset in Bitcoin!
This event was named Bitcoin Pizza Day to celebrate this very special purchase in Bitcoin. What's more, it also marks the very first sale of a so-called 'physical' good using a virtual currency, Bitcoin. Like all new currencies, from its inception Bitcoin was only used as a currency of exchange with other currencies. More specifically, with fiat currencies such as the dollar, euro, yen, pound, etc. It was from this key moment that this revolutionary virtual currency gained in value, and its popularity has only increased since then.
The birth of Bitcoin Pizza Day
The purchase was made between Jeremy Sturdivant, an 18-year-old student from California, and Laszlo Hanyecz, a 28-year-old developer from Florida. The exchange began with a simple advert posted by the latter on an exchange forum called Bitcointalk. Here's a short extract from what he posted that day: "I'll pay 10,000 bitcoins for two or three pizzas… like maybe two large ones so I have some left over the next day. I like to have leftover pizza to nibble on for later". Laszlo was already involved in the Bitcoin code when it was created in April 2010. In fact, he was one of the pioneers who developed the mining technique using GPUs. The major player in the project has also deployed numerous mechanisms to enable mining using these GPUs.
The purchase of two pizzas in crypto
His announcement went unanswered for several days. Despite this, he relaunched his little project on the website. He also continued to develop his project, in particular through exchanges on IRC to detail the processing of the operation. It was then Jeremy, under the pseudonym "jercos", who contacted Laszlo and accepted his offer. Jeremy delivered two pizzas straight from Papa John's to Laszlo's home for the full price of 10,000 Bitcoins. At the time, these two pizzas were worth around $36. This photo was taken just after Lazslo received the pizzas. This legendary photo marks the very first time that individuals were able to buy pizzas using Bitcoin.
Pizzas sold during Bitcoin Pizza Day
Following this incredible sale, Laszlo Hanyecz said: "Being able to exchange [Bitcoins] for a pizza was extremely cool. […] Nobody thought it was going to be this big".
The consequences of the historic sale
2011: the creation of specialist platforms
After that, the consumption of Bitcoin grew and reached more and more beginners in the cryptocurrency sector. This led to the development of platforms and sites specialising in the sale of digital assets. These have made a major contribution to the widespread use of cryptocurrencies for these quick and easy purchases.
One example of this is the participation of the Mt. Gox platform. It was the first decentralised marketplace for trading Bitcoin. Unfortunately, the company declared bankruptcy in 2014 following a major hack. The consequences were far-reaching, with the hacking causing the total loss of its customers' funds. Nevertheless, as a pioneer in the sector, Mt. Gox gave the crypto's many new customers more credible BTC prices.
Marc Karpelès and Roger Ver were the next big names. They gradually made it possible for businesses to use the common currency. This is how Bitcoin came to be accepted by businesses as a means of payment for their services.
Also in 2011, Ross Ulbricht used the sale to expand his business. This time it was on the dark web that he developed his marketplace called Silk Road. It was a great success, at least for the first two years of its life.
2012, widespread commerce
Very exactly, on 12 November 2012, the WordPress company entered this market by accepting payments in Bitcoin. WordPress is known for being the largest website hosting service. This is how the company managed to develop BitPay, its payment processor. What's more, on 22 November 2013, CheapAir.com, the travel agency was thus introduced to its payment types. On 9 January 2014, a new BitPay enthusiast also joined the initiative. This was Overstock.com, a colossal e-commerce platform in the United States in particular.
In addition to all these major companies and platforms interested in Bitcoin, hundreds of thousands of small businesses around the world are taking part in the spread of this commerce. This time independent and decentralised, these businesses accept crypto payments one by one. In Paris, for example, there is a whole shopping street in which the owners have all adopted Bitcoin as a means of payment.
This generalisation of commerce is beneficial for both parties. Both for Bitcoin, which is institutionalising and internationalising its currency, and for the shops, which are boosting their business. What's more, they reach more and more potential users of the services and the currency itself. Finally, customers also benefit from this system. They can buy all the pizzas they want for a very long time to come!
The limits of widespread BTC trading
However, the adoption of cryptocurrencies by businesses has been gradually reduced and restricted. This is due to the blockchain protocol, which was unable to keep pace with the growing demand. Transactions were taking longer and longer to process, and the fees were far too high. So unsuited to small, everyday purchases, the Bitcoin network was quickly weighed down. What's more, the currency was not so widely used by the general public. As a result, merchants offering this type of service were spending more than they were earning.
For the general public, Bitcoin was no longer seen as a currency for exchange and quick purchases, but as a stored reserve currency. Even today, enthusiasts and newcomers to the crypto sector are generally encouraged to invest in Bitcoin, rather than use it as a regular currency. The big problem with using Bitcoin at the moment is the volatility of the currency, the time and cost of transactions and government regulations.
Encouraging initiatives like Bitcoin Pizza Day
Many people today point out that Laszlo would have benefited enormously if he had invested his Bitcoin instead of buying it. It's important to understand that it's thanks to Laszlo's purchase of the two Bitcoin pizzas that the currency has been able to grow so much. Small transactions in Bitcoin are now more than necessary to avoid losing the large cryptocurrency. It is therefore more than necessary for Bitcoin to resolve the issues that are holding users back.
