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Blog posts, Thought leadership | 04/28/2020

Buying with Bitcoin has Evolved: From Pizza to Lamborghini

Bitcoin Pizza

Bitcoin has come quite a long way since its inception on the 3rd of January 2009. It’s nowadays usable for purchasing goods – and its adoption is rapidly growing. There’s many memorable moments and important additions. Let’s go over some major purchases that can be done with Bitcoin.

The World’s Most Expensive Pizza

It all started on the 22nd of May, 2010. A hungry Laszlo Hanyecz was having a craving for a Pizza and thus created a key moment in Bitcoin’s history. He bought a Pizza with Bitcoin (BTC), which marked the first-ever purchase of goods using Bitcoin. On that fateful day in 2010, Laszlo went on the Bitcointalk forum and posted this thread saying: “I’ll pay 10,000 bitcoins for a couple of pizzas.. like maybe 2 large ones so I have some left over for the next day”. 

Another user called “jercos” took him up on his offer, ordered the two pizzas and gladly accepted the 10,000 BTC. An avid fan of crypto, jercos strongly believes in the promise that Bitcoin can deliver. In an interview, he stated: “I see the role of bitcoin mostly being similar to PayPal or Stripe, providing a link between card handlers or banks, and retailers.” He had an interesting worry about buying those two pizza’s though since he’d be buying them in the US from the UK. ”The big factor in my mind at the time was a worry that Laszlo would have some trouble [with the delivery] that had been paid for online with an out of state card”. The Bitcoin transaction on the other hand could never have this kind of trouble, seeing as it’s completely borderless and couldn’t be censored.

The two Pizza’s Laszlo bought from Papa John’s cost roughly $40,- at the time. With the current day price of Bitcoin, those two pizzas are worth over $70,000,000, making them the most expensive pizzas ever known to mankind. There’s a dedicated Twitter account that gives price updates on this. Laszlo doesn’t regret having gotten those two pizzas though: “I think it’s great that I got to be part of the early history of Bitcoin in that way”.

And sure enough, Laszlo has made history. The first purchase in Bitcoin was made – and countless more followed after.

Turning 115 Dollars into a Lamborghini

Indeed the path beyond the Bitcoin Pizza has been a wild one. Quite a few cryptocurrencies have immensely increased in value since, with its current peak in 2017. A growing topic started becoming “Bitcoin Lambo” in the Bitcoin community – they were starting to wonder when they’d be able to buy a Lamborghini car with their Bitcoin.

And sure enough, there have been a few who have made this dream come true.

The most famous, well-documented example is that of Peter Saddington, who in the fall of 2017 bought the incredible supercar – the Lamborghini Huracan. The best part: he paid for the Lamborghini with Bitcoin that he bought back in 2011 for $115,-.

Peter’s purchase was made available by Lamborghini Newport Beach, who decided to accept Bitcoin payments for their supercars. This is done through BitPay, which means Peter was able to pay in Bitcoin and the Lamborghini retailer would receive it in dollars. Pietro Frigerio, the general manager of Lamborghini Newport Beach, stated that they don’t speculate on Bitcoin’s exchange rate, and that – as for any foreign currency – it needs to be changed into US dollars first.

Indeed, the volatility of Bitcoin and other cryptocurrencies is something that could keep merchants from accepting them. This means that a payment service provider like BitPay fits this purpose: it allows purchasers to pay in crypto and merchants receive fiat money. Accepting cryptocurrencies could also give some legal challenges for merchants. Bitcoin is not accepted as legal tender since it’s not officially recognized as money. It cannot be used for any payments to a state as such. This has, however, been changing and exceptions now exist. In 2018, the state of Ohio became the first US state to accept tax payments in Bitcoin. More regulation on crypto assets is slowly coming, which could potentially help merchants to directly accept cryptocurrencies, rather than first having to change it to fiat currencies.

Real Estate – Bought with Bitcoin

Going even further than modes of transportation, there are even houses being bought with Bitcoin. And we’re not talking about a one bedroom apartment.

From a New York condo being sold for $15.300.000 in Bitcoin to over 50 luxury flats in Dubai being sold through the flagship cryptocurrency, Bitcoin has become an acceptable means of settling large transactions. While you cannot yet buy any house or apartment you’d like through cryptocurrencies, the future sure is looking bright.

Similarly to the Lamborghini, these pieces of real estate were sold through BitPay. Barrowman, who is selling the luxury flats in Dubai and accepting Bitcoin, is quite clear on his thoughts on cryptocurrencies. “I like to see this crypto space being used to buy real-world assets”. His partner on this project, Michelle Mone, underlined how he wanted to offer this possibility to the cryptocurrency community he is a part of. 

For the New York condo, Eric Hedvat – a real estate broker who represented the firm – mentioned that concluding the deal was a “seamless process”. Sure enough, large transactions are a piece of cake for Bitcoin and other cryptocurrencies. Even sending 1 billion US dollars worth would be done in a matter of minutes, whereas traditional financial systems may take a significantly longer time. While, buying houses with Bitcoin is still a rare occurance, companies that specialize in this are emerging, such as Epoch BTC. All in all, there seems to gradually be a shift in how crypto is perceived – and sure enough, the amount of merchants and services involved in crypto is increasing.

Crypto Adoption is Growing

While still in its early stages, crypto is becoming more and more popular over the years. A study by Statista Global Consumer Survey found that an impressive 20% of Turkish citizens have owned cryptocurrencies at some point, with a few other countries equally reaching above 15%.

And this movement doesn’t stop at individuals – many companies are now accepting cryptocurrency payments as well! From tech giants like Microsoft to online travel platform Expedia, many companies have embraced Bitcoin and cryptocurrencies as legitimate payment methods. As a matter of fact, you can even travel to space with Bitcoin. The major global law firm Quinn Emanuel Urquhart & Sullivan stated the following upon its acceptance of Bitcoin: “We want to be flexible for our clients. Bitcoin is an easy and secure way to transfer funds, and we embrace it”.

This is but one example of how Bitcoin’s perception is rapidly changing. A research equally indicated that the public perception on cryptocurrencies in several countries appears to be overwhelmingly positive.

We’re constantly seeing new adopters of crypto payments joining. At Ledger, we are excited to see what the future of Bitcoin and cryptocurrencies holds.

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