Bitcoin history tied to Jacksonville; why the government may fear cryptocurrencies' potential

JACKSONVILLE, Fla. — A local man’s decision to buy pizza with Bitcoin is opening up a new frontier of how people pay for everyday items, and the government may fear its potential.

"I just told people I wanted a pizza and I wanted to pay with Bitcoin,” says 37-year-old Laszlo Hanyecz.

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The computer programmer, who lives in Jacksonville, created a thread in an online forum in 2010, saying, "I'll pay 10,000 bitcoins for a couple of pizzas." A user from England took him up on the offer and sent the pizzas to his home. The 10,000 Bitcoins were worth about $40 at the time. Today, they would be worth almost $100 million.

"People ask me, 'What an idiot, why didn't you keep that Bitcoin?'" Hanyecz told Action News Jax. "Well you know, someone had to start it off."

The pizza was purchased at a Papa John's on Atlantic Boulevard, and there's even a  plaque on the wall with the date May 22nd, 2010, and a proclamation that Jacksonville is the "Home of the first Bitcoin purchase." 
 
"It's nice to see history made here," says general manager Tim Mosbach.

Bitcoin and other cryptocurrencies work like buying and selling stocks. The difference is each bitcoin is a computer file which is stored in a digital wallet app on your smartphone or computer. Every transaction is encrypted  and is impossible to counterfeit. 
 
"Do you think the government fears cryptocurrency?" Action News Jax's Ben Becker asked Don Wiggins, Professor Emeritus of accounting and finance at the University of North Florida. "I think they do," Wiggins said.

Bitcoin and other Cryptocurrencies are not controlled by banks or the government. "It's anonymous, and nefarious activities, as well as perfectly legitimate activities, can take place without the government being able to track payments," says Wiggins.
 
That's unlike digital payments like credit cards, PayPal, Apple Pay and bank transactions that are tracked.

“Do you think a cashless society is the future of money?” Becker asked Hanyecz. “I do,” says Hanyecz. “I think everybody should learn about it, because it's not going away.”

There are downsides to cryptocurrencies like Bitcoin, because every transaction is permanent and users have no recourse if they fall for a fake Bitcoin exchange. Experts say to watch for spelling mistakes and promises of unrealistic returns when trading cryptocurrencies.

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