Why Bitcoin Pizza Day matters

1. The relevance of Bitcoin Pizza Day
2. Looking at other key crypto milestones
3. Bitcoin Pizza Day as folklore

May 22nd 2010 will forever be immortalised in the crypto world as Bitcoin Pizza Day, after Laszlo Hanyecz traded 10,000 bitcoins - today worth $616,247,000 - for two Papa John's pizzas. Aside from reminding us of the most expensive meal in history, why is Bitcoin Pizza Day still relevant, and what other crypto events rank alongside it?

Bitcoin Pizza Day 

By trading 10,000 bitcoins for two Papa John’s pizzas, Laszlo Hanyecz gave away coins that are now worth over $600 million. At the time of the trade, the coins had a worth of $47. In retrospect, this may seem like the worst trade deal of all time, but it simply tells us about the nature of Bitcoin. 

Bitcoin is fundamentally an ongoing experiment. It is speculative. In 2010 no one could have predicted where Bitcoin would be today with any certainty. Many early investors sold their coins when the market peaked in 2011 and made what at the time seemed like a decent  profit. If they had hodled however, many would-be bitcoin billionaires today. 

Bitcoin Pizza Day not only serves as a powerful reminder of how much Bitcoin has grown over the years, but also helps us understand that it remains a speculative investment. A lot will need to change for it to become a widely used form of money to challenge the likes of the US Dollar, Euro or Yen - learn more about how crypto can function as money here.

Like with most investments, there are no guarantees that the future will behave like the past, and whilst Bitcoin growth over the last decade has been exponential, no one knows for sure how it will play out over the next decade.

Each time someone has declared a market top over the last decade, Bitcoin has eventually risen to smash through it. Time and time again hodling has proved to be the prudent position and Bitcoin Pizza Day is the ultimate reminder of that. 

What other big events can help us understand the crypto world and give an insight into where it might be heading? 

Ethereum ICO

The Ethereum project was initially funded by an ICO back in 2014. 7 million ether was sold in the first 12 hours of the sale amounting to a value of $2.2 million. By the end of the sale, more than 50 million ether was sold, amounting to about $17.3 million. This showed that people believed in the power of Ethereum and were willing to back that belief with their money. 

Somewhat controversially at the time, 9.9% of ether was set aside for Ethereum’s founding team, and an additional 9.9% was allocated to the nonprofit Ethereum Foundation. This feature, which is sometimes referred to as a pre-mine, set a precedent that was later adopted by many other ICOs. 

Some argue that a pre-mine risks centralising a cryptocurrency with insiders who participate being able to manipulate prices and influence governance decisions. Vitalik Buterin, the co-founder of Ethereum, however, responded to these criticisms on Twitter in 2018 saying “I personally am really proud to have helped set the precedent of small premines being legitimate.” 

This ICO not only validated Ethereum as a viable project that people believed in, but also set the mould for future crypto projects being built and launched like companies, albeit in a more progressive community-driven way. 

Ethereum has now grown into one of the biggest and most successful implementations of crypto and it doesn’t look like stopping anytime soon. 

The Beeple Auction 

When digital artist Beeple sold his work EVERYDAYS: THE FIRST 5000 DAYS online for $69,346,250 it was certainly a landmark for crypto, digital art and NFTs. Created over a period of 13 and a half years the collage was the first purely digital art ever offered at auction at Christie’s. 

Realising over $69 million is itself an incredible achievement but this sale also showed that NFTs are a crypto tool that can be used in the real world. Since this sale, thousands of creators have started employing the use of NFTs with many being very successful. 

The key takeaway here is that people are willing to spend money just to prove that they own something that is otherwise freely accessible in its original form and to prove a chain of provenance; NFTs facilitate that. This is an example of crypto technology helping creators get paid directly for their work and long may it continue. 

It’s an exciting time to be a creator right now and music/art distribution is quickly becoming one of the biggest areas of development and innovation in crypto. For more on this check out our articles “Unwrapping NFTs” and “How NFTs Might Revolutionise The Music Industry”. 

First lightning payment 

Back in 2017, software developer Alex Bosworth revealed that he successfully completed the first lightning bitcoin mainnet (not a testing environment) transaction.

Bosworth paid his own actual phone bill with no fees and a transaction that executed instantly. The Lightning Network uses micropayment channels to scale the bitcoin blockchain’s capability by processing transactions more efficiently.

Since 2017, Lightning Network usage has grown substantially. Cryptocurrency exchange Bitfinex processed 12,000 transactions on the Lightning Network in February 2021 alone. 

The Lightning Network now has more than 10,000 nodes and is a key part of the Bitcoin value proposition. As Bitcoin has become increasingly valuable, it has become a more attractive store of value. 

With more Lightning Network capability and adoption, Bitcoin will also become a more effective Medium of Exchange. The combination of these two things means that Bitcoin could really be shaping up to be the money of the future.  

CBDC Trials

Central Bank Digital Currency trials are becoming ever more popular around the world with an estimated 80% of the world’s central banks researching the subject. 

Largely inspired by cryptocurrencies such as Bitcoin, CBDCs differ as they are issued by a central authority and inherent the characteristics of analogue fiat money - such as no supply cap. Most CBDCs are still in an R&D  phase, but countries in Asia such as China, Japan and Thailand have launched their own trials. 

There are many proposed benefits to CBDCs including more efficient tax collection, safer payments, crime prevention, and more capable monetary policy transmission.  

On the other hand, many crypto enthusiasts feel that CBDCs represent a centralised threat to the ideals of decentralised currencies such as Bitcoin and Ethereum. In theory, CBDCs could allow Central Banks to add or remove funds from a person’s account with the flip of a switch, since they would be the central authority in control of the currency’s ledger. 

China is said to be keen to push forward development after initial trials of the Digital Yuan and with Bitcoin and Ethereum becomingly increasingly adopted in the West these two sides could end up in a competition for the new dominant reserve currency of the world. 

CBDCs could allow Central Banks to add or remove funds from a person’s account with the flip of a switch, since they would be the central authority in control of the currency’s ledger. 

ETH 2.0 

Eth2 refers to a series of upgrades to the Ethereum platform that are currently being worked on. The three main objectives of these upgrades are increased scalability, security and sustainability. These objectives are being achieved in two main ways, the introduction of sharding and the migration to a new consensus mechanism known as proof-of-stake.

The project announced its proposed roadmap for the development of ETH2.0 at the end of 2020 with the upgrades set to be rolled out over the next 2 years. As of April 2021, the project has close to $9 billion worth of Ether staked for the Ethereum 2.0 upgrades. The project has reached all of its staking targets so far and so development is set to follow the proposed roadmap. 

A new Staked ETH Trust is now giving institutional investors the option for direct exposure to ETH and the ability to earn 8% in annual interest from staked rewards. With the amount of Eth already staked and ever more interest from institutional investors, it’s certainly an exciting time for Ethereum. ETH 2.0 could just be the next crypto milestone that sees Ethereum deliver on its promise of truly scalable world computer supporting whole new verticals alongside DEFI and NFTs.. 

Bitcoin Pizza Day As Folklore 

 The crypto world has come a long way since Bitcoin Pizza Day in 2010 to the point that an event just twelve years ago is already considered folklore. 

From ICOs to NFT auctions to CBDC development and now the promise of Layer 2 and institutional investment, crypto is a diverse and growing ecosystem with each of these boasting their own special histories and milestones capable of rivalling Bitcoin Pizza Day in terms of significance.

More than anything, he the lesson of Bitcoin Pizza Day is that it is probably wise to not bet against crypto  but second-guessing exactly what comes next in such a fast-moving space is futile - just hodl. A lesson from some of the milestones covered in this feature is that in whatever future form, crypto is here to stay, and likely to have a growing an impact on the world for generations to come and you should consider grabbing a slice.