The famous pizzas from Laszlo Hanyecz’s May 22, 2010 Bitcoin Pizza Day purchase
For Bitcoiners, May 22 – known as Bitcoin Pizza Day – is a day for feasting.
Today, Bitcoin fans around the world are savoring pizza to celebrate Laszlo Hanyecz’s famous pizza order on May 22, 2010. On this day 15 years ago, Hanyecz – an early Bitcoin developer and miner – paid another early bitcoin adopter 10,000 BTC in exchange for two large Papa John’s pizzas. This marked the first real world purchase of any good with the cryptocurrency, which was barely a year old at the time.
Laszlo Hanyecz’s original Bitcoin Pizza Day post on May 18, 2010. His request was fulfilled by … More
Bitcoiners observe this greasy, bitcoin-themed simulacrum of Thanksgiving with commiseration as much as celebration, because those 10,000 BTC are now worth more than $1 billion.
But what most people don’t realize is that Hanyecz may have spent as much as 79,000 BTC on follow-on pizza purchases that year, a sum that would be worth more than $8.7 billion today. And lost still in the gobsmacked reactions to the billion-dollar forfeit is the question: how did Hanyecz acquire all this bitcoin in the first place?
“I spent it all on pizza”: The Story of the Unknown Bitcoin Pizza Day Purchases
When I interviewed Hanyecz back in 2019, he mentioned that he spent nearly 100,000 BTC on pizza in 2010. He didn’t think anything of the trades at the time.
After all, bitcoin was next to worthless then, and Hanyecz noted that Bitcointalk users – a popular forum then as now for Bitcoin discussion, and the site Hanyecz used to facilitate the original Bitcoin Pizza Day purchase – would give away bitcoin to newcomers by the hundreds or thousands.
Laszlo isn’t bitter about the ordeal. He described it as though he “was winning the internet that day” because his “hobby bought [him] dinner.”
In fact, he was so pleased by the trade that he kept the offer open from May 22 until August 4, 2010, after which point he posted on Bitcointalk, saying, “I can’t afford to keep doing it since I can’t [mine]
thousands of coins a day anymore.” (More on why he couldn’t later).
In the same post, he thanked “everyone who bought [him] pizza already,” so ostensibly he made additional pizza purchases between the May and August window.
Fast forward four years, Hanyecz wrote about his erstwhile bitcoin fortune in another post. “I spent it all on pizza,” he said, with a link to the bitcoin address listed in his first ever Bitcointalk post to prove it.
The wallet shows that Laszlo sent over 79,000 BTC from the day it was created on April 10, 2010 through August 4, 2010, the day he closed his open offer to trade bitcoin for pizza. The wallet now ironically holds only enough to purchase a large pizza with the current BTC-USD rate, and it was effectively drained of its last significant bitcoin holdings in June 2011. The wallet’s total outflows amount to a little over 81,432 BTC.
Where Did Hanyecz Get All Of The Bitcoin For Bitcoin Pizza Day?
In 2009 and 2010, Bitcoin’s block reward was 50 BTC per block (plus transaction fees), and since bitcoin blocks are mined every ten minutes on average, this means that Hanyecz’s 81,432 BTC fortune represented roughly 1.5% of all mined coins at the time. So how did he amass this stash?
Hanyecz was a prolific developer in Bitcoin’s early days. Not only did he design Bitcoin’s first MacOS client, but he also was the first person – beside Bitcoin’s pseudonymous creator, Satoshi Nakamoto – to discover that bitcoin miners could generate new coins with graphics cards (GPUs).
Hanyecz advertised his discovery in May 2010. Before this, bitcoin miners used their laptop or desktop computer processing unit (CPU) to mine bitcoin, but GPUs upgraded them with 10x more computing power to generate new bitcoin.
The discovery opened the floodgates, and the computing power that secured the bitcoin network increased 1,300-fold by the end of 2010. Ironically, the increase in competition is the very reason that Hanyecz could no longer generate “thousands of coins a day” as he opined in the August 2010 Bitcointalk post.
Bitcoin’s hashrate exploded following Bitcoin Pizza Day legend Laszlo Hanyecz’s discovery of GPU … More
Was Bitcoin Pizza Day The Consequence of Laszlo Hanyecz’s Correspondence With Satoshi Nakamoto?
With Pandora’s box opened, Hanyecz’s discovery also elicited a polite reprimand from Satoshi Nakamoto himself. As detailed by Nathaniel Popper in his book Digital Gold, “Satoshi had mixed feelings” about this early introduction of GPU mining, which the Bitcoin creator seemed to have anticipated.
Satoshi emailed the following to Laszlo:
A big attraction to new users is that anyone with a computer can generate some free coins. When there are 5000 users, that incentive may fade, but for now it’s still true. GPUs would prematurely limit the incentive to only those with high end GPU hardware. It’s inevitable that GPU compute clusters will eventually hog all the generated coins, but I don’t want to hasten that day. If the difficulty gets really high, that increases the value of each coin in a way since the supply becomes more limited. The supply is the same: 50 coins every 10 minutes. But GPUs are much less evenly distributed, so the generated coins only go towards rewarding 20% of the people for joining the network instead of 100%. I don’t mean to sound like a socialist, I don’t care if wealth is concentrated, but for now, we get more growth by giving that money to 100% of the people than giving it to 20%. Also, the longer we can delay the GPU arms race, the more mature the OpenCL libraries get, and the more people will have OpenCL compatible video cards. If we see from the difficulty factor that someone is using too much GPU, we can certainly pick this OpenCL stuff up again then. Maybe my effort to maintain GPU innocence is running out of time. It’s worked out so far.
And with that, we’re left with a burning question: Did Hanyecz divest himself of his bitcoin fortune as a form of absolution for hastening Bitcoin’s mining centralization?
Only Hanyecz knows the answer, but he’s unlikely to tell it since he rarely (if ever) gives interviews anymore. After all, why should he when the topic at hand – Bitcoin Pizza Day – is a constant reminder that he traded a future, multi-billion dollar fortune for pretty mediocre pizza?
