Since it’s inception back in 2009, one Bitcoin has gone from being worth absolutely nothing to being worth 1/10,000 of a pizza to achieving parity with the US dollar and reaching an all time high of $1,271 (which at the time was worth more than one troy ounce of gold – $1,201.91). It is the limited supply of bitcoin that creates this sort of purchasing power and will likely create a number of multi-millionaires and billionaires in the next ten to twenty years.
The $8 Million Pizza
On May 17th 2010 a Florida resident named, Laszlo Hanyecz placed an ad on the forum BitcoinTalk asking if anyone would buy him two pizzas in exchange for 10,000 bitcoins that he had mined on his computer. It wasn’t until several days later on May 22nd that a man from the UK decided to take him up on this exchange and placed an international phone order to a Papa John’s Pizza store in Florida and had two pizzas delivered to Laszlo. This was a historic moment for the bitcoin community because it is the first recorded transaction of bitcoin ever being used as money. Just so you have an idea of the value of bitcoin, 10,000 coins are worth $8.5 million at today’s price.
To commemorate the transaction, May 22 has been dubbed Bitcoin Pizza Day and a number of pizza shops around the world offer discounts to bitcoin users on this day.
The $27 Apartment
A similar situation took place back in 2009 when a Norwegian named Kristoffer Koch decided to buy 5,000 Bitcoin for about 150 Norwegian Krone (about $27 USD). In April of 2013, Kristoffer found a pleasant surprise when he learned that the price of Bitcoin had shot up to about $219 USD making his 5,000 coins worth about $1.1 million. He could have held onto them but decided to sell most of them to pay cash for an apartment in one of Oslo’s high end neighborhoods.
What is unique about this story is that Kristoffer was not a business mogul or wall street trader. He was just a computer nerd who thought the idea of bitcoin was cool enough to spend $27 on. Once he purchased them, he just saved them for a few years and they ended up being worth every krone.
If you compare his purchase of 5,000 coins to today’s price of about $850 per coin, those same coins would be worth about $4.2 million.
Own Some Bitcoin
While these sorts of insane percentage gains are long gone, it is important to understand that owning even a small amount of bitcoin can pay off BIG over the next two decades. $27 may not buy you a luxury apartment in one of Oslo’s affluent neighborhoods, it could prove to be one of your best long term assets. The moral of the stories above is that everyone should own at least some bitcoin. Buying and saving $27 is probably a good starting point. I think that the only regret that you will have is that you didn’t buy more.
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Do you think bitcoin will create more millionaires in the next twenty years? Let us know with a comment below or a tweet at @BitcoinReasons