10,000 BTC is only worth $25. The story of Bitcoin pizza

Author: Haotian

This is really a story that is sadder than sadness.

On May 18, 2010, programmer Laszlo posted that he hoped to exchange 10,000 bitcoins for 2 large pizzas. Three days later, cryptography enthusiast jercos spent $25 to buy two pizzas and sent them to Laszlo, and received 10,000 bitcoins.

Back to the big environment at that time, maybe this story is not sad:

1. At that time, it was only more than a year since the birth of the first Bitcoin Genesis Block. Bitcoin was just a tool for cryptography enthusiasts to reward each other. It did not have a price anchored to legal currency, and no one might have thought of using it to exchange money. Genius programmer Laszlo gave Bitcoin a price by exchanging pizza for the first time, inadvertently promoting the process of legalization of virtual digital currency. He also became the first person to buy goods through Bitcoin and was recorded in history.

2. At that time, there was little competition in Bitcoin mining computing power. Laszlo used GPU instead of CPU mining, and could get 1-2 block rewards per hour. At that time, one block rewarded 50 Bitcoins. On May 17 alone, he received 1,400 bitcoins as a reward. Based on the low-cost bitcoin mining income at the time, this guy may have owned many bitcoins, and exchanging some for pizza may not be a big deal.

3. At that time, he was able to access virtual digital currencies and earn income through mining. If he had been able to continue to participate in virtual digital currency mining in the past 10 years and invest a little more, even if he missed bitcoin, he could have obtained wealth freedom in the eyes of the world by grabbing any of Litecoin, Ripple, Ethereum, etc.

However, a sad story still happened:

1. After Laszlo tasted the sweetness of buying pizza for the first time, he spent 40,000 bitcoins on pizza. When the value of bitcoin rose to $1, he sold all his bitcoins and bought a new computer.

2. Laszlo is still a programmer at GoRuck, an online retail company in Florida, which is no different from his job when he bought Bitcoin 9 years ago.

3. Jercos, who received 10,000 Bitcoins, did not wait until the peak of Bitcoin at $20,000 in December 2017. He sold the 10,000 Bitcoins after the profit exceeded 10 times.

Friends who have entered the market in the past year must have sighed and said that if they could have entered the field of digital currency a few years earlier, they might have achieved financial freedom. However, seeing this story of exchanging Bitcoin for pizza, you should understand a truth: many things are missed, and it is meaningless to make such an assumption of "knowing it earlier".

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

You must have heard that Xiao Wang from Beijing sold his small courtyard house in Beijing for less than 300,000 yuan, worked hard abroad and earned 6 million yuan. Now that he has returned home, Lao Wang found that the courtyard house he sold that year has skyrocketed to 80 million yuan, and he vomited blood on the spot and was admitted to the hospital.

Or, Li Ka-shing's son Li Zekai, who held 20% of Tencent's shares at the time, sold it to South Africa's MIH Group for US$12.6 million in 2001, missing out on more than 400 billion.

And so on...

In any investment in value-added commodities with value fluctuations, including: gold, jewelry, artwork, antiques, stocks, real estate, etc., there are countless things that you regret later. As the saying goes, once you buy and leave, you will not pursue the wrong love. Once the investment product enters the market, it should follow certain market exchange rules.

Bill Gates once said that real wealth = concept + time. It can be seen that the acquisition of any wealth needs to go through the test of time, and the profit and loss on paper during this period are the biggest test of your concept and cognition.

Through the Bitcoin pizza incident, we should at least gain the following enlightenment:

First, rational investment has limitations, and cognitive upgrading is a hard truth

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

Many people say that if the 10,000 bitcoins were not used to buy pizza, they would be worth at least $160 million if they were sold at the peak in 2017. Therefore, everyone would unconsciously guess the shadow area in Laszlo's heart while talking and laughing, and they all thought he was a fool who missed the billionaire.

However, if most people were to experience Laszlo's life once, I'm afraid more than 99% of them would make the same choice as him. Just like we envy friends who invested $300-500 in Bitcoin in the early years, thinking that they have become financially free. In fact, even among friends who entered the market in the early days of digital currency development, there are only a handful of people who have truly achieved financial freedom. Most people either invested in a lot of Bitcoins but lost their private keys; or bought Bitcoins at a very low price and sold them when the price increased 10-100 times; or after missing out on Bitcoins, they were overshadowed by the shadow of missing out, and began to turn from fans to haters, and completely bid farewell to the field of digital currency investment;

In any case, those who really make money by investing in digital currencies do not rely on rational investment logic, but on their mindless beliefs and incomprehensible madness. If they are winners in life, they win entirely because of their advanced cognitive abilities and psychological qualities to resist financial market fluctuations.

Li Xiaolai once joked that his digital currency account had 200 million more when he woke up after a sleep, and 100 million less when he woke up after another sleep. People who can still invest in currency under such fluctuations have a high level of cognition that is difficult for us to reach.

Last February 25, Laszlo spent 0.00649 BTC through the Lightning Network and bought 2 pizzas again. Laszlo said he did not regret the sad story of missing out on hundreds of millions of dollars, and the pizza he got in return was delicious.

This calm and relaxed mentality is quite worthy of our worship.

Second, there are still high-multiple investment opportunities, but low-principal counterattacks may be gone

History will not repeat itself, but it will be surprisingly similar.

Many people like to use the pizza incident to talk about things, and advise people around them to hold a coin firmly to avoid the same tragedy of the times as the pizza incident. In fact, such worries are somewhat redundant. The rise of Bitcoin by tens of millions of times is a once-in-a-lifetime opportunity. After that, Ripple also rose by tens of millions of times. In recent years, mainstream currencies such as Ethereum, Litecoin, and BNB have also had an incredible return on investment.

Take Binance platform coin BNB as an example. It was broken when it went online in July 2017, and the lowest price fell to 0.6 yuan. Now it has risen to 230 yuan. Although it is not as crazy as Bitcoin's increase, it is a rare opportunity that is close to us all and can increase our wealth. However, how many people have seized it? In the forum, we will see many people's grief, complaints, and complaints after they missed the opportunity. It is very similar to the way many people missed out on Bitcoin many years ago. Let's lip-sync: "That man looks so weird, he looks like a dog."

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

There is a high probability that there will be no such investment opportunity. Because for most people, what they lack is not a high multiple return, but a low principal counterattack opportunity. Unlike real estate investment, secondary market stocks, primary market angel investment, etc., the investment principal of early Bitcoin is negligible. While real estate and stocks seem to have a large multiple return, the principal to be paid is something that most people cannot afford. For example, the average price of a house in Beijing 20 years ago was 2,000 yuan, which is as low as it can be from today's perspective, but at that time, the monthly salary was less than 1,000 yuan, and how many people could afford to buy a house?

Now everyone has a general understanding of Bitcoin and wants to invest in Bitcoin, but the price of over 50,000 yuan will discourage most people. Even if you tell them that Bitcoin can rise to 1 million or even 10 million in the future, few people will sell their houses or cars to gamble on Bitcoin tomorrow (even if there are, it is not recommended).

Affected by the Bitcoin Pizza incident, many people now choose some copycat currencies when investing in digital currencies, trying to achieve wealth freedom by investing at low cost and relying on the hundreds or thousands of times growth of copycat currencies. Sadly, such projects lack the most basic characteristics of Bitcoin: the total supply is scarce and irreplaceable (consensus), and it can continue to increase in value during circulation.

Nowadays, many 100-fold coins are not open source, the code can be changed at will, and even completely artificially hyped up by using the Ponzi scheme. There are farmers behind the scenes, and most people will still be cut off. After cutting a wave, they will change vests and cut again in the same mode, and never give you a chance to get out of the trap.

This is a very cruel contradiction in investing in digital currency at the moment: the investment capital of valuable targets is too high, and the investment of non-value targets is too deceptive.

Third, "Buddhist holding of coins" may no longer be the best choice

Now the mainstream media is still promoting the super high returns of storing digital currencies, so that most people have a wrong perception that digital currency investment must be Buddhist holding of coins, and buying and selling transactions will only increase the risk of missing out and being locked in.

Although historical experience tells us that the return of holding coins in a Buddhist way may be the highest, the vision of Bitcoin at its inception was to be used for circulation. As a peer-to-peer electronic cash system, the payment scenario should be greater than other scenarios. Laszlo gave Bitcoin a stronger circulation attribute through the Bitcoin pizza trading event, which is definitely an outstanding contribution to the history of Bitcoin development.

Of course, due to the block capacity and delayed confirmation characteristics of Bitcoin, it is still difficult to fully circulate Bitcoin. But the subsequent emergence of side chains and lightning networks is making such efforts. The actual price volatility of Bitcoin is due to information asymmetry. Early investors with chips release chips to new investors at the current price, which will last for 3-5 years or even longer. During this period, users who enter the market early still have the opportunity to obtain high premiums. When the chips are dispersed to a certain extent, Bitcoin in the sense of storage and Bitcoin in the sense of circulation may go their separate ways. Bitcoin has really become digital gold, and other currencies such as stablecoins are the largest chips in circulation. By then, the Bitcoin pizza incident may become a legendary existence. At that time, there may really be a sense of frustration of missing an era. It should be said that the next 3-5 years is the best time to get on board, but it is not simply understood as spending 5,000 yuan to invest in 0.1 Bitcoin. In this case, even if it grows 20 times, what does it matter? If we add technical learning and cognitive improvement of the blockchain industry on the basis of investment, we can find opportunities in the gaps where blockchain is integrated into traditional application scenarios, and find a sense of security under the soft power of improved industry cognition. This is much more meaningful than pure speculation.

For young people who want to get a chance to turn over in the digital currency market, the Buddhist way of holding coins may not be suitable now. Learn some financial knowledge appropriately, grasp the law of the rise and fall of digital currencies, make reasonable fixed investments during the bear market (low cost, low risk), cooperate in the period of bear to bull (compound interest, expand the principal), and cash out at the peak of the bull market. This is the correct logic of playing the digital currency market.

Being brave enough to buy is a cognitive breakthrough, and being able to sell is the ability to seize the opportunities of the times.