Bitcoin Pizza Day: The story behind how a $25 takeaway appreciated to $20m

In was a warm and sunny Florida day in May 2010, and computer programmer Laszlo Hanyecz decided he had more bitcoin than he knew what to do with. The so-called cryptocurrency was less than two years old, but despite a loyal and growing bunch of enthusiasts praising its technology in dedicated forums, it was almost worthless. Each virtual coin was worth less than half a cent and with nothing to spend them on, Hanyecz's computer was producing thousands every day, feeding them into a bulging online wallet.

On 18 May Hanyecz posted on the bitcointalk forum to say, as an experiment, he would pay 10,000 bitcoins for two large pizzas delivered to his house. Hanyecz wanted to perform the first ever real-world purchase of goods using bitcoin.

Hanyecz typed to the nascent 100-member forum: "I'll pay 10,000 bitcoins for a couple of pizzas. Like maybe two large ones so I have some left over for the next day...you can make the pizza yourself and bring it to my house or order it for me from a delivery place".

Four days later, a Californian teenager called Jeremy Sturdivant agreed, ordering the pizzas online and having them delivered to Hanyecz's house.

Given the pizzas cost $25 (£19) and the bitcoins were worth $41, Sturdivant felt he'd got something of a bargain; soon after, he passed them on for around $400, happy with a healthy return on his impromptu investment.

Hanyecz didn't really care for the coins; he was producing thousands every day for the cost of his computer's electricity and would repeat the pizza stunt several more times that month.

But within a few weeks, bitcoin's value was on the up and his charity pizza payments were now worth hundreds of dollars, so he stopped.

Within a year, Bitcoin's value had reached that of the US dollar, putting the pizzas at $10,000, and due to the way bitcoin works Hanyecz's mining efforts were slowing down. The more bitcoins mined, the more computing power (and time) needed to extract them. Before long, home computers – even powerful gaming rigs – could not mine effectively. Professional miners built entire warehouses to extract the rapidly appreciating digital gold.

Bitcoin's value rose and fell violently over the coming years, as more people invested and businesses began accepting the currency as a legitimate form of payment – and online drug dealers basked in its near-anonymous nature.

The price of bitcoin increased so quickly that, in February 2014, Hanyecz said he knew of one recipient of his pizza bitcoins who bought a house after converting the coins into dollars at an online exchange.

'It was a great deal at the time'

Writing on the bitcointalk forum in 2015, Hanyecz said: "I was pretty happy to trade 10,000 coins for pizza. I mean people can say I'm stupid, but it was a great deal at the time. I don't think anyone could have known it would take off like this."

By 2015, five years after the pizzas were bought, a pot of 10,000 bitcoins was worth $2.4m, then a year later this had increased to over $4m. But since then – and since the start of 2017 in particular – the value of bitcoin has exploded, from $830 per coin in early January to $2,190 at the time of publication.

On the 7th anniversary of the first real-world bitcoin purchase, those pizzas would have been worth $22,509,958.

It isn't clear if Hanyecz still uses bitcoins; his last message on the bitcointalk forum, on 19 February 2014, read: "I generated my share and I spent it, it was just at a time when the value was lower". The bitcoin wallet used to buy the pizzas has had over 81,000 bitcoins pass through it, but currently has a balance of just 0.0001 bitcoin.