World’s Most Expensive Pizza: The First Bitcoin Transaction
Having had an extremely volatile but successful beginning, Bitcoin is just now starting to penetrate into the mainstream. Corporate giants such as IBM and Microsoft are integrating its underlying technologies into their services while also helping small business utilize the blockchain.
With its massive explosion in price and investor interest over the past few years, its proponents have experienced some big wins and some even bigger losses. In fact, in May of 2010, two pizzas were purchased for 10,000 Bitcoin. At that time, 10,000 BTC was worth just $41. If this amount of Bitcoin were to have been saved, it would now be worth well over $100 million. So, what motivated this transaction to take place for what is now such an outrageous price?
Humble Beginnings of Bitcoin
In 2010, Bitcoin holders were largely uncertain of its future. Its main hook into the mainstream media was its use in online black markets for the trading of drugs, guns, ammunition, and other illicit products and services. While this was tainting its name, most people did not realize that the black market showed what Bitcoin was capable of — instant digital transactions that were completed and verified on a distributed ledger.
The historic Bitcoin pizza transaction was completed by a man named Lorenzo Hanyecz, an early technical developer of Bitcoin. When Bitcoin was worth just pennies, it was hard to make purchases to test its efficacy in “real world” markets. So, Lorenzo decided to test out its use case and attempt to make a purchase with Bitcoin.
A few days after he announced his plan, he was contacted by a young man in Florida named Jeremy Sturdivant who offered to arrange the deal. This event occurred on May 22nd, 2010, a crypto-holiday now celebrated and widely known as Bitcoin pizza day.
The total of the order was about $41, which took over 10,000 Bitcoins. This amount is worth hundreds of millions today, illustrating the massive boom in value that the currency has experienced since these humble beginnings. It is thanks to transactions and sacrifices such as this that people were able to begin to see the true use cases of cryptocurrency, and eventually more concepts like smart contracts, decentralized applications and other innovations. They saw that cryptocurencies like Bitcoin could successfully cut out middlemen, unnecessary steps, and did not leech value from your internet activity or purchasing desires. The Bitcoin pizza was bought for a flat rate, and did not include a delivery fee or tax of any kind.
Due to this idea, there is now a platform called PizzaForCoins that will find the closest pizza delivery near you and organize its delivery to you for a flat rate, truly fleshing out Hanyecz’s original vision for the Bitcoin pizza transaction.
Why Is This Day Celebrated and Remembered?
People may learn of this event and wonder why such a seemingly insignificant transaction is still celebrated so many years later. While it may seem like a normal purchase, it was the first of its kind. There have been millions of transactions on the Bitcoin blockchain since then, all of which have helped drive its growth and further illustrate its value to businesses and society.
Without this simple illustration of its use, others might not have been influenced by its simple yet revolutionary application to the way value is exchanged between two parties. It was no longer necessary to rely on a bank or third party to verify the trust between two parties. Transactions could now occur P2P without the need of any third party or middleman, and the data that you generate would not be available to virulent ad machines that leech value from the users who are the drivers of the initial value in the first place.
While these implications may seem like a stretch when talking about such a simple transaction, it actually represented a much more important turning point, one that showed Bitcoin, if able to correctly scale the technology, could indeed help improve business organization throughout society.
The Future of P2P Transactions
The Bitcoin pizza transaction was the beginning of a craze that is still gaining steam to this day. Bitcoin has now separated into two protocols, reached highs of as much as $19,000 USD, as compared to $0.08 per coin in May, 2010, and is considered to be the hottest investment available. Its technology is now being used by large corporations like Microsoft and IBM to help business streamline transactions and better implement their strategies and services to their customers. All of this hype isn’t ill found, as the technology allows for:
- Improved data management
- Increased efficiency due to AI learning capabilities and better access to data
- Removal of fraud
- Removal of third party interference
- Improved security and privacy
These benefits are just an overview, as companies can now be more closely connected with their customers, and we have only seen the beginning of what a next-generation business organization might look like. Traditional business practices are coming to an end, and smarter, faster, more customer and community-oriented structures are beginning to manifest throughout multiple sectors of the economy.
The decentralized economy is the new standard, and businesses are catching on. Marketing companies are noticing that ad machines are not efficient and are simply leeching all of the profit away from the true holders of value – users. Future-minded companies such as Brave and Kik are aiming to turn their industries on their heads and introduce a new standard of organization that incentivizes participation and an active role in decision making.
2018 is set to be the year that we begin to see some big names implement new structures, and also the year that is sure to introduce to society some new faces in cryptocurrency and blockchain that have the potential to be the Google and Facebook’s of the future. The first Bitcoin transaction will always be the humble beginnings of a technology that has the potential to decrease the wealth gap, improve small business success, and return power to the community of hard working, future-minded individuals in the population.
