On May 18, 2010, when bitcoin was still measured in cents per coin, a Hungarian truck driver became famous for effecting the first real-world cryptocurrency transaction, buying two pizzas with the cryptocurrency. Laszlo Hanyecz paid what would now be an unthinkable 10,000 BTC for a takeout – $96 million at today’s prices.
Posting online February 25, 2018, Hanyecz detailed a new takeaway transaction in which he utilized a Lightning node to call in some fast food.
Lightning Network is Working
Although not the first transaction on the network by far, Hanyecz’s immortal status in the world of cryptocurrency means that the snapshot he provided is noteworthy as indicative of Lightning’s inroads into scaling Bitcoin. At the time of its launch, the Lightning Network was tentatively hailed as a solution to Bitcoin’s scalability issues. Without vastly improved transaction speed and overall ease of use, it had become clear that digital currency would remain mired in tokenist value, even if that value was substantial as an asset in trade.
Wholesale, real-world application as a currency was still a dream, at least when compared to Visa and other facilities capable of conducting thousands of transactions per second. Hanyecz’s recent mealtime transaction does depict that Lightning is indeed a solution, is fast and is user-friendly.
Saying “I wanted two pizzas and to try to do it as close to atomically as possible,” the famous Hungarian leaned on a friend’s node to enable the transaction. In a rather convoluted roundabout, Hanyecz realized that no pizzeria close to him was accepting bitcoin. Undeterred, he buzzed his friend in London who contacted a locally enabled vendor – who then subcontracted the order to a Hungarian outlet close to Hanyecz.
In spite of the seemingly tortuous route to a meal, it was fast and pain-free, according to Hanyecz. Saying “we improvised” and trading on the trust of his friend, all he had to do was present the delivery driver with a preimage of proof of payment, and dinner was served. In short, Hanyecz paid his friend, who paid the local vendor via the Lightning Network, who transferred the credit to a Hungarian outlet, who delivered the pizzas and accepted the preimage as good for payment having been made.
While still not seamless and dependent on widespread vendor acceptance globally, of both cryptocurrency and supporting services, the Lightning Network has scored unexpected kudos from a humble celebrity in the blockchain world. In its infancy, Lightning Network was recognized as a solution to scalability issues and even had competition that copied its construct while seeking to improve on it.
A Step Away from the Dream of Instant, Digital Payments
Future transactions on the network, as Hanyecz pointed out, would be vastly more enabled if, in this example, the pizza restaurant “[accepted] the payment directly with their own lightning node.”
Although perhaps appearing cumbersome, the reality demonstrated with this transaction is that the capability exists within the Lightning Network to approach consumer enjoyment of current payment methodologies in the near future – but with cryptocurrencies.
The transactional abilities of both bitcoin and the Lightning Network are inadvertently demonstrated in Hanyecz’s post as he detailed minutiae of the transaction:
“In short, I paid bitcoin using the lightning network. I was given a bolt11 invoice which I decoded with the c-lightning cli to verify everything was as agreed… So is there any point to doing this instead of an on chain transaction? For what I described here, probably not. The goal was just to play around with c-lightning and do something more than shuffling a few satoshi back and forth.”
Laszlo, and his second round of ‘BTC Pizzas.’
Although it involved an intermediary, the transaction is seen as indicative of the speed and ease of use cryptocurrency holders can expect, if vendors would climb on board. This, too, is only a matter of time if public sentiment for virtual currencies continues to rise. Indeed, any business wanting to optimize income will surely gear themselves heavily toward digital payments.