Happy Bitcoin Pizza Day!
The story sounds a bit reckless by today’s standards. On May 22, 2010, Laszlo Hanyecz bought 2 pizzas for 10,000 BTC (worth over $93MM today). Far from crazy, it was the first example of a laudable goal of bitcoin: to be a functional, usable currency as a means of exchange for real goods and services. Hanyecz has never regretted his decision and that legendary purchase is a milestone in the history of the robust development of the Bitcoin economy.
We can laugh (or cry) about these moments in the past. How many of you look back and realize that you spent today’s equivalent of $50 on a single coffee or a beer? The stories are endless. And who knows? One day we may look back on our purchases in 2020, with bitcoin priced just below $10,000, and wonder what we were thinking. But the price of bitcoin isn’t the point; the point is that now you are able to use bitcoin in a real and meaningful way that was only a dream in 2010.
People may consider spending that much in bitcoins to be foolish, but purchasing pizza with bitcoins, no matter what the price, is a much better idea compared to some things people do with their coins. And the worst (and funniest) examples often involve a lack of awareness about security. Here are some practices that we have witnessed that we definitely do not recommend:
There’s treating your seed or passphrase without care or respect — like accidentally mixing your recovery seed with other items and putting it in a donation box, never to be found again. Or writing your passphrase on the back of an old love letter.
There’s the reckless — giving the only copy of your recovery seed to your girlfriend you just met at a party. Take a wild guess. What happened to the coins? And the girlfriend?
And then there’s just the ridiculous — burying your recovery seed in the garden and forgetting the location, or worse, moving away and leaving it there. Or having your mom throw away your seed because it was left out and didn’t look important. And yes, there’s even the classic “my dog ate my hardware wallet” excuse.
What do (almost) all of these stories have in common? The owners didn’t follow best practices for their bitcoin security.
So how could these losses have been prevented? It all starts with the proper storage of your recovery seed. Store your seed somewhere safe, locked where no one can access it, protected from fire or water. Don’t store it anywhere online, even in an encrypted folder. Don’t even store it offline on a digital backup. In 2013, a man in Wales realized, too late, that he accidentally threw away an old hard drive that held the private keys for his 7500 bitcoins, now forever lost in the landfill.
You might want to add a passphrase as well. But don’t make it too complicated. You shouldn’t write your passphrase down, so it has to be something you will not easily forget. Or you need to store it separately from your recovery seed.
You should use your bitcoins any way you desire, but don’t forget that your digital assets are valuable, and you should trezor your coins with the best security practices. Today, 11 years later, bitcoin is available to everyone to buy, sell, hodl, or use to buy everything you want or need.
And thanks, Laszlo. Bitcoin is still a great way to buy pizza.
