Laszlo Hanyecz, the early bitcoin user who famously made the first “real world” bitcoin purchase of two large pizzas from Jercos Pizzeria in 2010, has repeated the feat eight years later using the Lightning Network payments layer.
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The $95 Million Pizza Order
Hanyecz’s 2010 pizza order is famous for being the first known bitcoin payment for real-world products. He paid 10,000 BTC — which at current prices equals about $95.75 million USD.
While that sounds pretty expensive now, bitcoin needed someone to get the ball rolling to prove it could be worth anything at all.
The rationale for Hanyecz’s Lightning Network transaction is similar.
In a message dropped on the Lightning Network mailing list, Hanyecz outlined the thinking behind recreating the now-legendary May 17th 2010 purchase, writing how he hoped it would “[demonstrate] the basic premise of how this works for everyday transactions.”
Not as Simple as You’d Like – Yet
As in 2010, finding a way to atomically swap bitcoin for pizza proved difficult, so Hanyecz and the pizza shop crafted a solution through a friend in London who acted as the intermediary in the sale.
“As far as I know we don’t yet have pizza/bitcoin atomic swap software but we improvised and decided that I would need to provide the payment hash preimage to the delivery driver in order to claim my pizza.”
After the arrangements were made, Hanyecz created a Lightning channel and funded it with bitcoin. Once his friend had verified the funding, Hanyecz would be able pay the invoice and subsequently produce the agreed upon preimage, otherwise it was agreed the pizza would to be destroyed. It would work, Hanyecz wrote, because “I can’t get the preimage without paying the invoice.”
Creating the transaction was not as fluent and customer ready as it could have been due to the use of a middleman to talk with the pizza shop, but Hanyecz pointed out that this came at no risk to his bitcoin.
“[My friend had to prepay] his sub contractor to prepare and deliver the pizza to me, but at this point I have not risked my bitcoins, they’re just committed to a channel. I was given a bolt11 invoice which I decoded with the c-lightning CLI to verify everything was as agreed.”
Getting More Technical
The code for the payment looked like this:
Next up, the pizza was despatched and Hanyecz was asked by the delivery driver to produce the preimage.
‘I paid the invoice and instantly received the preimage in return….we agreed that the preimage would just the first and last 4 characters of the hex string. So my answer was 7241-a8c1.
Sharing the preimage would usually not be good practice, Hanyecz commented, however the delivery driver did not have the whole string, only “enough to verify it” — the first and last numbers.
Pizza Demonstrates Lightning Potential
While the point of the transaction was not to make a more efficient payment — it could have been conducted on chain (although not as quickly as by using Lightning) but it demonstrated that the Lightning Network certainly has plenty of potential.
If history repeats the way things went the first time Laszlo Hanyecz paid for pizzas with bitcoin, then we’re going to have some interesting years ahead.
And while the transaction may not be as groundbreaking as the one he conducted back in 2010, Laszlo wrote that, whatever happens, the “goal was just to play around with c-lightning and do something more than shuffling a few satoshi back and forth. Maybe eventually pizza shops will have their own lightning nodes and I can open channels to them directly.”
Will Laszlo’s new bitcoin pizza order be as legendary as his first? Tell us what you think in the comments.
Images via Laszlo Hanyecz, Pixabay