On 22nd May 2010 Laszlo Hanyecz, a programmer, paid a fellow Bitcoin Talk forum user 10,000 BTC for two Papa John's pizzas. When the technology was just over a year old back then, that was worth roughly $25, but is $100m in today's exchange rate!
At bitcoin's all-time high last December, the pizzas would have been worth an eye-watering $200m, making them likely candidates for the world’s most expensive pizzas.
Now, May 22nd is widely celebrated as 'Bitcoin Pizza Day' since the pizza transaction was recognised as the first real-world bitcoin transaction. Many cryptocurrency enthusiasts come together every May 22nd and have a decorated pizza party to celebrate while raising a slice to Hanyecz's infamous hunger pangs that paved the way for Bitcoin’s early merchant adoption.
"Good people, harken and know that on this day the one called Laszlo did buyeth the first Bitcoin Lightning Pizzas, bringing us into this new era of glory and cheesy goodness," blockchain researcher Brian Lockhart wrote on the Lightning mailing list.
A reddit user also commented:
"This dude Laszlo has nerves of steel and should be in the first batch of Mars colonists."
For Hanyecz, it's not about hunger or simply dumping Bitcoin. It's about the vision of bitcoin as a faster, cheaper, and better online payment system finally being real.
He says that on his 2010 pizza purchase, he paid a fee of 1 BTC, and it didn't matter then since he was happy to buy anything with it. He was spending this internet money to purchase a real good.
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History Repeating Itself
A couple of days ago, on Feb. 25, he did it again. This time, he bought two pies using the Bitcoin lightning network.
The lightning network is in the very early stages of development and still an experimental second-layer bitcoin application. If it lives up to expectations, widespread adoption will follow. The proponents were Joseph Poon and Thaddeus Dryja. It all started in a 2015 white paper. It was presented as a solution to Bitcoin's serious scalability problem: the blockchain's capability to process transactions maxes out at a few transactions in every second, compared to tens of thousands per second for major credit card networks. This accounts for the long wait times and is known to cause occasional spikes in the already high transaction fees.
The $100 million pizza
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Hanyecz had to pay much, much less for his pizzas this time. - Just 0.00649 bitcoin. The popular 2010 pizza transaction was iconic, not just because it marked bitcoin's entry point into the present-day economy, but because of how much those pizzas would be worth today. On Feb. 25, the figure was $98,300,725 according to @bitcoin_pizza, a twitter account that broadcasts the dollar value of the pizza to over 6,000 followers daily.
"I came out to post about lightning because I do believe in it. And it's still in its very early stages, but the lightning network promises to bring back that functionality of being able to buy pizza with bitcoin." - Coindesk
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Even though the Lightning project is nearing completion, there are still issues. The biggest problem that remains is the usability of the network as explained by Hanyecz's recent purchase.
The thing is since lightning relies on what they call a bi-directional payment channel, Hanyecz had to hire a middleman.
With a bi-directional payment channel inherent to the Lightning network, both parties - the buyer and the seller need to set up the payment channel in order to accept payments. Because the pizza place could not set up a Lightning payment channel, Hanyecz paid a friend to set up the channel to process the transaction. Like the 2010 transaction where Hanyecz paid Jeremy Sturdivant to make the pizza purchase, Hanyecz paid one of his friends, who was also running a lightning node to purchase pizza's for him using dollars. While using a middlemen isn't actually a necessity once widespread adoption occurs, this transaction shows the basic principles of how this works for everyday purchases, according to Hanyecz.
Why I am HODLing Steem
The whole point why I recall the May 22 purchase (although it’s only February) is that I believe in the future growth of Steem. -Not only because we’re on Steemit but because of the sound principles where it operates. Imagine widespread adoption triggered by SMTs. Widespread use is one of the main driving factors for its price like what we see in Bitcoin. Now for Bitcoin, it seems the main reason for the price decline is not all people who want to use it can use it (because of slow speed and high transaction fees). Without these problems, the price would have continued skyrocketing for obvious reasons. These problems have long been resolved by many altcoins including Steem. It normally takes only 3 seconds to confirm a transaction with Steem and there are no fees. You can also transfer easily to another Steem user with pseudonyms (instead of long addresses with random characters). Once widespread adoption begins, it’s but normal to expect soaring prices. Cashing out all your Steem today (just in my opinion) is detrimental to the growth of one's portfolio. I say it for emphasis but again, I am holding on to my Steem and I'm just sharing my personal point of view. This is not financial advice.
Please upvote, resteem and follow me, thank you.
I heard about this and think it's great. I too am holding steem and in fact, I liquidated my other cryptos and bought steem because I like earning and interacting with the community instead of watching a chart. I haven't spent on a "good" yet but I did buy tea with bitcoin in 2014 lol. I don't want to know what it costs
It's one of the best comments I have seen so far! Yes, it's so much better interacting and learning from many people in the community than watching a boring chart and doing your own research. Even those who only watch charts contact other investors through their own communities but with Steemit, Steem is fully integrated and the earnings are directly determined by each member of the community.
I really had a hard time deciding if I should sell my eth to buy more steem. I finally did it because I spend my time here and may as well be "all in". I feel like it is investing in my belief system. If I really believe in Steem blockchain then I should try and become an expert on it instead of all the other ones.
Such a nice read. These early visionaries really blew the walls opened for all of this to happen. From those early days, coming to this point in time. Really sky's the limit for the crypto currency world.
Happy bitcoin pizza day! :)
Thanks bro!
Steem is going in right direction
I believe so!
wow,,,i love this
waow what a delicious pizza it is
I believe so too! Haha!
I definitely agree with you about holding Steem. Sure the number of generated Steem tokens double every year, but I think the number of newcomers is growing at a faster rate. Imagine the number of people wanting that Steem tokens (same for Bitcoin) once the platform reaches mass adoption.
Hahhahaha, poor fellah. At least he is a modern day legend now.
I often tell this tale to friends who are interested in Bitcoin and haven't heard the story. xD *cries
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STOPNice post
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Followed you!
People always sneer at how the Bitcoin pizza folk, but not realizing how much more Bitcoin he could have if he can just spend 10k of it for a pizza.
Btw, not selling my Steem before it hits $100!
That Pizza better be Gold plated ! :D