One day in May 2010, Laszlo Hanyecz, a 28-year-old Hungarian-born software programmer, exchanged 10,000 bitcoins for the delivery of two large Papa John’s pizzas. The coins, given bitcoin’s value at the time, cost him $41.
Hanyecz wanted to demonstrate that bitcoin, a form of digitized money that was only a year old, could be used in the real world, for routine transactions. Unlike traditional currencies, bitcoin enabled users to make payments under a pseudonym, without the involvement of a central bank – a feature that money launderers, drug traffickers, and online scammers were quick to take advantage of. But it remained uncertain whether cryptocurrencies could live up to their promise as currencies, achieving the same stability and ubiquity as government-backed money.
Papa John’s delivered Hanyecz’s pizzas. But 11 years later, with bitcoin hovering above $32,800, the programmer’s order proves the exact opposite point that he was trying to make. If Hanyecz spent the same number of bitcoins on pizza today, it would cost him $328 million. Bitcoin has turned out to be far too volatile to serve as a reliable medium of exchange.