On May 22, 2010, Florida resident Laszlo Hanyecz paid 10,000 bitcoin {{BTC}} for two Papa Johns pizzas; This is largely considered the first purchase made with the then-experimental digital currency. These coins would be worth just under $700 million today.
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The story is well known, is part of “Bitcoin history” and is celebrated around the world every year. Less well known are Hanyecz’s other contributions to Bitcoin. The first person to spend bitcoin in a commercial transaction was also a confidant of Satoshi Nakamoto, according to Bitcoin historian (and former CoinDesk editor) Pete Rizzo, who published a detailed piece about Hanyecz on Wednesday.
See also: Bitcoin Pizza Day: Celebrating Pizzas Bought for 10,000 BTC
This year’s Pizza Day can be viewed in a new context following the release of Satoshi’s 120-page emailed correspondence with former Bitcoin developer Martti Malmi (aka “Sirius”); This raises the question of how coincidental the addition of pizza to pizza is. The first purchase made using Bitcoin was for pizza. Malmi wrote the first FAQ for the website Bitcoin.com, apparently quoting Satoshi’s answers to earlier questions. He wrote:
“Bitcoin, like all traditional paper currencies, is valuable for the things it can be exchanged for.
“When the first user publicly announced that he would make pizza to anyone who gave him a hundred bitcoins, he could use bitcoins as payment to some extent, as much as people wanted pizza and trusted that announcement. A pizza-eating hairdresser who trusts him as a friend may announce that he has started accepting bitcoin as payment for stylish haircuts and that the value of bitcoin will be higher; now you can buy pizza and haircuts with them. “Once Bitcoin is widely accepted enough, he can retire from the pizza business and continue using his Bitcoin savings.”
Without reading too much into it, it’s interesting, given Satoshi’s analogy, that the first bitcoin transaction for a real-world object (rather than peer-to-peer exchanges for fiat) was a pizza.
But as Rizzo points out, Hanyecz has done much more than prove that Bitcoin can be used for real purchases. He was also the first to translate Satoshi’s code for Apple’s operating system, allowing more people to run real Bitcoin software. He was also a frequent commentator on the BitcoinTalk forum; here he was answering questions about software and how it was designed.
The story continues
However, Hanyecz and Satoshi did not agree on everything. Hanyecz is also thought to be the first to begin mining bitcoin using chips specifically designed to run complex computer programs called graphics processing units (GPUs), giving him an advantage over others running Bitcoin source code on everyday computers.
This started what Satoshi calls a mining “arms race” that continues today (bitcoin miners these days rely on factories full of application-specific integrated circuits designed specifically for proof-of-work mining). Satoshi was concerned that because the user base was so low at the time, people would be discouraged from participating in the distributed network if they had to shell out cash to purchase specialized equipment.
See also: What is Bitcoin Pizza Day?
“GPUs would prematurely limit the incentive to only those with high-end GPU hardware,” Satoshi wrote. “I don’t want to sound like a socialist, I don’t care about concentration of wealth, but for now we get more growth by giving this money to 100% of the people rather than 20%.”
It’s possible that Hanyecz’s post asking someone to buy dinner for his family was in response to this conversation with Satoshi and a way for Hanyecz to redistribute his accumulated stash of bitcoin through the free market. Hanyecz offered 10,000 BTC for two pizzas (no anchovies!) in his first request, which went unanswered for three days on May 18, 2010.
A few days later, on May 21, Hanyecz revisited the post to ask about potentially raising the price. Finally, 19-year-old Jeremy “Jercos” Sturdivant responded and offered to be on the other end of the trade. “I just want to let you know that I successfully traded 10,000 Bitcoins for pizza,” Hanyecz said at the time.
Hanyecz, who is still active in Bitcoin circles, made the pizza swap an open proposition and may have ended up spending nearly $3 billion worth of bitcoin at today’s prices on Papa Johns pies, according to Rizzo. Apparently there is also a commemorative plaque in Jacksonville, Florida commemorating the purchase.
While other people might rue the day they spent hundreds of millions of dollars on something so mundane, Hanyecz apparently has no regrets. “Someone had to start this,” he said in an interview with CNN.
However, with Bitcoin back to new all-time highs, no matter how you slice it, the first bitcoin purchase was also the most expensive pizza ever sold.