Bitcoin

The True Story Of Laszlo Hanyecz (a.k.a. The Bitcoin Pizza Guy)

A Bitcoin Legend: The Man Behind The First Bitcoin Transaction

Pantera
The Crypto Kiosk
Published in
8 min readJan 24, 2024

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Join us on a journey back to the early days of Bitcoin as we unravel the fascinating story of Laszlo Hanyecz, the man who made history by completing the first-ever documented Bitcoin transaction for two pizzas.

Watch now The Trust Story Of Laszlo Hanyecz (a.k.a The Bitcoin Pizza Guy):

Whether you’re a seasoned crypto enthusiast or just getting started, this video provides a captivating look into a pivotal moment in Bitcoin’s history and the man behind the iconic pizza purchase.

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Transcript:

Part I: Introduction

The Bitcoin community has treated Laszlo Hanyecz poorly, often overlooking his contributions to Bitcoin.

We’ve all heard about Bitcoin Pizza Day and the ‘pizza guy’ who spent ten thousand Bitcoins on two Papa John’s pizzas, but not much about Laszlo’s early involvement or his groundbreaking contribution to Bitcoin.

Reporters that interview Laszlo and ignorant content creators will just try to calculate the current value of the Bitcoin while poking fun at him for supposedly buying the world’s most expensive pizza.

It is important to note that the entire community was using Bitcoin for payments until 2017 when the high fees and scalability stagnation made Bitcoin impossible to use.

Does Laszlo deserve to be mocked or is this perspective the result of the poor collective judgment the Bitcoin community usually exhibits?

Clearly, Laszlo deserves more credit for his role in Bitcoin.

Part II: An OG Bitcoin Developer

Many in the crypto scene often label him as the ‘pizza guy,’ highlighting how he unwittingly used his mined Bitcoins as cash to purchase pizzas and other items.

However, this was always the purpose of Bitcoin, to act as peer-to-peer electronic Cash and Laszlo had only found a way to make Bitcoin work.

Unfortunately, the ‘HODL’ mindset gained traction in 2014, shifting Bitcoin from its intended role as a peer-to-peer electronic cash system, as outlined in the whitepaper.

Currently, Bitcoin BTC is a speculative asset, a game at the hands of fund managers and a small elite, having strayed far from its original purpose.

The once-enthusiastic community, drawn to the revolutionary potential of a decentralized peer-to-peer electronic cash system, now faces the harsh reality of Bitcoin’s downfall.

Part III: No Regrets

Laszlo never regretted spending his Bitcoin, unlike what newcomers might think.

Bitcoin was supposed to become money for the world and he was the first to use it as such, before the herd followed.

It was perhaps just a hundred individuals involved in the project at the time, and Laszlo was one of the few developers actively contributing.

Bitcoin back then had no value, just a fraction of a penny, and limited options were available to trade between Bitcoin and fiat currencies.

More than one year after Bitcoin was launched, and still, it wasn’t accepted anywhere.

Laszlo did use Bitcoin as it was supposed to, and he became a Bitcoin Legend, one that we need to remember for everything he did to help Bitcoin succeed during the early days.

He was the first Bitcoin spender, and many more followed.

Bitcoin started growing as a digital currency and enjoyed exponential adoption for years.

Yet, at a later stage, the community abandoned the payment properties. Coincidentally, this started when Blockstream devs decided no further development on-chain scaling was needed, but started pushing secondary networks as a solution to scalability, like LN and Liquid.

We know how this turned out to be as on-chain adoption regressed to a point where nobody uses Bitcoin BTC for payments anymore, and Lightning apparently was never the solution either.

Laszlo’s contribution to the development and promotion of Bitcoin in the early days is not presented in the media as much as the fact of the first-ever purchase made with Bitcoin.

The pervasive censorship on Reddit, played a pivotal role in steering Bitcoin toward a new direction, far from what the Bitcoin whitepaper describes.

Yet, before all that, Bitcoin was already disrupting commerce by getting massively adopted as a form of digital cash. And Laszlo was the one that kicked the hornet’s nest.

Part IV: The First Use Of Bitcoin For Payments

The pizza purchase marked a historic day for Bitcoin.

This was the first time Bitcoin was used in payments.

Sadly, the current BTC community does not praise Laszlo for his commitment and efforts to promote the use case of Bitcoin so early.

Many believe that using Bitcoin is unwise as they anticipate the cryptocurrency’s value to further increase in the future.

However, we should note that Laszlo bought two pizzas using Bitcoin, when Bitcoin was not even traded on an exchange.

Therefore, he gave Bitcoin a price and a purpose.

To me, the day that I was able to buy food with bitcoin, it made it real to me,” Laslzo said in an interview.

Laszlo did not stop with that purchase but kept spending his mined Bitcoins for several more months. He utilized his mining advantage with the GPU script he coded, and mined over 100,000 Bitcoins. He kept mining and spending his Bitcoins until mining became more difficult as people were putting more hash power with CPU and GPU farms, and the mining difficulty kept rising.

It was soon that mining reached industrial size and the odds of solo mining evaporated.

By the end of 2010, Satoshi Nakamoto abandoned the project and left it at the hands of his successors, Gavin Andresen, Mike Hearn and the rest of developers.
People were using Bitcoin and adoption was increasing exponentially.
Laszlo, had inspired a movement.

Part V: The Other Bitcoin Pizza Guy!

Still, the story as told so far has another gap that needs filling.

Who was the buyer and what did he do with the Bitcoins he received from Laszlo?

Jeremy Sturdivant a.k.a. Jercos, was 19 when he accepted the deal.

What did he do with his Bitcoin? He also spend it:

“The bitcoin went into a wallet that was later liquidated to cover expenses while travelling the US with my girlfriend at the time,” , Jeremy mentioned.

“If I had treated it as an investment, I might have held on a bit longer, but I certainly would have bailed out with a lesser value, perhaps the celebrated $1=1BTC mark”.

Part VI: Laszlo On Satoshi Nakamoto

Laszlo describes Satoshi as someone bossy and secretive, a paranoid person who shared no personal information even when asked. In retrospect, he determined that possibly this was the best course of action Satoshi could have taken.

His interactions with Satoshi were weird, with Satoshi often administering lots of work to Laszlo while he was just a volunteer for the project.

Laszlo was already fully employed and could allocate just a fraction of his free time for the project, and he also had a family and children to look after.

He has publicized one email he received from Satoshi regarding his GPU mining prototype which he had previously announced on the bitcointalk forum.

This GPU code, as Laszlo later mentioned, allowed him to mine thousands of Bitcoin daily.

Apparently, Satoshi already knew about GPU mining, but still asked Laszlo limit his activities with GPU mining, as at the time it was the only thing that attracted people to Bitcoin.

Moreover, Satoshi mentioned that he did not mind if wealth was concentrated, correctly assuming that Bitcoin had decent odds of growing in value in the long run.

Later, Laszlo mentioned in an interview that Satoshi was already aware of GPU mining and ready to use it to prevent 51% attacks. Laszlo has also mentioned that Satoshi had shared with him his own GPU miner code after that email.

According to Laszlo, Satoshi was afraid of an early network attack, so he had to be ready with options available to defend the system.

On a secondary note in this story, we have to mention that we find several people who often claim that Satoshi was wrong about several things and one of them was that he couldn’t predict ASIC chips.

This is a bit absurd since ASICs existed since the 70s. Satoshi never mentioned ASIC chips, but clearly knew that application-specific integrated circuits already existed for decades. It would not be difficult to fabricate a model that solves the SHA-256 cryptographic algorithm that Bitcoin uses for mining.

Furthermore, there is a second false argument, that Satoshi did not predict pool mining.

Yet, on November 28th, 2010, he did exactly that with this post in bitcointalk, where he actually went on to describe exactly how pool mining would work!

While Laszlo had several times asked questions of a personal nature, Satoshi was always dodging them and never shared anything about his whereabouts.

Certainly, it would assist researchers if Laszlo releases the rest of his communications with Bitcoin’s creator, as currently, only one email has been made public..

Part VII: The New Narrative

For the majority of participants in Bitcoin BTC today, the focus is on the price, but the purpose is obscure.

Bitcoin was fighting the banks and a corrupt legacy financial system.

Yet, today, the Bitcoin BTC community is cheering for ETFs, banks and centralized stablecoins, while Bitcoin influential personalities are acting as reckless gamblers instead of serious professionals.

The whitepaper, the directions pointed out by Satoshi, the intention of the early community, and the concept of peer-to-peer electronic cash, have nothing to do with the BTC version of Bitcoin.

Most of the people who were involved in Bitcoin from the early days have now moved on to other things, since Blockstream has deviated from the original idea of creating a decentralized and peer-to-peer electronic cash system.

Even the creator of the “HODL” original meme denounced the BTC version in 2017, just as most of the early adopters have.

Its journey from a digital currency promising financial freedom and banking the unbanked to a speculative tool manipulated by market forces raises questions about its future trajectory.

Part VIII: Conclusion

Laszlo Hanyecz never regretted spending his Bitcoin because this was the ultimate purpose.

Bitcoin was created as a digital currency revolution, a peer-to-peer electronic cash system.

The argument that the pizzas bought by Laszlo today cost millions is a misconception since Bitcoin was used just by a few tech-savvy individuals in 2010 and its price was less than a penny.

No one could have predicted that Bitcoin would reach tens of thousands of dollars, at least not for a couple of years more. In fact, the price of Bitcoin dropped to zero several times during its first years.

At a time when no one could foresee how the Bitcoin experiment would unfold, Laszlo provided the ultimate proof that it could be used as money.

It is important to acknowledge and appreciate the contributions of Bitcoin legends like Laszlo Hanyecz, Gavin Andresen, and Mike Hearn who, together with the creator, Satoshi Nakamoto, have had a profound impact on the development of Bitcoin and the entire cryptocurrency industry.

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Pantera
The Crypto Kiosk

Sharing my seven years of experience with cryptocurrencies.