If you’re active in the Bitcoin community, odds are you will know the name Laszlo Hanyecz. Making history back in 2010, he completed the very first Bitcoin transaction for an actual physical item. Spending 10,000 BTC on two pizzas, it might not have seemed like much back then, but now it represents a historic moment. Given Bitcoin’s current value, he won’t be spending 10,000 BTC on pizza anytime soon, but that hasn’t stopped Hanyecz from making history all over again. This time around, he’s bought another two pizzas using the Lightning Network, showing the world that this solution to Bitcoin’s scalability problem is certainly useable.
Snapping up a hot slice
Announcing the news via the Lightning-dev mailing list, the transaction proved to be pretty lengthy. Hanyecz needed his friend to sub-contract the delivery to a nearby pizza shop as a means to pay via the Lightning Network. While it’s not exactly taking the most conventional pattern to become a reality, it proves that the Lightning Network can without question be functional. Speaking on what this pizza purchase might actually mean, Hanyecz said, “this purchase demonstrates the basic premise of how this works for everyday transactions. It could just as well be the pizza shop accepting the payment directly with their own lightning node.”
A moment in time
When Hanyecz made his original pizza purchase in 2010, 10,000 BTC wasn’t considered to be a lot of money. How times have changed, as those pizzas would cost approximately $98,000,000 based on today’s Bitcoin value. This time around, Hanyecz paid 0.00649 bitcoins for two pizzas, equalling a $62 value. The purchase being made via the Lightning Network is obviously the key part of the story, but the sheer difference in value between the two transactions shouldn’t be overlooked. Comparing two periods of time, the purchase of four pizzas eight years apart shows just how far Bitcoin has come, with it certainly living up to its “digital gold” tag in 2018.
Pizza purchasing, but not as we know it
Now, the process of actually buying the pizza wasn’t exactly efficient, even if it was functional. The main issue came down to proving to the delivery driver that the pizza was in fact paid for. How he went about this was to show the driver the start and end four characters of the hex string of his Lightning payment hash preimage. Then – if it lined up with what the driver had – the pizza would be released to him. Long winded and certainly not the easiest way to grab a hot slice, Hanyecz made it clear that he would only accept the pizza if the lightning transaction could be done successfully. If it had failed, in his own words Hanyecz said that “the pizza would not be handed over and it would be destroyed.” Thankfully, the transaction was successful, but Hanyecz did issue a word of warning when it came to the security side of the transaction, stating that “it’s probably not a good practice to share the preimage.”
From VPN routers to fast food
The first Lightning Network purchase took place back in January. Reddit user revealed that he had purchased a VPN router via a TorGuard payment channel. Much like the pizza transaction that Hanyecz carried out, the significance of this could potentially be huge. Speaking about his own attempts at using the Lightning Network, Hanyecz said, “So is there any point to doing this instead of an on-chain transaction? For what I described here, probably not.” However, he was adamant that this was simply a bit of fun and a test of the Lightning Network’s capabilities, “The goal was just to play around with c-lightning and do something more than shuffling a few satoshi back and forth.”
The Lightning Network comes alive!
The Lightning Network is a potentially game-changing innovation that could make Bitcoin a functional day-to-day currency moving forward. While it’s not perfect, its recent progress has certainly shown the world that it is more than just an idea at this point. With developments seemingly occurring every week, the news that it’s now be used – albeit sparingly – to purchase items with is hugely encouraging.