Once upon a time in the distant past—fourteen years and some change as I write this, an eternity in digital time—someone bought a pizza with Bitcoin. If you know much at all about crypto, hearing that someone spent Bitcoin on pizza sounds kind of crazy. The price of BTC (Bitcoin’s stock ticker symbol) has seen a meteoric rise to near-astronomical values compared to where it all started… but did anyone really know that would happen back in 2010?
I should have held on to mine but I lost a bit in 2022 when it went up then way down. Now it's back up. But I really don't trust crypto. Seems too... Perfect if the government got into it. And what better way to play it than make it seem counter-government... I worked at Chainalysis doing crypto analytics and based on that, I did a deep dive on it a while ago.
I think the degree to which I trust any investment varies. Crypto could be compensated by governments, but I think that becomes really, really hard with BTC. Still, I'm nowhere near tech-savvy enough to be at the vanguard of this conversation, much less seriously trying to buy and sell crypto in any meaningful way.
Thinking about the concept, on the other hand? It's delightfully complex and nuanced, and I really enjoy it.
Never bought any cryptocurrency, but I have people in my friend circle and distant family that are into crypto. Allegedly, my wife's cousin ended up making a decent chunk of money on the early Bitcoin price rises.
I did, however, buy plenty of mediocre pizzas in my life. My sole consolation is that I'd never paid hundrends of millions of dollars for them.
Pizza pricing is really interesting to me, because I've been aware of it for my whole life. I worked in a pizza shop when I was 17, kinda my first "real" job where I worked legally for someone else. A slice of NY style cheese pizza was $1.77 with tax, and pepperoni was $2.19. These slices were an eighth of a 16" pie, so not trivial in size, and very very good. I was spoiled from an early age with authentic pizza.
The crazy thing is that you can get deals on Donimo's today (not great pizza per se, but amazing fast food pizza) for under $10 for a medium pie (one medium is about 2 large).
Some of my favorite pizza in DK is made in a place called Gorm's. They have a bunch of Italian-style dishes but the pizza's excellent - it's got a very thin, tasty crust and fresh, delicious toppings. It's on the pricy end of the scale, but it's worth it. (Still somewhat less than 660,000,000 USD though)
The basic idea of money is that it’s worth whatever folks think is a fair trade is. At that point, (whatever amount I forget) BTC was worth 2 pizzas. Future value is irrelevant then and now. I am reminded of the scene in The Magnificent Seven (I think?) when Charles Bronson’s character takes an amount for the job that is a low fraction of his asking rate. Then his character emphasizes that he accepts the job because the amount is far more than anything he has received in months and he’s broke. Money, in its truest form, is only worth what it’s worth in the moment and is based on services (or services that go into making a “product”). Investing in the potential of that isn’t good or bad per se, but I don’t think that qualifies as money. My thought is that maybe we shouldn’t call bitcoin money, but something else. As pointed out in another response, it’s very volatile. Sure the value of $88,000 compared to where it started but it’s also on the downfall and has lost tons compared to where it once was— including a massive drop just days ago. So really it’s almost nothing like money but rather something money is invested in. Saying x amount of BTC might be worth more in the future is speculation cuz maybe it’ll be true maybe it won’t. Again, I don’t think that makes it inherently good or bad but it ain’t money. I think if you look at the roots of why money was created, it becomes even more evident. BTC is increasingly less available to all walks of life. I think something that started as fairly punk rock and equalizing has become anything but that. Heck, much of society doesn’t even acknowledge it as a viable thing. Its value is based on nothing really. It’s the ultimate form of fiat in many ways.
I'm glad you added that last bit. It's all imaginary and completely based on trust at the end of the day. That's supposed to be a huge feature of smart contracts that are held "on chain" - not Bitcoin, but the underlying tech- the contract automatically settles the transaction for you once the conditions are verified as met, upon which terms the two parties have already agreed... but the "don't worry about trust" bit only works if people trust BTC enough to actually use it in the first place. It's a chicken/egg conundrum in some ways.
Truly bizarre but who ultimately retained those two bits? I remember, back in my early restaurant days, that some things didn't fit on the deposit form so we'd get creative to make the drop work like swapping in 2 $1 bills for a $2 bill. I didn't know about the silver certificate differences to look for back then so probably put many more back into circulation than I should have! Hindsight 20/20. Best pizza -Using Trader Joe's items - spread 1/2 dough into pan/stone, put Mozzarella slices down first, sautee their fire roasted vegetable medley in butter and garlic salt until caramelized, spread over base & sprinkle on three cheese blend. Bake at 425 for 20min then add more mozzarella and put back in oven until just melted and enjoy!
It is seriously amazing. My brother gave me grief for bringing pizza to a Thanksgiving meal (tradition etc) I insisted that appetizers could be anything, so he tried it, groaned OMG, immediately grabbed another slice. I hope you are able to try it!
I don't see how Bitcoin is an effective store of wealth. How can it be one without price stability? It's less stable than the most volatile stock and is prone to make big moves based on the utterings of billionaire asshats.
Can you think of anything else that was worth .00002 crappy pizzas 14 years ago that's now worth $66k? Yeah, that kind of rise (probably) won't happen again, but look at the five-year price graph. How much of your retirement funds would you be willing to put there?
Backing by a government is one of things that makes a currency, well, a currency. Wanting a currency that isn't "controlled by a fiat government" is kind of like wanting a pizza, but without all that unhealthy cheese and flour. If avoiding traditional currencies was a viable option, we wouldn;t be calling goldbugs goldbugs.
Wanting bitcoin instead of a "fiat" currency is like wanting a pizza that only has cheese made by one dairy, and they might have used all their milk to secretly fund a get-rich-quick yogurt project.
I remember I read that guy who bought pizza with bitcoins and the one who received bitcoins as well sold so that he can go on a date with his girlfriend. How I wish what would happen to bitcoins would be predicted. He was interviewed later and said he didn't regret. But alas, that amount to regret for sure. Another guy was complaining in 2012 that the price of bitcoins had decreased and he had to sell. Recently I saw someone randomly said if the guy still exists. Strangely he responded that he is alive but dead inside. In short ,we never know what we have until time passes. I hope Andrew you've bought bitcoin because in the coming years ,it will be $660,000
Technically, I think it was more like tens of millions per slice, since they got two whole pies and cut them up. I mean, that doesn't make it all that much less shocking!
A couple years ago I moved to the top of a mountain and that same year Sam Bankman Fried went nutso in the Bahamas with his crypto cabal. As his empire unraveled, and the snow drifts around me rose higher. I became a teeny bit obsessed with SBF. It's how I started writing too because I started following crypto skeptic Molly White of W3IGG fame. Had to write about it! When it all crashed down, I bought a bit for kicks and since its tripled. Makes no sense. Cool story about the pizza - did not know that!
That mountain living sounds like it might also make a really good story! I was following the SBF saga pretty intensely for a minute there, too. Matt Levine wrote a ton about his case.
Yes, stranger than fiction in many ways! I'm sure Jonah Hill will make an excellent SBF, in case nobody's thought of that yet. He was a delight in at least one finance movie, The Wolf of Wall Street, and I think he could kill it in a role that's like a throwback to his Superbad days.
You're right Jonah Hill would be perfect! I know that movie is coming. This is the article I wrote after the verdict, I didn't like how mainstream media like 60mims was portraying him as victim
Nice. I agree with this take: it was fraud, pure and simple. Bernie Madoff also seemed to genuinely want to help his clients, if we think back to that incident. This is identical in how sinister it is; it's just that SBF got caught much sooner.
The only thing that can compete and surpass the Bitcoin Pizza is probably:
In the 1600s, the island of Manhattan was famously purchased by Dutch settlers from Native Americans for goods worth just 60 guilders, often cited as about $24 worth of trade goods, and $24 in 1635 is equivalent in purchasing power to about $908.15 today, an increase of $884.15 over 389 years. The dollar had an average inflation rate of 0.94% per year between 1635 and today, producing a cumulative price increase of 3,683.96%.
However, this happens all the time in the stock market when someone sells a stock early, and it goes up exceptionally high, for example, Amazon at $18 and apple at less than $10.
Buffett has used this example a few times over the years to talk about compounding, and how investing a sum equivalent to 60 guilders (as you point out, around $900 in today's terms) and ending up with that 3.6 million percent cumulative increase only actually implies a CAGR (Compound Annual Growth Rate) of about 2.7%.
Right now, the risk-free rate of Treasurys is more like 5.5%, and stocks pretty consistently return about 10% per year. The future value of $900 compounded annually at 7% for 390 years would be over $250 trillion. Bloomberg implies that Manhattan is worth about 1.7 trillion dollars.
I agree; they are good lessons in compounding, as we do not have anyone getting huge benefits from the advantages they have received. They also did not know the future values of these things.
True. Nobody knows anything about what will continue to work. We can only look at the past to understand what to avoid.
This quote sums up well on how to look at the history. It is from the book “Why we don't learn from history.”
“History can show us what to avoid, even if it does not teach us what to do, by showing the most common mistakes that mankind is apt to make and to repeat.”
And the finer print under all investment vehicles:
“The past performance is not an indicator of the future performance. “
Charlie Munger has a great way of putting this, something to the effect that it's far easier to learn from the mistakes of the eminent dead, than to make those same mistakes yourself.
In the beginning, Bitcoin was supposed to be a utility token. You could mine it and use it to buy groceries, pizzas, drinks, etc. It was supposed to be a spendable token. However, as usual, investors got involved and drove up the price of the token, making them an investment instead of a utility.
I remember I read that guy who bought pizza with bitcoins and the one who received bitcoins as well sold so that he can go on a date with his girlfriend. How I wish what would happen to bitcoins would be predicted. He was interviewed later and said he didn't regret. But alas, that amount to regret for sure. Another guy was complaining in 2012 that the price of bitcoins had decreased and he had to sell. Recently I saw someone randomly said if the guy still exists. Strangely he responded that he is alive but dead inside. In short ,we never know what we have until time passes. I hope Andrew you've bought bitcoin because in the coming years ,it will be $660,000
I remember I read that guy who bought pizza with bitcoins and the one who received bitcoins as well sold so that he can go on a date with his girlfriend. How I wish what would happen to bitcoins would be predicted. He was interviewed later and said he didn't regret. But alas, that amount to regret for sure. Another guy was complaining in 2012 that the price of bitcoins had decreased and he had to sell. Recently I saw someone randomly said if the guy still exists. Strangely he responded that he is alive but dead inside. In short ,we never know what we have until time passes. I hope Andrew you've bought bitcoin because in the coming years ,it will be $660,000
I remember I read that guy who bought pizza with bitcoins and the one who received bitcoins as well sold so that he can go on a date with his girlfriend. How I wish what would happen to bitcoins would be predicted. He was interviewed later and said he didn't regret. But alas, that amount to regret for sure. Another guy was complaining in 2012 that the price of bitcoins had decreased and he had to sell. Recently I saw someone randomly said if the guy still exists. Strangely he responded that he is alive but dead inside. In short ,we never know what we have until time passes. I hope Andrew you've bought bitcoin because in the coming years ,it will be $660,000
I remember I read that guy who bought pizza with bitcoins and the one who received bitcoins as well sold so that he can go on a date with his girlfriend. How I wish what would happen to bitcoins would be predicted. He was interviewed later and said he didn't regret. But alas, that amount to regret for sure. Another guy was complaining in 2012 that the price of bitcoins had decreased and he had to sell. Recently I saw someone randomly said if the guy still exists. Strangely he responded that he is alive but dead inside. In short ,we never know what we have until time passes. I hope Andrew you've bought bitcoin because in the coming years ,it will be $660,000
I remember I read that guy who bought pizza with bitcoins and the one who received bitcoins as well sold so that he can go on a date with his girlfriend. How I wish what would happen to bitcoins would be predicted. He was interviewed later and said he didn't regret. But alas, that amount to regret for sure. Another guy was complaining in 2012 that the price of bitcoins had decreased and he had to sell. Recently I saw someone randomly said if the guy still exists. Strangely he responded that he is alive but dead inside. In short ,we never know what we have until time passes. I hope Andrew you've bought bitcoin because in the coming years ,it will be $660,000
I should have held on to mine but I lost a bit in 2022 when it went up then way down. Now it's back up. But I really don't trust crypto. Seems too... Perfect if the government got into it. And what better way to play it than make it seem counter-government... I worked at Chainalysis doing crypto analytics and based on that, I did a deep dive on it a while ago.
https://www.polymathicbeing.com/p/blockchain-and-government
I think the degree to which I trust any investment varies. Crypto could be compensated by governments, but I think that becomes really, really hard with BTC. Still, I'm nowhere near tech-savvy enough to be at the vanguard of this conversation, much less seriously trying to buy and sell crypto in any meaningful way.
Thinking about the concept, on the other hand? It's delightfully complex and nuanced, and I really enjoy it.
Never bought any cryptocurrency, but I have people in my friend circle and distant family that are into crypto. Allegedly, my wife's cousin ended up making a decent chunk of money on the early Bitcoin price rises.
I did, however, buy plenty of mediocre pizzas in my life. My sole consolation is that I'd never paid hundrends of millions of dollars for them.
What's the most you've ever spent on a pizza?
Per pizza? Probably something like 150 dkk, which is about 20 dollars. Typically it's more around 15 USD.
Pizza pricing is really interesting to me, because I've been aware of it for my whole life. I worked in a pizza shop when I was 17, kinda my first "real" job where I worked legally for someone else. A slice of NY style cheese pizza was $1.77 with tax, and pepperoni was $2.19. These slices were an eighth of a 16" pie, so not trivial in size, and very very good. I was spoiled from an early age with authentic pizza.
The crazy thing is that you can get deals on Donimo's today (not great pizza per se, but amazing fast food pizza) for under $10 for a medium pie (one medium is about 2 large).
Some of my favorite pizza in DK is made in a place called Gorm's. They have a bunch of Italian-style dishes but the pizza's excellent - it's got a very thin, tasty crust and fresh, delicious toppings. It's on the pricy end of the scale, but it's worth it. (Still somewhat less than 660,000,000 USD though)
Sometimes you have to treat yo'self!
https://www.youtube.com/watch?v=gSjM5B3QNlw
(and that pizza sounds amazing)
There's no way he can slow down enough to keep up with us. That's about me. Anxiety FTW!
The basic idea of money is that it’s worth whatever folks think is a fair trade is. At that point, (whatever amount I forget) BTC was worth 2 pizzas. Future value is irrelevant then and now. I am reminded of the scene in The Magnificent Seven (I think?) when Charles Bronson’s character takes an amount for the job that is a low fraction of his asking rate. Then his character emphasizes that he accepts the job because the amount is far more than anything he has received in months and he’s broke. Money, in its truest form, is only worth what it’s worth in the moment and is based on services (or services that go into making a “product”). Investing in the potential of that isn’t good or bad per se, but I don’t think that qualifies as money. My thought is that maybe we shouldn’t call bitcoin money, but something else. As pointed out in another response, it’s very volatile. Sure the value of $88,000 compared to where it started but it’s also on the downfall and has lost tons compared to where it once was— including a massive drop just days ago. So really it’s almost nothing like money but rather something money is invested in. Saying x amount of BTC might be worth more in the future is speculation cuz maybe it’ll be true maybe it won’t. Again, I don’t think that makes it inherently good or bad but it ain’t money. I think if you look at the roots of why money was created, it becomes even more evident. BTC is increasingly less available to all walks of life. I think something that started as fairly punk rock and equalizing has become anything but that. Heck, much of society doesn’t even acknowledge it as a viable thing. Its value is based on nothing really. It’s the ultimate form of fiat in many ways.
I'm glad you added that last bit. It's all imaginary and completely based on trust at the end of the day. That's supposed to be a huge feature of smart contracts that are held "on chain" - not Bitcoin, but the underlying tech- the contract automatically settles the transaction for you once the conditions are verified as met, upon which terms the two parties have already agreed... but the "don't worry about trust" bit only works if people trust BTC enough to actually use it in the first place. It's a chicken/egg conundrum in some ways.
Truly bizarre but who ultimately retained those two bits? I remember, back in my early restaurant days, that some things didn't fit on the deposit form so we'd get creative to make the drop work like swapping in 2 $1 bills for a $2 bill. I didn't know about the silver certificate differences to look for back then so probably put many more back into circulation than I should have! Hindsight 20/20. Best pizza -Using Trader Joe's items - spread 1/2 dough into pan/stone, put Mozzarella slices down first, sautee their fire roasted vegetable medley in butter and garlic salt until caramelized, spread over base & sprinkle on three cheese blend. Bake at 425 for 20min then add more mozzarella and put back in oven until just melted and enjoy!
Oh snap, that sounds like an awesome homemade pizza! I did not expect a recipe today.
It is seriously amazing. My brother gave me grief for bringing pizza to a Thanksgiving meal (tradition etc) I insisted that appetizers could be anything, so he tried it, groaned OMG, immediately grabbed another slice. I hope you are able to try it!
Yay! <3
I don't see how Bitcoin is an effective store of wealth. How can it be one without price stability? It's less stable than the most volatile stock and is prone to make big moves based on the utterings of billionaire asshats.
Can you think of anything else that was worth .00002 crappy pizzas 14 years ago that's now worth $66k? Yeah, that kind of rise (probably) won't happen again, but look at the five-year price graph. How much of your retirement funds would you be willing to put there?
Backing by a government is one of things that makes a currency, well, a currency. Wanting a currency that isn't "controlled by a fiat government" is kind of like wanting a pizza, but without all that unhealthy cheese and flour. If avoiding traditional currencies was a viable option, we wouldn;t be calling goldbugs goldbugs.
Wanting bitcoin instead of a "fiat" currency is like wanting a pizza that only has cheese made by one dairy, and they might have used all their milk to secretly fund a get-rich-quick yogurt project.
I remember I read that guy who bought pizza with bitcoins and the one who received bitcoins as well sold so that he can go on a date with his girlfriend. How I wish what would happen to bitcoins would be predicted. He was interviewed later and said he didn't regret. But alas, that amount to regret for sure. Another guy was complaining in 2012 that the price of bitcoins had decreased and he had to sell. Recently I saw someone randomly said if the guy still exists. Strangely he responded that he is alive but dead inside. In short ,we never know what we have until time passes. I hope Andrew you've bought bitcoin because in the coming years ,it will be $660,000
An everyday act turned into a legend. The ordinary becomes profound. What a journey from dough to digital gold.
A $660 million slice, indeed. What a time to ponder.
Technically, I think it was more like tens of millions per slice, since they got two whole pies and cut them up. I mean, that doesn't make it all that much less shocking!
A couple years ago I moved to the top of a mountain and that same year Sam Bankman Fried went nutso in the Bahamas with his crypto cabal. As his empire unraveled, and the snow drifts around me rose higher. I became a teeny bit obsessed with SBF. It's how I started writing too because I started following crypto skeptic Molly White of W3IGG fame. Had to write about it! When it all crashed down, I bought a bit for kicks and since its tripled. Makes no sense. Cool story about the pizza - did not know that!
That mountain living sounds like it might also make a really good story! I was following the SBF saga pretty intensely for a minute there, too. Matt Levine wrote a ton about his case.
Media frenzy right? Crazy story. Molly super cynical and sarcastic, right up my alley
Yes, stranger than fiction in many ways! I'm sure Jonah Hill will make an excellent SBF, in case nobody's thought of that yet. He was a delight in at least one finance movie, The Wolf of Wall Street, and I think he could kill it in a role that's like a throwback to his Superbad days.
You're right Jonah Hill would be perfect! I know that movie is coming. This is the article I wrote after the verdict, I didn't like how mainstream media like 60mims was portraying him as victim
https://open.substack.com/pub/wirepine/p/crypto-boy-is-going-to-jail
also made a goofy video of him being chased around by the keystone cop to the Benny Hill theme thanks @whytryai
Nice. I agree with this take: it was fraud, pure and simple. Bernie Madoff also seemed to genuinely want to help his clients, if we think back to that incident. This is identical in how sinister it is; it's just that SBF got caught much sooner.
The only thing that can compete and surpass the Bitcoin Pizza is probably:
In the 1600s, the island of Manhattan was famously purchased by Dutch settlers from Native Americans for goods worth just 60 guilders, often cited as about $24 worth of trade goods, and $24 in 1635 is equivalent in purchasing power to about $908.15 today, an increase of $884.15 over 389 years. The dollar had an average inflation rate of 0.94% per year between 1635 and today, producing a cumulative price increase of 3,683.96%.
However, this happens all the time in the stock market when someone sells a stock early, and it goes up exceptionally high, for example, Amazon at $18 and apple at less than $10.
Yeah, true about Manhattan, but....
Buffett has used this example a few times over the years to talk about compounding, and how investing a sum equivalent to 60 guilders (as you point out, around $900 in today's terms) and ending up with that 3.6 million percent cumulative increase only actually implies a CAGR (Compound Annual Growth Rate) of about 2.7%.
Right now, the risk-free rate of Treasurys is more like 5.5%, and stocks pretty consistently return about 10% per year. The future value of $900 compounded annually at 7% for 390 years would be over $250 trillion. Bloomberg implies that Manhattan is worth about 1.7 trillion dollars.
Just a different way to think about this.
I agree; they are good lessons in compounding, as we do not have anyone getting huge benefits from the advantages they have received. They also did not know the future values of these things.
Nobody knows the future value of anything for sure, right?
True. Nobody knows anything about what will continue to work. We can only look at the past to understand what to avoid.
This quote sums up well on how to look at the history. It is from the book “Why we don't learn from history.”
“History can show us what to avoid, even if it does not teach us what to do, by showing the most common mistakes that mankind is apt to make and to repeat.”
And the finer print under all investment vehicles:
“The past performance is not an indicator of the future performance. “
Charlie Munger has a great way of putting this, something to the effect that it's far easier to learn from the mistakes of the eminent dead, than to make those same mistakes yourself.
In the beginning, Bitcoin was supposed to be a utility token. You could mine it and use it to buy groceries, pizzas, drinks, etc. It was supposed to be a spendable token. However, as usual, investors got involved and drove up the price of the token, making them an investment instead of a utility.
I remember I read that guy who bought pizza with bitcoins and the one who received bitcoins as well sold so that he can go on a date with his girlfriend. How I wish what would happen to bitcoins would be predicted. He was interviewed later and said he didn't regret. But alas, that amount to regret for sure. Another guy was complaining in 2012 that the price of bitcoins had decreased and he had to sell. Recently I saw someone randomly said if the guy still exists. Strangely he responded that he is alive but dead inside. In short ,we never know what we have until time passes. I hope Andrew you've bought bitcoin because in the coming years ,it will be $660,000
I remember I read that guy who bought pizza with bitcoins and the one who received bitcoins as well sold so that he can go on a date with his girlfriend. How I wish what would happen to bitcoins would be predicted. He was interviewed later and said he didn't regret. But alas, that amount to regret for sure. Another guy was complaining in 2012 that the price of bitcoins had decreased and he had to sell. Recently I saw someone randomly said if the guy still exists. Strangely he responded that he is alive but dead inside. In short ,we never know what we have until time passes. I hope Andrew you've bought bitcoin because in the coming years ,it will be $660,000
I remember I read that guy who bought pizza with bitcoins and the one who received bitcoins as well sold so that he can go on a date with his girlfriend. How I wish what would happen to bitcoins would be predicted. He was interviewed later and said he didn't regret. But alas, that amount to regret for sure. Another guy was complaining in 2012 that the price of bitcoins had decreased and he had to sell. Recently I saw someone randomly said if the guy still exists. Strangely he responded that he is alive but dead inside. In short ,we never know what we have until time passes. I hope Andrew you've bought bitcoin because in the coming years ,it will be $660,000
I remember I read that guy who bought pizza with bitcoins and the one who received bitcoins as well sold so that he can go on a date with his girlfriend. How I wish what would happen to bitcoins would be predicted. He was interviewed later and said he didn't regret. But alas, that amount to regret for sure. Another guy was complaining in 2012 that the price of bitcoins had decreased and he had to sell. Recently I saw someone randomly said if the guy still exists. Strangely he responded that he is alive but dead inside. In short ,we never know what we have until time passes. I hope Andrew you've bought bitcoin because in the coming years ,it will be $660,000
I remember I read that guy who bought pizza with bitcoins and the one who received bitcoins as well sold so that he can go on a date with his girlfriend. How I wish what would happen to bitcoins would be predicted. He was interviewed later and said he didn't regret. But alas, that amount to regret for sure. Another guy was complaining in 2012 that the price of bitcoins had decreased and he had to sell. Recently I saw someone randomly said if the guy still exists. Strangely he responded that he is alive but dead inside. In short ,we never know what we have until time passes. I hope Andrew you've bought bitcoin because in the coming years ,it will be $660,000