If you owned a share of an experimental technology, how much of it would you give up to help that technology grow? Startup founders do this calculus whenever they raise capital. Ten years ago today, a developer named Laszlo Hanyecz did it with bitcoin.
Hanyecz is known as the first person to use bitcoin in a commercial transaction. On May 22, 2010, when bitcoin was a little over a year old, he bought two pizzas for 10,000 BTC. The day is now known as “Bitcoin Pizza Day.” With one bitcoin now worth $9,500, this is apparently a joke and Hanyecz’s $45 million pizzas are the punchline.
The joke is also a parable, illustrating the competition and interplay between three potential uses of bitcoin. The first is speculation. Bitcoin’s nosebleed-inducing decade of upward price movement is what drives CNBC headlines and motivates participation: People see it as a way to get rich. “Bitcoin is a way to harness greed,” said Hanyecz in a recent interview from his home in Jacksonville, Fla. It’s greed that underpins the delicate balance of incentives that keeps bitcoin running.
Hanyecz understands that balance well, having been a contemporary of bitcoin’s pseudonymous founder, Satoshi Nakamoto (he says they messaged a few times), and an early bitcoin miner who tinkered to mine more efficiently and earn more bitcoin.
“Speculation” is sometimes treated as though it were not a legitimate use. It is, and it has been, an important part of bitcoin’s DNA from birth. Even U.S. Federal Reserve Chair Jerome Powell has spoken respectfully of bitcoin’s role as a “speculative store of value.”
The volatility that makes bitcoin attractive to investors also makes it difficult to use as money, or “electronic cash,” as the Bitcoin white paper specifies. Hanyecz’s solid-gold pizzas show us that if CoinDesk paid me in bitcoin, one of us would likely get rekt.
Or would we? Hanyecz works for apparel brand GORUCK as a…