May 22 is well-known as Bitcoin Pizza Day, as it marks arguably the most famous Bitcoin transaction ever. A Florida man named Laszlo Hanyecz paid 10,000 bitcoins for two large pizzas back then. With the Bitcoin price hovering at just over $10,000 today, that purchase now appears outrageous.
While there are arguments in both directions, let’s see how you can avoid being the guy who spent 10,000 BTC for a pizza.
While some are saying that in order to drive adoption, Bitcoin has to spent, the argument can be made in the other direction. Bitcoin has shaped up as an excellent store of value and it has even received massive endorsements as such.
Nobody wants to be the Pizza guy who spent 10,000 BTC for a pizza or for anything else, for that matter, when there’s the chance that its value will grow up exponentially.
But it’s not just Bitcoin’s growth potential that’s to be considered. The value of the USD, arguably the world’s most powerful fiat currency, has been declining over time. In fact, information from officialdata.org shows that $100 from back in 1799 are currently worth upwards of $2,000. That’s how much value the Dollar has lost over time.
In other words, it appears that it’s a much better use case for people to hold on to their Bitcoin as a store of value which is likely to go up while spending their Dollars as something which will continue to devalue.
And for those who are saying that this is what actually prevents Bitcoin from getting adopted – there’s always the gold argument. Gold is perhaps the most well-known and most adopted commodity and it’s used primarily as a store of value. Bitcoin has not only been compared to gold many times, but it has actually shown a lot of better characteristics. For instance, unlike gold, it’s programmable, we know its exact parameters, it’s easily transportable throughout the entire world, and it’s entirely distributed and transparent.
Bitcoin as a Store of Value
Bitcoin’s price has been relatively stable during the last few weeks, whereas 2019 has been quite bullish overall. Compared to 2010, Bitcoin’s USD value is exponentially higher – 10,000 bitcoins were worth $41 nine years ago, whereas the same amount of bitcoins is now worth north of $100 million.
When the nine-year price increase is considered, the logical conclusion might be that Bitcoin is best suited to be a store of value, rather than a method of payment. The chairman of the US Federal Reserve, Jerome Powell, even weighed in, stating, “Really, almost no one uses Bitcoin for payments. They use it more as an alternative to gold, really. It’s a store of value, it’s a speculative store of value, like gold.”