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I tried to google "Who decided the first price of bitcoin", "How was decided the first price of bitcoin" but the only answer I get is almost the same everytime: "In July 2010, bitcoin began trading at a value of US$0.0008". Now my question is: why? why that number? who decided it? who was the first person to say "I am willing to give you 0.0008$ for a bitcoin of yours" and why should a person do something like that?

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  • Does bitcoin.stackexchange.com/q/3179/5406 answer your question?
    – Murch
    Mar 31, 2023 at 13:46
  • Not really, I am searching a more pragmatic answer. I understand that this system has a value because It has properties that the traditional system can't guaranted. Still I don't get why someone was willing to exchange 0.0008$ for a Bitcoin Mar 31, 2023 at 15:05

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Who decided the first price of bitcoin

The first time Bitcoin was assigned a public value was 22 May 2010 "when Laszlo Hanyecz paid 10,000 BTC to have two Papa Johns pizzas delivered to him. The pizzas retailed for about $25."

I don't get why someone was willing to exchange 0.0008$ for a Bitcoin

Why did the Pizza vendor decide that was a fair price for two pizzas? He didn't. It was an intermediary, "Since Papa John’s didn’t accept Bitcoin as payment, [Hanyecz] posted a 10,000 Bitcoin offer on Bitcointalk.org and Jeremy Sturdivant, a 19-year old then, took the offer for an estimated $41, bought the two pizzas and delivered."

So what was Sturdivant's motivation?

"Talking of the legendary pizza deal he said: “It seemed fair for both parties, low-risk, and well, who doesn't like some kind of pizza?

I didn't see Bitcoin as likely to completely collapse, though I had no idea how huge it would become," he said.

At the time of the famous pizza I would never have thought that the same number of Bitcoin would have a purchasing power on the order of real estate."

Reading between the lines, both parties seem to have regarded it as a bit of fun that was both low-risk and low-cost.

10000 BTC was 200 blocks (at 50 BTC block reward) which is 33 hours successful mining effort at a time when there were few miners and when average desktop PCs were used for mining. So I think we should be able to see why trading a few days of your desktop PC working in the background could be regarded as fair exchange for a $25 worth of Pizza.

"In July 2010, bitcoin began trading at a value of US$0.0008"

So far as I know, opening prices in markets such as currency exchanges are decided by the first two market participants who agree on a fair price. There's no reason their motivations should be much different or less whimsical than those of Hanyecz and Sturdivant.

Since this market was opened long after the first Bitcoin purchase, the market operators could easily have used known prior off-market transactions like that to assign an indicative price if any was needed.


Sources

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