When the Bitcoin system launched, its currency, bitcoin, was pretty much worthless. It wasn’t until 2010, when someone paid 10,000 BTC for a couple of pizzas, that bitcoin began to give signs that it could be used as money.
$600,000,000
Equivalent cost today for the two Papa John's pizza
Laszlo Hanyecz bought on May 22nd, 2010, for
10,000 BTC, the first commercial bitcoin transaction.
Celebrated each year as Bitcoin Pizza Day. As of April 2021, that would amount to US$ 600,000,000 – easily the most expensive dinner in History. Clearly belief in the Bitcoin system has grown dramatically as people go on the journey you are now taking, learning about sound money.
But is anyone using it as money? Yes, there are over 1 million active Bitcoin addresses (users) particularly those suffering from the hyperinflation mentioned earlier, which constantly reduces the purchasing power of their existing money and those looking for a strong store of value.
Hopefully you’ve now understood in basic terms what cryptocurrency is, and how it tries to achieve the function of sound money. As the first cryptocurrency, Bitcoin’s design has opened up a new phase in our journey to find the best sound money, and this is just the start.
You’ll discover in later lessons how Bitcoin is evolving and as more people understand it, new improvements and refinements are made.
The final frontier for bitcoin is volatility. Even though its price and popularity are increasing, it is still susceptible to big swings in value because in truth Bitcoin is still in its infancy, so congratulations, you are early to the party.
But as more and more people own (and use) it, there’s every reason to believe that cryptocurrency will become more stable over time, and prove to be the ultimate form of sound money.
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