It was May 22, 2010, when Laszlo Hanyecz made Bitcoin history by using 10,000 BTC or order two pizzas. This became to be known as the first documented real-world cryptocurrency transaction, where digital currency was used to purchase physical goods. This day is remembered in the Bitcoin community as the “Bitcoin Pizza Day” as well as the “Bitcoin Pizza Index.” The later calculates the present value of coins used in that historic transaction, which currently sums up to about $96 million.
Anyhow, Hanyecz again thought about creating more Bitcoin-related purchases on Feb 25th as he used the nascent Lightning Network mainnet to make a similar purchase of two Pizzas. He wanted to showcase how real-world transactions can take place through digital currencies and portrayed one way of going about it. However, this time the transaction was for .00649 BTC – roughly $63.
“In short, I paid bitcoin using the lightning network, and he arranged for a pizza to be delivered to me. In this trade, my friend is just a middle man that is taking the risk on accepting lightning payments, but it 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,” Hanyecz stated.
So does Hanyecz cryptocurrency transaction system works? Well at first the two parties, the buyer, and the seller opened a payment channel, the buyer funded the channel to prove he had the BTC. Next thing, the delivery guy came with the Pizza. The buyer shows him a part of the payment has preimage. If a match with the hash preimage showed to him by the seller, the drops off the pizza, as that proves the buyer paid the invoice.
This simple little experiment showcases how much trustless such transactions can become. Even though this doesn’t threaten the established financial and economic stability of money, the potential of BTC is still intriguing.