Would you spend £500 million on two pizzas? That is exactly what one man accidentally did back in 2010.
On May 22, 2010, a programmer named Laszlo Hanyecz paid 10,000 Bitcoin for two large pizzas. At the time, Bitcoin was a brand new cryptocurrency worth almost nothing. Today, those same coins would be worth enough to buy a fleet of private jets: making them the most expensive pizzas in human history.
The pizza story is legendary, but it's only the beginning. Bitcoin was designed to be a completely new way to move value around the world. It was the first money that did not belong to a government or a bank.
May 22 is now celebrated by fans all over the world as 'Bitcoin Pizza Day.' Many people celebrate by ordering a pizza and paying for it with cryptocurrency!
The Mystery of the Creator
Most famous inventions have a face behind them, but Bitcoin is different. In 2008, a person or group using the name Satoshi Nakamoto published a paper explaining how a digital currency could work.
Nobody actually knows who Satoshi is. In 2009, they launched the software and started the network. Then, in 2011, Satoshi sent a final email saying they had "moved on to other things" and vanished from the internet forever.
Mira says:
"A creator who just vanishes? That sounds like the beginning of a spy movie. It's cool that Bitcoin belongs to the people who use it, rather than one big company."
How It Works Without a Bank
When you use regular money, a bank acts as the middleman. They keep a private list of who has what. Bitcoin replaces the bank with a ledger which is just a giant, digital record book that everyone can see but nobody can cheat.
Bitcoin is a technological tour de force.
Instead of a bank clerk checking your balance, a global network of computers verifies every move. When you want to send Bitcoin, you use a digital wallet. This wallet has a private key, which is like a super-secret password that proves the coins belong to you.
The Mining Game
How does new Bitcoin get created? It's through a process called mining. But miners don't use shovels; they use powerful computers. These computers compete to solve incredibly difficult mathematical puzzles.
Imagine a town where there is a giant, indestructible glass notebook in the middle of the square. Every time someone buys something, the whole town watches as the transaction is written in the book. Once it is written, it can never be erased. That is basically how the Bitcoin network works!
When a computer solves a puzzle, it gets to add a new group of transactions to the ledger. As a prize for this hard work, the network rewards the miner with brand new Bitcoin. This is the only way new coins can enter the world.
Finn says:
"So miners are like digital security guards who get paid in Bitcoin for keeping the record book honest? That sounds like a big job for a computer!"
Digital Gold and the 21 Million Rule
One of the most important things about Bitcoin is scarcity. Most things, like apps or digital photos, can be copied forever. But Satoshi Nakamoto wrote a rule into the code: only 21 million Bitcoin will ever exist.
Bitcoin can be broken into tiny pieces. The smallest unit is called a Satoshi. 1 Bitcoin = 100,000,000 Satoshis This means you don't have to buy a whole Bitcoin. You can own a tiny fraction, just like you can have a penny instead of a pound note.
This limit makes Bitcoin like "digital gold." Because there is a fixed supply, people often see it as more valuable than money that can be printed endlessly by governments. Currently, over 19 million coins have already been mined.
Bitcoin is a remarkable cryptographic achievement and the ability to create something which is not duplicable in the digital world has enormous value.
The Halving: Why Supply Slows Down
To make sure those 21 million coins aren't all mined too quickly, Bitcoin has a built-in event called the halving. Every four years, the reward that miners receive for solving puzzles is cut in half.
The History of the Bitcoin Reward
This means that as time goes on, it becomes harder and harder to get new Bitcoin. The very last tiny bit of Bitcoin is not expected to be mined until the year 2140. That is a long time to wait for the final coin!
Bitcoin has a fixed supply, so it might hold its value better than regular money over long periods of time because no one can 'print' more of it.
The price of Bitcoin can change massively in a single day. If you need your money for something next week, it might be worth much less than when you started.
A Rollercoaster History
Bitcoin prices have been on a wild ride. In its early days, one coin was worth less than a penny. Since then, it has climbed to tens of thousands of pounds, but it often experiences volatility, which means the price can crash very quickly before going up again.
Mira says:
"The pizza guy who got those 10,000 coins must be the luckiest person ever! It shows how something that seems like a toy today can become huge tomorrow."
People use Bitcoin for different reasons. Some use it to send money across borders quickly, while others hold onto it like a collectible, hoping it will be worth more in the future. Whatever its price, it remains the first technology to prove that digital items can be truly rare and valuable.
Every informed person needs to know about Bitcoin because it might be one of the world's most important developments.
With a parent, look up a 'Bitcoin Price Ticker' online. Refresh the page after one minute. Did the price go up or down? By how much? Seeing how much it moves in sixty seconds shows you why people call it a rollercoaster!
Something to Think About
If you were the mysterious Satoshi Nakamoto, why do you think you would choose to stay secret instead of becoming famous for your invention?
There is no right or wrong answer here. Think about what matters more: getting credit for an idea, or letting the idea grow on its own without a leader.
Questions About Investing
Can I hold a Bitcoin in my hand?
Is Bitcoin legal?
What happens if I lose my private key?
The Future is Digital
Bitcoin changed the world by showing us that money doesn't always need a government or a building to exist. It started as a mystery and became a global phenomenon. Want to understand the engine that makes it all run? Head over to our page on blockchain-explained to see the tech behind the coins.
