By Brian Maher
This post The Most Expensive Pizza Pie in History appeared first on Daily Reckoning.
p>The date is May 22, 2010…
And American software developer Laszlo Hanyecz is hungry… for pizza.
But this Hanyecz is in puckish spirits today, like a schoolhouse sprite out to pull fire alarms… a party-going prankster with a buzzer in his hand… a jester pulling noses.
So he donned his clown’s motley and offered 10,000 bitcoins — a new and virtually unknown “cryptocurrency” — in exchange for two large pizzas from his local Papa John’s.
Hanyecz estimated these bitcoins at 0.003 cents each… $30 in all.
Enough, that is, to meet the price of two large Papa John’s pizzas.
But he couldn’t have believed anybody would actually accept bitcoins.
As well accept payment in Ponzis… Madoffs… Yellens.
Ah, but economists have something they call the greater fool theory…
And some greater fool — in England if you can believe it — actually accepted Hanyecz’s offer.
From across the Atlantic Ocean, this greater English fool arranged the delivery of two large pizzas to some American door… in exchange for 10,000 bitcoins.
Hanyecz even furnished photographic evidence in proof of delivery:
Thus concluded the first ever Bitcoin transaction in history… between an American and an Englishman for two large Papa John’s pizzas… on May 22, 2010.
Question: How much do you think those 10,000 bitcoins are worth today?
Answer anon.
But first, what exactly is a cryptocurrency like Bitcoin?
Investopedia defines a cryptocurrency thus:
A cryptocurrency is a digital or virtual currency that uses cryptography for security.
Pretty thin gruel.
So let us turn to our resident cryptocurrency authority, Louis Basenese…
Louis is perhaps the world’s premier venture capital analyst, hunting investment opportunities in breakthrough technologies.
And we’re pleased to report that he’s now happily stabled in Agora Financial’s pens…
Louis:
Essentially, a cryptocurrency is a digital currency that operates outside of any government control. That means these currencies cannot be manipulated by central banks like our own Federal Reserve or other central banks around the world.
Angels of mercy — a free market currency beyond the control of central banks?!
It’s a libertarian’s dream. And a central banker’s nightmare…
How do they goose the economy if they can’t monkey the currency?
And cryptocurrencies’ drummers say they contain a built-in safeguard against inflation.
Only a certain amount of bitcoins can be created, for example, and no more.
Apparently, 21 million bitcoins can be “mined” — that’s the term they use (curious how they invoke a psychological linkage to gold).
Some claim cryptocurrencies are even rarer than gold and make for a better gold standard than gold itself.
And are therefore an ideal replacement for the dollar.
Rafe Furst, cryptocurrency expert:
Bitcoin (and most other cryptocurrencies) are designed to have a fixed supply. Once 21 million bitcoins have been mined, there will be no more to mine… which means that their scarcity value is much greater than gold, silver or any physical commodity.
As of this writing (Feb. 20), about 75% of all bitcoins have been mined — the last one is projected to be mined around …read more
Source:: Daily Reckoning feed
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