12 years today since the first known price was set for BTC

[DdmrDdmr]

I wasn’t aware of the story, and found it an interesting read on how the first BTC price was set on an Exchange (arguably primitive, placing petitions by email and such):

(Checkout how BTC price rose in just a couple of days)

The New Liberty Standard is considered by some as the first Exchange, and as such, on 05/10/2009, it had to set it’s first BTC price in USD (payments were initially made through PayPal). The price was set, based upon the following formula:

By "dividing $1.00 by the average amount of electricity required to run a computer with high CPU for a year, 1331.5 kWh, multiplied by the average residential cost of electricity in the United States for the previous year, $0.1136, divided by 12 months divided, by the number of bitcoins generated by my computer(*) over the past 30 days".

(*) The person behind New Liberty Standard I presume.

It’s interesting to see how the price changed pretty wildly over the first few days (you can see a longer price table and a bunch of interesting stuff by navigating through the archived site, whose link I provided further below).
As said, offer and demand did not set the price back then (initially), but rather the above formula that ensured covering costs. The variation in price from one day to another is, I figure, due to the change in the "bitcoins generated by my computer(*) over the past 30 days" part, which will change as the 30 day window slides forward another day. Later on, price calculus was modified to include moving averages and the cost of data bandwidth.

Dates to consider:
03/01/2009: First bitcoin block is mined.
12/01/2009: First BTC TX (Satoshi -> Hal : 10 BTCs).
05/10/2009: First known price for BTC is set (as per the referenced links down below).
12/10/2009: First TX on New Liberty Standard -> Sirius (Martti Malmi) sold 5050 BTCs to New Liberty Standard for 5,02$ (Paypal).
05/02/2010: New Liberty Standard proposes using ฿ as BTC’s currency symbol Bitcoin Currency Symbol ฿.
18/05/2010: @laszlo offers 10K BTCs for 2 pizzas (consiered the first comercial TX).
22/05/2010: @laszlo confirms the TX having taken place.

See:
NewLibertyStandard (perfil Bitcointalk)
https://web.archive.org/web/20091229132610/http://newlibertystandard.wetpaint.com/page/Exchange+Rate
https://www.sgtreport.com/2021/01/dawn-of-bitcoin-price-discovery-2009-2011-the-very-early-bitcoin-exchanges/
https://www.bullionstar.com/blogs/ronan-manly/dawn-of-bitcoin-price-discovery-2009-2011-the-very-early-bitcoin-exchanges/

Note: My dates are written as dd/mm/yyyy

[Upgrade00]

How times have changed, majority of people at the time had little idea at the time that this technology was going to have such a huge impact.

That was quite an interesting way to determine the price of Bitcoin, and how different the market would be if it was used today. I assume it would be quite difficult to do now as Bitcoin is now worldwide and determine a cost of electricity is not feasible, so there cannot be a definite value.

The variation in price from one day to another is, I figure, due to the change in the "bitcoins generated by my computer(*) over the past 30 days" part, which will change as the 30 day window slides forward another day. Later on, price calculus was modified to include moving averages and the cost of data bandwidth.

Would the my be the computer of there person behind the price speculation?

[Dhoe]

Bitcoin when it was first launched in 2009, the profits we can earn today can reach millions or billions of dollars, because the initial value of the asset was still US $ 0. This is definitely the best performing asset in the last decade, but unfortunately I'm just learning about bitcoin at the beginning of 2019, even so I have never regretted it, because bitcoin has helped my finances a lot. especially when the pandemic hit my country..

[Ararbermas]

It's very interesting to see that bitcoin nowadays changed a lot,  if we hold our very first bitcoin in the space since 2009 perhaps it's million now or billion. Lol but unfortunately many people that time were very scared in such creation and also because of some negative feedbacks around the internet,  but yes it's not too late and for sure after 10 years there will be a good improvement again because a lot of people already knows how good these crypto world..so its not surprising anymore if someday we will see a new record especially from bitcoin..

[dupee419]

Reading this, I really can't imagine that it would take thousands of bitcoins just to actually accumulate it into a dollar 12 years ago, 12 years later, 1 BTC is equals to $50k, the amount of profit someone will actually get if they invested in BTC 12 years ago.  15,100 bitcoins were only available back then to be bought and sold only for a dollar, if I only knew about crypto and Bitcoin back then, I would have invested in a lot knowing thousands of Bitcoin costed for only a dollar.

[Lucius]

From today's perspective, the start of trading really seems almost unreal, not only because you could buy a huge amount of BTC for $1, but also because of the way the price was determined. But it was something completely different, because everyone could use their personal computer to mine BTC, and we must not forget that the reward per block was as much as 50 BTC, which was 7200 BTC per day, while today that number is only 900 BTC.


@DdmrDdmr, by the dates you set, Laszlo bought 2 pizzas for 10 000 BTC before the first sale took place on First TX on New Liberty Standard, but this is wrong, according to what can be seen on Martti Malmi Twitter, the transaction happened 1 year earlier (2009-10-12).

[mk4]

Reading this, I really can't imagine that it would take thousands of bitcoins just to actually accumulate it into a dollar 12 years ago, 12 years later, 1 BTC is equals to $50k, the amount of profit someone will actually get if they invested in BTC 12 years ago.  15,100 bitcoins were only available back then to be bought and sold only for a dollar, if I only knew about crypto and Bitcoin back then, I would have invested in a lot knowing thousands of Bitcoin costed for only a dollar.

Let's be totally honest here.. no you wouldn't lol. Bitcoin is just an obvious investment right now just because it already rose in price innumerable times. People love to say "if only I knew about bitcoin early on.. etc etc" but in fact, 99% of us would just have ignored Bitcoin.

[Yamifoud]

It is always been good to see and remember the history of Bitcoin even we once ignore it before until we found out that this was a good and profitable investment. We can really think and say, why?
If Bitcoin prices don't move so fast like that, it is for sure only a few people will give interest in this thing. Yeah, only a few people but as it rose up, millions got crazy to come and share chunks of Bitcoin, buying at $40k, $50k...

[DdmrDdmr]

<…> Would the my be the computer of there person behind the price speculation?

Yep (price setting). The "my" refers to the person behind the New Liberty Standard site, who took his own mining metrics as a basis to calculate the initial BTC price.

Bitcoin when it was first launched in 2009, the profits we can earn today can reach millions or billions of dollars, because the initial value of the asset was still US $ 0. <…>

Fun fact, there was some very early conceptual speculation on price, even back then:

High price per bitcoin was even speculated, or at least tossed around as a potential, back in 2009.
 
After Satoshi announced the release of Bitcoin v0.1, Hal Finney replied, citing amongst other things the following:

<…>
One immediate problem with any new currency is how to value it. Even
ignoring the practical problem that virtually no one will accept it
at first, there is still a difficulty in coming up with a reasonable
argument in favor of a particular non-zero value for the coins.

As an amusing thought experiment, imagine that Bitcoin is successful and
becomes the dominant payment system in use throughout the world.  Then the
total value of the currency should be equal to the total value of all
the wealth in the world. Current estimates of total worldwide household
wealth that I have found range from $100 trillion to $300 trillion. With
20 million coins, that gives each coin a value of about $10 million.

So the possibility of generating coins today with a few cents of compute
time may be quite a good bet, with a payoff of something like 100 million
to 1! Even if the odds of Bitcoin succeeding to this degree are slim,
are they really 100 million to one against? Something to think about...

Hal
 

https://www.metzdowd.com/pipermail/cryptography/2009-January/015004.html

Seems to have been on the mind of core people around the beginning, although through Hal’s words.

Note: Hal performed his exercise considering a 20M bitcoin supply. Whether that was a simplification, an oversight (strange, as 21M was mentioned by Satoshi on the post Hal answered to), or due to inner knowledge on 1M bitcoins never being movable (i.e. lost or thrown away keys) is a wonder …

On after thought, the use of 20M and not 21M BTCs in Hal's quoted text, could have simply been a simplification for the calculus.

<…>

Cheers for pointing that out.

[mk4]

It is always been good to see and remember the history of Bitcoin even we once ignore it before until we found out that this was a good and profitable investment. We can really think and say, why?
If Bitcoin prices don't move so fast like that, it is for sure only a few people will give interest in this thing. Yeah, only a few people but as it rose up, millions got crazy to come and share chunks of Bitcoin, buying at $40k, $50k...

That's the great thing about it— the price increase is free marketing. Because of price increases, moonboys who want to get rich quick join in; and while a lot of them exit when prices stop rising, a minority of that group digs deeper and learn about bitcoin and it's other great characteristics outside of "number go up".

[tranthidung]

That's the great thing about it— the price increase is free marketing. Because of price increases, moonboys who want to get rich quick join in; and while a lot of them exit when prices stop rising, a minority of that group digs deeper and learn about bitcoin and it's other great characteristics outside of "number go up".

It is how the market works and how the 4 year cycle of the market works.

The total supply of Bitcoin is well known as well as the halving every four years. The amazing thing is each four year, Bitcoin is mentioned more on the social media and mainstream media. They contribute to the growth of Bitcoin exposure to the community and the awareness of the community about Bitcoin.

In addition, four years are long enough to do a full cycle of the market, bull to bear, positive to negative and help whales to accumulate cheap Bitcoin at bottom. Price will begin a new bull cycle when retail investors give up and feel no hope in the market. It is when whales will trigger the new bull market, in surprise, disbelief and uncertainty of retail investors.

[Artemis3]

Reading this, I really can't imagine that it would take thousands of bitcoins just to actually accumulate it into a dollar 12 years ago, 12 years later, 1 BTC is equals to $50k, the amount of profit someone will actually get if they invested in BTC 12 years ago.  15,100 bitcoins were only available back then to be bought and sold only for a dollar, if I only knew about crypto and Bitcoin back then, I would have invested in a lot knowing thousands of Bitcoin costed for only a dollar.

Let's be totally honest here.. no you wouldn't lol. Bitcoin is just an obvious investment right now just because it already rose in price innumerable times. People love to say "if only I knew about bitcoin early on.. etc etc" but in fact, 99% of us would just have ignored Bitcoin.

And there was people in /. claiming it was another scam or vapor, i remember well... I didn't look at it because the early wallets were for windows, and i hate windows, so i missed the switch to qt, etc. It doesn't matter anymore, lost opportunities are lost forever.

[KingsDen]

By "dividing $1.00 by the average amount of electricity required to run a computer with high CPU for a year, 1331.5 kWh, multiplied by the average residential cost of electricity in the United States for the previous year, $0.1136, divided by 12 months divided, by the number of bitcoins generated by my computer(*) over the past 30 days".

It is interesting to know how the price of Bitcoin was fixed at its early stage. It is evident that the amount of electricity consumption has been in consideration from day one. Even till date, the energy consumption of bitcoin is still in high consideration. However, other factors that determines price are in place such as; speculations, miners activities, trading activities etc. But, it will be interesting to understand that the initial formula of determining bitcoin price is still in existence. Maybe the mathematics is now complicated, but am not sure that it's totally abandoned.

[masulum]

And there was people in /. claiming it was another scam or vapor, i remember well... I didn't look at it because the early wallets were for windows, and i hate windows, so i missed the switch to qt, etc. It doesn't matter anymore, lost opportunities are lost forever.

At the beginning of Bitcoin's presence, many people would think that BTC had the potential to be a scam, Because this is a new thing in the world of finance. Actually, missing that moment doesn't mean we've run out of space. There are many places in crypto. If we think we missed the opportunity when BTC was still cheap, at least we can still have it now. What the future price of BTC will be, we will never know, but as long as investors and the community are support, BTC will survive.

[so98nn]

Oh man did anyone notice that first BTC payment was actually made on PayPal ??
That’s crazy and I am literally startled with this article. I am not sure why PayPal did not take the chances of officially accepting the BTC payment right after they made the first transaction ? Why Elon was not aware about this before; it’s really thinkable I guess?

And yes, the price rose pretty smart way considering the mining was so easy and transaction were cheapest one. I can imagine now how peeps at the time would have seen their project grow like this! The purest transactions of the time. May be experimental too?

[hatshepsut93]

Reading this, I really can't imagine that it would take thousands of bitcoins just to actually accumulate it into a dollar 12 years ago, 12 years later, 1 BTC is equals to $50k, the amount of profit someone will actually get if they invested in BTC 12 years ago.  15,100 bitcoins were only available back then to be bought and sold only for a dollar, if I only knew about crypto and Bitcoin back then, I would have invested in a lot knowing thousands of Bitcoin costed for only a dollar.

I knew about Bitcoin in early 2012 when the price was $5 or so. I looked at it, thought "ok, some new form of electronic money, whatever" and forgot about it. Even claimed 0.005 BTC from a faucet.

When Bitcoin was in early days, it was much harder to be a hodler, because of the fear that every crash can be the death of Bitcoin. And the market was way more volatile, you could have invested $1,000 and see it be valued $500 in a few hours.

[Upgrade00]

I am not sure why PayPal did not take the chances of officially accepting the BTC payment right after they made the first transaction ? Why Elon was not aware about this before; it’s really thinkable I guess?

The answer I can think of is that there wasn't enough hype around it at the time. No one (or almost no one) expected a technology made by an anonymous entity to become as popular and valuable as it is now. Many board members and share holders would have seen adopting Bitcoin as a very bad financial decision.

The early adopter stage is usually the thinnest and consists of people who are not necessarily interested for financial gains or obvious potential, but the possibilities that exists.

[taufik123]

the beginning of the emergence of BTC in 2009 which is certainly a history that will never be forgotten. $1 is equivalent to 1,309 BTC and it would have been great to buy that year and hold it until now. Even in that year, I was not familiar with crypto and digital payment technology. I know paypal and have never tried it.
BTC has become a very extraordinary digital asset with an increase that I think is extraordinary that other digital assets do not have.
this is all because of the strength of the Bitcoin community that continues to grow today. Bitcoin is a trusted asset that is able to destabilize the world economic market.

[Fatunad]

Reading this, I really can't imagine that it would take thousands of bitcoins just to actually accumulate it into a dollar 12 years ago, 12 years later, 1 BTC is equals to $50k, the amount of profit someone will actually get if they invested in BTC 12 years ago.  15,100 bitcoins were only available back then to be bought and sold only for a dollar, if I only knew about crypto and Bitcoin back then, I would have invested in a lot knowing thousands of Bitcoin costed for only a dollar.

Let's be totally honest here.. no you wouldn't lol. Bitcoin is just an obvious investment right now just because it already rose in price innumerable times. People love to say "if only I knew about bitcoin early on.. etc etc" but in fact, 99% of us would just have ignored Bitcoin.

Regrets do always come on the last because nothing is certain when it comes to future.Wayback when im still on college i do hear out about bitcoin on early 2010's but had that impression that it might be
some another online ponzi scheme or things like attached on being scam and jumping to 2015-2017 then i did really bang up my head into the wall because i hadnt expected for bitcoin to go this high.
Those what if's kind of things do go in into my mind and imagining that i could be super duper rich if i had able to accumulate in.

[Cafex]

Time flies! It has really been twelve years since Bitcoin was first released in the cryptocurrency market. From that day to now, Bitcoin price has increased at an incredible rate. Just think about the possibility that there are still some people who have been HODLing Bitcoin from its first times to this day. The current price would just blow their mind considering their insane profit. But I guess that there is nobody but Satoshi who have been HODLing for that long time.