10,000 BTC Worth Only $25? The Unforgettable Bitcoin Pizza Story

This is truly a story sadder than sadness.

On May 18, 2010, programmer Laszlo posted that he wanted to exchange 10,000 bitcoins for two large pizzas. Three days later, cryptography enthusiast jercos spent $25 to buy two pizzas and sent them to Laszlo, receiving 10,000 bitcoins in return.

Looking back at the environment at that time, perhaps this story isn't so sad:

1. At that time, it had only been a little over a year since the birth of Bitcoin's first genesis block. Bitcoin was merely a tool for cryptography enthusiasts to tip each other and did not have a price anchored to fiat currency. Perhaps no one even thought of using it to exchange for money. Genius programmer Laszlo gave Bitcoin a price by exchanging it for pizza, inadvertently advancing the process of virtual digital currency becoming fiat. He also became the first person to purchase goods with Bitcoin, earning a place in history.

2. At that time, the competition for Bitcoin mining power was very small. Laszlo replaced CPU mining with GPU mining, earning 1-2 block rewards per hour, with each block reward being 50 bitcoins. On May 17 alone, he earned 1,400 bitcoins. Given the low cost of Bitcoin mining at the time, he might have owned many bitcoins, so exchanging some for pizza might not have been a big deal.

3. At that time, those who could access virtual digital currency and earn profits through mining, if they had continued to participate in virtual digital currency mining over the past 10 years and made some investments, even if they missed out on Bitcoin, they could have achieved financial freedom by catching any of the subsequent cryptocurrencies like Litecoin, Ripple, or Ethereum.

However, the sad story still happened:

1. After tasting the sweetness of buying pizza for the first time, Laszlo spent another 40,000 bitcoins on pizza. When Bitcoin's value rose to $1, he sold all his bitcoins to buy a new computer.

2. Laszlo is still a programmer at the online retail company GoRuck in Florida, the same profession he had when he bought Bitcoin nine years ago.

3. Jercos, who received 10,000 bitcoins, did not wait until December 2017 when Bitcoin reached its peak of $20,000. He sold the 10,000 bitcoins after they increased tenfold.

Many friends who entered the market in the past year must have sighed, wishing they had entered the digital currency field a few years earlier, thinking they might have achieved financial freedom by now. However, after seeing this story of Bitcoin being exchanged for pizza, you should understand that many things, once missed, are missed. Making such "if only" assumptions is meaningless.

Similar story templates are not unique to the field of virtual digital currency.

You must have heard of Xiao Wang from Beijing, who sold his small courtyard house in Beijing for less than 300,000 yuan and went abroad to work hard, earning 6 million yuan. When he returned home, he found that the courtyard house he sold had skyrocketed to 80 million yuan, causing him to faint and be hospitalized.

Or, Li Ze-kai, the son of Li Ka-shing, who sold his 20% stake in Tencent to South Africa's MIH Group for $12.6 million in 2001, missing out on over 400 billion yuan.

And so on...

In any investment in value-fluctuating appreciating assets, including gold, jewelry, art, antiques, stocks, real estate, etc., there are countless cases of regret. Once an investment flows into the market, it should follow certain market exchange rules.

Bill Gates once said, true wealth = concept + time. It can be seen that the acquisition of any wealth requires the test of time, and the paper gains and losses during this period are the greatest test of your concepts and cognition.

From the Bitcoin pizza incident, we should at least gain the following insights:

1. Rational investment has limitations, cognitive upgrade is the hard truth

It seems like a group of people are laughing at a fool, but in fact, everyone is quite ordinary.

Many people say that if those 10,000 bitcoins hadn't been used to buy pizza and were sold at the peak in 2017, they would be worth at least $160 million. So, everyone unconsciously speculates about Laszlo's psychological shadow, thinking he is a fool who missed out on becoming a billionaire.

However, if most people experienced Laszlo's life, 99% of them would probably make the same choice. Just like we envy friends who invested in Bitcoin early at $300-500, thinking they have achieved financial freedom. In fact, even among those who entered the digital currency field early, very few have truly achieved financial freedom. Most people either lost their private keys after buying a lot of bitcoins, sold their bitcoins after a 10-100 times increase, or turned against digital currency investment after missing out on Bitcoin.

In any case, those who truly made money from investing in digital currency did not rely on rational investment logic. It was precisely their blind faith and misunderstood madness that made them successful. If they are considered winners in life, it is entirely due to their advanced cognitive abilities and psychological resilience to financial market fluctuations.

Li Xiaolai once joked that his digital currency account could increase by 200 million yuan after a night's sleep and decrease by 100 million yuan after another night's sleep. The cognitive height of those who can still invest in a currency-based manner despite such fluctuations is beyond our reach.

On February 25 last year, Laszlo spent 0.00649 BTC through the Lightning Network to buy two more pizzas. Regarding the sad story of missing out on billions, Laszlo said he did not regret it, and the pizzas were delicious.

This calm attitude is quite worthy of our admiration.

2. High-multiplier investment opportunities still exist, but the possibility of low-capital counterattacks is gone

History does not repeat itself, but it often rhymes.

Many people like to use the pizza incident to advise those around them to hold onto a coin to avoid another era tragedy like the pizza incident. In fact, such worries are somewhat unnecessary. Bitcoin's million-fold increase was a once-in-a-lifetime opportunity. Subsequently, Ripple also increased by tens of millions of times, and in recent years, mainstream coins like Ethereum, Litecoin, and BNB have also had incredible investment returns.

Take Binance's platform coin BNB as an example. It was launched in July 2017 and initially fell below its issue price, dropping to a low of 0.6 yuan. Now it has risen to 230 yuan. Although it hasn't increased as crazily as Bitcoin, it is still a rare opportunity for wealth appreciation that is close to us. However, how many people have seized it? We see many people in forums expressing anger, complaints, and frustration after missing out, similar to how many people felt after missing out on Bitcoin years ago. Let's mimic their words: "That person's appearance is so strange, he looks like a dog."

So, will there be another investment opportunity like Bitcoin in the future?

Most likely not. Because for most people, what they lack is not high-multiplier returns, but the opportunity for low-capital counterattacks. Unlike investing in real estate, secondary market stocks, or primary market angel investments, the initial investment in Bitcoin was negligible. While real estate and stocks may also have high returns, the initial capital required is beyond the reach of most people. For example, 20 years ago, a house in Beijing cost 2,000 yuan per square meter. Although it seems very low now, at that time, the monthly salary was less than 1,000 yuan. How many people could afford to buy a house?

Now, most people have a general understanding of Bitcoin and want to invest in it, but the price of over 50,000 yuan makes many people hesitate. Even if you tell them that Bitcoin can rise to 1 million or even 10 million yuan in the future, few people would sell their house or car to bet on Bitcoin (and it is not recommended even if they do).

Influenced by the Bitcoin pizza incident, many people now choose to invest in altcoins, hoping to achieve financial freedom with low-cost investments through the hundredfold or thousandfold growth of altcoins. Unfortunately, such projects lack Bitcoin's fundamental characteristics: limited total supply and irreplaceability (consensus), and the ability to continuously appreciate in circulation.

Many of the current hundredfold coins are not open-source, their codes can be arbitrarily modified, and they are often manipulated by insiders using Ponzi schemes. Most people will still be harvested like leeks, and after one round of harvesting, they will change their appearance and use the same method to harvest again, never giving you a chance to recover.

This is a very cruel contradiction in current digital currency investment: the investment capital for valuable targets is too high, while the investment in non-valuable targets is too deceptive.

3. "Buddhist-style holding" may no longer be the best choice

Now mainstream media are still promoting the high returns of storing digital currency, causing most people to have a misconception that digital currency investment must be Buddhist

Holding onto cryptocurrency and engaging in buying and selling transactions only increases the risk of missing out and getting trapped.

Although historical experience tells us that holding onto cryptocurrency in a Zen-like manner may yield the highest returns, the original vision of Bitcoin was for it to be used in circulation. As a peer-to-peer electronic cash system, its payment scenarios should outweigh others. Laszlo's Bitcoin pizza transaction endowed Bitcoin with a stronger circulation attribute, which is a significant contribution to Bitcoin's development history.

Of course, due to Bitcoin's block capacity and delayed confirmation characteristics, fully circulating Bitcoin still faces many challenges. However, the subsequent emergence of sidechains and the Lightning Network is making efforts in this direction. The current price volatility of Bitcoin is due to information asymmetry, where early investors with holdings release their chips to new entrants at the current price, a process that will continue for 3-5 years or even longer.

During this period, early entrants still have the opportunity to obtain high premiums. Once the chips are dispersed to a certain extent, the Bitcoin used for storage and the Bitcoin used for circulation may diverge. Bitcoin may truly become digital gold, while other cryptocurrencies like stablecoins will become the main circulating chips. By then, the Bitcoin pizza event might become a legendary existence. At that time, there might indeed be a sense of missing out on an era.

It should be said that the next 3-5 years are the best time to get on board, but it should not be simply understood as investing 5000 yuan to buy 0.1 Bitcoin. Even if it grows 20 times, so what? However, if you add technical learning and cognitive improvement of the blockchain industry to your investment, find opportunities in the gaps where blockchain integrates with traditional application scenarios, and seek security with the soft power of industry cognitive improvement, this is much more meaningful than purely speculating on cryptocurrency.

For young people who dream of turning their fortunes around in the digital currency market, holding onto cryptocurrency in a Zen-like manner may no longer be suitable. It is appropriate to learn some financial knowledge, grasp the patterns of digital currency rises and falls, make reasonable fixed investments during bear markets (low cost, low risk), collaborate on swing trading during the transition from bear to bull markets (compound interest, expand principal), and cash out at the peak of the bull market. This is the correct logic for playing the digital currency market.

Daring to buy is a breakthrough in cognition, but knowing when to sell is the ability to seize the opportunities of the era.