This Pizza Cost $750,000

It is widely believed that the first real-world bitcoin transaction took place on May 21st, 2010. Laszlo Hanyecz, a programmer living in Florida, sent 10,000 bitcoin (BTC), the online-only, open source cryptocurrency, to a volunteer in England, who then spent about $25 to order Hanyecz some Papa John's. Hanyecz then uploaded the image above as proof that the transaction had been successfully completed.

It was a major milestone in bitcoin's short history. And as of right now, it cost Hanyecz three-quarters of a million dollars. You are looking at a $750,000 pizza. 

Thanks largely to the financial crisis in Cyprus, which has spurred Europeans to buy up bitcoins at a blistering rate, a single BTC is now worth a record 75 US dollars. But three years ago, when the currency was unveiled in February 2010, one bitcoin was worth just $0.03. For months, it stayed that way. Programmers were mostly just "mining" the crytopcurrency and discussing the project on BitcoinTalk.org. Laszlo had a bunch, and just thought it'd be kind of a kick to see if he could use it to get dinner. So he posted a hitherto unheard-of proposition to BitcoinTalk.org, the primary forum for the currency on that fateful day in May:

I'll pay 10,000 bitcoins for a couple of pizzas.. like maybe 2 large ones so I have some left over for the next day.  I like having left over pizza to nibble on later.  You can make the pizza yourself and bring it to my house or order it for me from a delivery place, but what I'm aiming for is getting food delivered in exchange for bitcoins where I don't have to order or prepare it myself, kind of like ordering a 'breakfast platter' at a hotel or something, they just bring you something to eat and you're happy! ... 

If you're interested please let me know and we can work out a deal.

Thanks,
Laszlo

Many of Laszlo's fellow bitcoin forum-frequenters were skeptical. Ender_x replied "10,000... Thats quite a bit.. you could sell those on https://www.bitcoinmarket.com/ for $41USD right now." The notion that the BTC could be used in the real world hadn't quite sunk in, as he wished him "good luck on getting your free pizza." Bitcoin still seemed more like an experiment or a hobby than anything with actual monetary value. Soon a user called Xunie piped in: "I'd buy you a Domino's for you, if I knew how to pay from Europe! (Like, how is Domino's pizza in the United States gonna receive my payment?, Credit card?)"

Laszlo replied: "A lot of pizza places have online ordering, my wife and I use that sometimes with Papa John's.  Almost all of them will accept credit cards by phone as well "

But that line went dead, so he tried again. And here's how it played out:

Interesting indeed. The next day, Laszlo logged back on and announced that he had completed the first ever transaction of cryptocurrency for real-world goods. "I just want to report that I successfully traded 10,000 bitcoins for pizza," he wrote. He linked to a batch of images for proof. 

After the transaction was completed, a BitcoinTalk member established a ticker that would from that point on include the Bitcoin Pizza Index, or the current dollar value of the amount of bitcoin Laszlo had spent on pizza. Ounce.me has been a standard bitcoin currency monitor ever since: 

As you can see, 10,000 BTC is now worth approximately $750,000. Bitcoin Talk is now home to another infamous thread: Dumbass who bought a pizza for 10,000 bitcoins. 

Except Hanyecz was anything but a dumbass, and the numbers are a bit misleading. After all, if someone like Hanyecz didn't make that initial purchase to validate bitcoin as a currency in the first place, it'd likely be worth nothing at all today (even if Hanyecz might currently be wishing someone else had gone and blazed the trail). The currency was essentially worthless when he bought the pie, so calling for delivery could even be considered a wise personal investment. Sure, if he had kept the 10,000 BTC, it'd technically be worth $750,000 now. But if he never helped prove the currency could work, it might still be valueless altogether. The stunt ended up helping to raise the value of the rest of his bitcoin, after all—along with everyone else's. As such, Hanyecz, or just 'Laszlo' as he's known in the bitcoin community, is something of a hero.

After the initial transaction, Hanyecz apparently reprised the offer a number of times on BitcoinTalk, though he had to cap it off in August 2010, just months after making the first one. He wrote a post on August 4th that read, "Well I didn't expect this to be so popular but I can't really afford to keep doing it since I can't generate thousands of coins a day anymore   Thanks to everyone who bought me pizza already but I'm kind of holding off on doing any more of these for now."

Laszlo was one of the first bitcoin miners, and early on, his coffer was likely overflowing—the original miners were still minting 50 BTC every 10 minutes, remember, and had fewer competitors with which to share the spoils. Even when the value of bitcoin promptly began to rise, and the Bitcoin Pizza Index hit $270,000 in 2011, Hanyecz quipped online that "I don’t feel bad about it. The pizza was really good.”

Additionally, the transaction gave faith to those early community members. Member da2ce7 wrote in November of 2010, "It is so remarkable how far this economy has progressed in such a short time. This breaks every record that I can think of." It also became an object of fascination—the $600 pizza became the $2,600 pizza became the $18K pizza and so on. It grounds the intangible digital currency in a common artifact, a stranger-than-fiction origin story.

Now, over two years later, bitcoin is more widely accepted than ever before. There are startups built with the express purpose of converting bitcoins into pizza: PizzaForCoins.com launched last Febrauary. And now we have some Reddit-verified proof that it has worked for the first time in the UK. 

A Reddit user going by ozzysmygod claimed to be the first to successfully use the site, and he, too posted pics of the purchased pizza—looks like we're going to start celebrating Bitcoin milestones with pictures of pizza from here on out. 

And the two monumental transactions each speak volumes about the evolution of the crytocurrency that's kept on chugging: one was executed on a whim, for the hell of it, in the halls of a half-empty online forum populated by a few diehard programmers. Now, the mere creation of a website that orders pizza for bitcoin gets you a writeup in the likes of Forbes and the Wall Street Journal.

Meanwhile, bitcoin is getting more and more valuable. It's still incredibly volatile, and there are still relatively few real-world marketplaces that accept bitcoin. Yet Reuters recently reported that Goldman Sachs and Morgan Stanley have been spending time in bitcoin exchanges. Investors are taking it seriously. The value of the crytopcurrency may yet hold, or even ascend further. Then those lucky few, present during the birth spasms of the first digital money mint, might make out like bandits. Laszlo among them. In today's BTC, that famous pizza may actually turn out to be the most expensive ever delivered. 

Near the end of 2010, a Bitcoin Talk member named Rubick wondered, "Will this eventually become the world's first million-dollar pizza?" 

It's starting to look like it might be.

Source:Motherboard