Achi news desk-
On May 22, 2010, Laszlo Hanyecz, who lives in Florida, paid 10,000 bitcoin (BTC) for two Papa Johns pizzas in what is widely considered to be the first ever purchase with the then-experimental digital currency. The value of those coins would be worth just under $700 million today.
The story is well known, part of “Bitcoin history” and celebrated around the world every year. What is less known are Hanyecz’s other contributions to Bitcoin. According to Bitcoin historian (and former CoinDesk editor) Pete Rizzo, who published an in-depth thread about Hanyecz on Wednesday, the first man ever to spend bitcoins in a commercial transaction was also something of a confidant to Satoshi Nakamoto.
This year’s Pizza Day may also be seen in a new context following the release of 120 pages of Satoshi’s email correspondence with early Bitcoin developer Martti Malmi (aka “Sirius”), which raises the question of how much -it just so happened that the first purchase using bitcoin was for pizza. Malmi wrote the first FAQ for the Bitcoin.com website, presumably citing Satoshi’s responses to earlier queries. He wrote:
“Bitcoin is valued for what it can be exchanged for, just like all traditional paper money.
“When the first user publicly announces that he will make a pizza for anyone who gives him a hundred bitcoins, then he can use bitcoins as payment to a certain extent – as much as people want pizza and trust his announcement. Then a hairdresser who eats pizza and trusts him as a friend could announce that she starts accepting bitcoins as payment for a fancy haircut, and the value of the bitcoin would be higher – now you could buy pizzas and haircuts with them . When bitcoins are widely accepted, he could retire from his pizza business and still be able to use his bitcoin savings.”
Without reading too much into it, it’s interesting that the first bitcoin transaction for a real-world object (as opposed to peer-to-peer exchange for fiat) was pizza, given Satoshi’s analogy.
But, as Rizzo points out, Hanyecz has contributed much more to Bitcoin than just proving it could be used in actual purchases. He was also the first to translate Satoshi’s code for Apple’s operating system, allowing more people to run the actual Bitcoin software. And he was a frequent commentator on the BitcoinTalk forum, where he would answer questions about the software and how it was designed.
However, Hanyecz and Satoshi did not agree on everything. Hanyecz is also believed to be the first person to start mining bitcoin using specially designed chips to run complex computer programs called graphics processing units (GPUs), giving him a leg up against others who ran the source code Bitcoin on computers every day.
This started what Satoshi called the mining “arms race” that continues today (these days, bitcoin miners rely on factories full of application-specific integrated circuits designed specifically for test mining -of-work). Satoshi was concerned that because the user base was so low at the time, people would be deterred from joining the distributed network if they had to fork out cold hard cash to buy specialized equipment.
“GPUs would prematurely limit the incentive to only those with high-end GPU hardware,” Satoshi wrote. “I don’t mean to sound like a socialist, I don’t mind if wealth is concentrated, but for now, we get more growth by giving that money to 100% of the people than ‘to give to 20%.’
It is possible that Hanyecz’s post asking for someone to buy his family dinner was in response to this conversation with Satoshi, and a way for Hanyecz to redistribute his accumulated stash of bitcoins through the free market. In his initial request on May 18, 2010, which went unanswered for three days, Hanyecz offered 10,000 BTC for two pizzas (no anchovies!).
A few days later, on May 21, Hanyecz revisited the post office to ask about the possibility of raising the price. Eventually, 19-year-old Jeremy “Jercos” Sturdivant responded and offered to be on the other end of the trade. “I want to report that I successfully traded 10,000 bitcoins for pizza,” Hanyecz said at the time.
According to Rizzo, Hanyecz, who is still active in Bitcoin circles, made the pizza exchange an open offer, and may have ended up spending about $3 billion worth of bitcoins at today’s prices on Papa Johns pies. There is apparently also a commemorative plaque at the Jacksonville, Florida location commemorating the purchase.
While other people might rue the day they spent hundreds of millions of dollars for something so worthless, Hanyecz apparently has no regrets. “Somebody had to start it,” he said in an interview with CNN.
But, whichever way you slice it, with bitcoin again tracking all-time highs, the first bitcoin purchase was also the most expensive pizza ever sold.
(Except for the headline, this story has not been edited by The Kashmir Monitor staff and is published from a syndicated feed.)
Find out more from The Kashmir Monitor
Subscribe to get the latest posts delivered to your email.
