“Pizza Day” is the anniversary of the first known payment for a physical product in bitcoin.
The payment was made on 22 May 2010, when Laszlo Hanyecz bought two pizzas at Domino’s in Jacksonville, Florida, and paid 10,000 BTC.
The following year, Bitcoin began celebrating this anniversary with the so-called “pizza day”. Today is the tenth time this has been celebrated, eleven years after that initial day.
The Bitcoin protocol was published by Satoshi Nakamoto on 31 October 2008, but the first 50 BTC were only created on 3 January 2009.
At the time, not only were they worthless, but there was no way to exchange them for fiat currency, and no one accepted them as a means of payment.
Throughout 2009 only very few people owned bitcoin, usually mined by themselves, and they began to spread very slowly across the dark web as a way of exchanging value.
2010 was the breakthrough year, both because the first payment for a physical product was made in BTC, on 22 May, and because in the following months the first exchanges allowing people to buy and sell bitcoin in fiat currency emerged.
Pizza Day, what are the 10,000 bitcoin worth?
In May 2010, those 10,000 BTC with which Hanyecz paid for the two pizzas were worth about $43, while today they would be worth more than $400 million.
It is not known what the pizza place owner did with those 10,000 BTC, but it is likely that he had already sold them, or lost them. However, by the following year, 2011, their average value had already risen by 7,241%, although it fell by 43% in 2012.
In fact, in 2009, although there was no known market value, it seems that it took an average of around $0.005 of electricity to mine a single bitcoin, so the cost of 1 BTC was about that.
By contrast, in 2010 the average market price over the course of the year had already risen to around $0.2, or forty times the previous year’s cost of mining, and in 2011 it went as high as $16, before dropping to $9 the following year.
In practice, when Hanyecz paid $43 for pizzas in BTC he probably took a loss, because the exchange rate was lower than the average cost of mining. Moreover, if instead of spending it on buying the pizzas he had traded them on an exchange a few months later, he could have earned fifty times as much. Suffice it to say that the earliest known exchange rate at which a bitcoin/fiat currency swap took place on an exchange is about $0.05, which is more than ten times the rate at which Hanyecz exchanged his 10,000 BTC for two pizzas.