Do you know a first Bitcoin exchange? What is it, How it looks like?

[tranthidung]

Nowadays, as of writing, in December of 2023, there are many cryptocurrency exchanges from centralized (CEX) to decentralized (DEX), where you can exchange Bitcoin to fiat currencies, stable coins, altcoins and even physical items. They are abundant nowadays but in the past, having an exchange to trade bitcoin is a dream.

Let's see what is a first Bitcoin exchange, how it looks like.

The first Bitcoin exchange in history is New Liberty Standard.

• The exchange owner has an account on Bitcointalk.
• NewLibertyStandard with an user ID is 26. It means the person is one of very first members of this forum.

How it looks like?
See three archives

• https://web.archive.org/web/20091229132559/http://newlibertystandard.wetpaint.com/
• https://web.archive.org/web/20100301174241/http://newlibertystandard.wetpaint.com/page/Exchange+Rate
• https://web.archive.org/web/20100428024753/http://newlibertystandard.wetpaint.com/page/2009+Exchange+Rate

How was the exchange rate calculated?

Exchange Rate

We Sell 1,578.76 Bitcoins for $1.00 USD Plus PayPal Transaction Fee.
We Buy1,578.78 Bitcoins for $1.00 USD Minus PayPal Transaction Fee.
$100.00 USD Available
15,100.00 Bitcoins Available
PayPal Transaction Fee Calculator
12/28/2009

To buy or sell bitcoins, please send an email to newlibertystandard@gmail.com stating how many bitcoins you would like to buy or sell. Currently only PayPal is accepted for payment. The rate changes at midnight Greenwich Mean Time regardless of whether the new rate has been posted. The time at which the financial transaction begins determines the rate for the transaction.

Our exchange rate is calculated 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 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.

I ordered a single outlet electrical meter and will probably change my exchange rate to the average production cost over one year. I am going to try to implement this starting January 1st.

The exchange owner has some interesting posts which I quoted below.

1. Because some people are not satisfied with the status quo.
Some people don't like that fiat currencies allow money to be created out of thin air. Using a commodity based currency like bitcoins shrinks the fiat economy and increases the commodity based economy. There's a growing movement in a the United States centered around ending the Federal Reserve and returning to a commodity based currency.

Some people don't like that all electronic financial transactions have to go through and be approved by a large financial institution. Bitcoin transactions don't go through any financial institution, so there's never a fee and transactions can't be declined.

Some people don't like that the government can subpoena your complete financial history and companies can review your credit history without your permission. Bitcoins are like cash in that transactions can be made anonymously and thus can't be subpoenaed by the government or reviewed by companies.

Some people like to earn a little cash on the side with virtually no work required. It's as easy as clicking 'Generate Coins' and opening a PayPal account.

Some people believe bitcoins are a good investment. There are more than a few people interested in using bitcoins and that's all that is needed to guarantee that they will increase in value over time.

Some people use bitcoins because they think that they are an interesting experiment and want to see how and by whom bitcoins will be adopted.

I have had people buy bitcoins from me and sell bitcoins to me. Supply and demand, albeit only a small amount, already exists and is all that is really needed. Offering to exchange bitcoins for another currency is ultimately no different from exchanging bitcoins for goods or services. Currencies are goods and exchanging them is a service. I have been trying to think of something besides USD dollars which I can try to buy or sell using bitcoins, but I can't think of anything. Please let us know about whatever you decide to sell for bitcoins. As for the issue of burning through funds, I have written a daily donation into my budget. You can buy all my USD dollars or bitcoins today, but there will always be more tomorrow and the next day. Each person who buys or sells goods using bitcoins, including exchangers, is increasing the bitcoin economy. Everyone, do your part. Buy or sell something in exchange for bitcoins!

What would you buy or sell in exchange for bitcoins?

Here's what I will buy if the price is right.

Paper bowls, about 10 ounces (295 ml), no more than 50 count factory sealed.
Plastic cups, about 16 ounces (473 ml), no more than 50 count, factory sealed.
Paper towels, preferably regular size Bounty Thick and Absorbent, single roll, factory sealed.

I am just seeking your opinion on some thoughts I had recently. NLS states that he/she calculates how much energy is spent for daily BC production. If more and more BC users are involved in generation, the number of BC NLS produces will go down, for the same amount of energy spent. Hence, the price is bound to go up.

Yes, that's correct. I expect the value of bitcoins to increase as the user base increases and decrease if the user base decreases. I do measure my electricity usage, but it's fairly constant.

I mean, NLS methodology is wrong  

Could you be more specific about what exactly is wrong?

My exchange rate is now influenced by supply and demand in addition to production costs. Bitcoin value will rise and fall in relation to their availability.

Note

• When I have time, I will add some more information which I got from this article Dawn of Bitcoin price discovery 2009 – 2011: The very early Bitcoin exchanges.

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[Faisal2202]

This was an interesting topic, I just replied to another topic of yours OP and it seems like you must have been doing some research, and on the way whatever new you found you made a new topic of because in half an hour you created almost 3 topics. Well, that's not a matter let's jump to my reply.

This topic was really helpful, I did not know about the first exchange, and I always thought, the price of BTC was solely influenced by demand and supply but on the very first exchange, it was influenced by the cost of electricity. I read the method of liberty exchange of how they calculate the prices of BTC and how they shifted to the factor of demand and supply after some time, and till now the main factor to drive the price of BTC is demand and supply.

Well, I think this is the main origin of the Demand and supply factor, or there was any other too?

[glendall]

very useful information for me because I myself don't know the first exchange for bitcoin,
By looking at the initial list price, it is very cheap. People who join first are very lucky, how much wealth would they have now if they bought $1,000 at that time.

[tranthidung]

Well, I think this is the main origin of the Demand and supply factor, or there was any other too?

I am not sure about this. Back in the days, supply is huge and demand is small. That explains why in early days, we had some deals to exchanges bitcoins for pizza, honey pot, etc.

very useful information for me because I myself don't know the first exchange for bitcoin

You will surprise if you know about A website with a most comprehensive all-time Bitcoin price history chart.
The website https://bitcoin.zorinaq.com/price/ has information about New Liberty Standard exchange. Some times people think that Bitcoin Markets (also mentioned at the site), is a first Bitcoin exchange. In fact, it is not!

By looking at the initial list price, it is very cheap. People who join first are very lucky, how much wealth would they have now if they bought $1,000 at that time.

You can see the owner of New Liberty Standard exchange had different offers to buy bitcoins too. Offers like Paper bowls, plastic cups, paper towels for bitcoins.

What would you buy or sell in exchange for bitcoins?

Here's what I will buy if the price is right.

Paper bowls, about 10 ounces (295 ml), no more than 50 count factory sealed.
Plastic cups, about 16 ounces (473 ml), no more than 50 count, factory sealed.
Paper towels, preferably regular size Bounty Thick and Absorbent, single roll, factory sealed.

[Darker45]

Around a couple of months ago, user TravelMug also opened a thread about exactly this same exchange, The New Liberty Standard (NLS). It was posted on the supposed birthday of NLS, October 5.

Anyway, I'm sure we aren't running out of topic to discuss and, based on the first replies, there are still users who have not yet heard of the first Bitcoin exchange until now. It's great that they now learn a piece of Bitcoin's history.

Although NLS is the first Bitcoin exchange, it isn't the first Bitcoin to fiat exchange. Exchange in the former as in platform and exchange in the latter as in conversion. I think it was the old head administrator here, the one who took over the role from Satoshi, Sirius, who first made a Bitcoin-fiat exchange. And that was through Paypal.

[tranthidung]

It's great that they now learn a piece of Bitcoin's history.

This is my intention.

Although NLS is the first Bitcoin exchange, it isn't the first Bitcoin to fiat exchange. Exchange in the former as in platform and exchange in the latter as in conversion. I think it was the old head administrator here, the one who took over the role from Satoshi, Sirius, who first made a Bitcoin-fiat exchange. And that was through Paypal.

Massive information!

I did not know about that but with your help, I learn a new thing today.

This is the exchange built by sirius.

• http://www.bitcoinexchange.com/
• Bitcoin exchange (announcement)
• Based on the announcement date, this exchange was launched about 1 year after New Liberty Standard exchange

The earliest snapshot with Wayback Machine: https://web.archive.org/web/20110207152325/https://www.bitcoinexchange.com/ but it does not show anything about the exchange interface. You will see this message

The service is discontinued for the time being. Please visit MtGox or Btcex.com for currency exchange.

Anyone has a screenshot for the exchange?

Dawn of Bitcoin price discovery 2009 – 2011: The very early Bitcoin exchanges.

Bitcoinexchange.com even is not mentioned in that article while others like New Liberty Standard, Bitcoinmarket.com, Mt. Gox was mentioned. An important piece of Bitcoin history is missing, why?  

sirius tweeted and you can see it in the article too. I only wonder why sirius's exchange was not counted as one of first Bitcoin exchanges.

Then I ran http://bitcoinexchange.com for a while in 2010. At the time, there was no established exchange rate, and I operated it more like a bitcoin faucet than a business, ending up with 30,000 BTC less.

This is a first trade, from sirius to New Liberty Standard.
https://www.blockchain.com/explorer/transactions/btc/7dff938918f07619abd38e4510890396b1cef4fbeca154fb7aafba8843295ea2

This is the first known sale of bitcoin to USD. Martti 'Sirius' Malmi, the second ever bitcoin developer (after Satoshi) sold 5050 bitcoin for $5.02.

[Darker45]

~snip~

Dawn of Bitcoin price discovery 2009 – 2011: The very early Bitcoin exchanges.

Bitcoinexchange.com even is not mentioned in that article while others like New Liberty Standard, Bitcoinmarket.com, Mt. Gox was mentioned. An important piece of Bitcoin history is missing, why?  

~snip~

Actually, the author mentioned it, albeit merely in passing. It was mentioned under the New Liberty Standard (NLS) heading. I don't know, perhaps there isn't much to talk about Sirius' Bitcoin exchange because there aren't much details available. There isn't even a screenshot of that site.

I'm not sure how long Bitcoinexchange operated, but I guess it wasn't long enough. Even in its ANN thread here, there wasn't much discussion. As a matter of fact, the feedbacking died in that very month the announcement was made. So perhaps it was only running for a very short time, did not really attract decent volume or activity or even sign-ups, and closed down for good. This was probably the reason why this exchange wasn't included by the author. But it should have been listed, just the same.

[yhiaali3]

Thank you for this interesting topic about an important part of the history of Bitcoin. I was frankly not aware of this information. The first Bitcoin exchange is a very important part of Bitcoin history and it is very important that this interesting information is documented.

In my opinion, these old things that belong to the early days of Bitcoin’s life should be turned into NFT Ordinals. These first things have become like heritage for Bitcoin and someone should preserve them by documenting them in the form of an NFT. I think it would be a great idea.

[TravelMug]

Around a couple of months ago, user TravelMug also opened a thread about exactly this same exchange, The New Liberty Standard (NLS). It was posted on the supposed birthday of NLS, October 5.

Anyway, I'm sure we aren't running out of topic to discuss and, based on the first replies, there are still users who have not yet heard of the first Bitcoin exchange until now. It's great that they now learn a piece of Bitcoin's history.

Although NLS is the first Bitcoin exchange, it isn't the first Bitcoin to fiat exchange. Exchange in the former as in platform and exchange in the latter as in conversion. I think it was the old head administrator here, the one who took over the role from Satoshi, Sirius, who first made a Bitcoin-fiat exchange. And that was through Paypal.

Thanks for the mentioned mate, yes, that was my intention when I created that topic before and also the timing. And it's really part of our history that's why I created that thread and it's really good to go back to it's early roots and see how everything looks in the beginning.

[wallet4bitcoin]

Awesome update!

I see the amount of Bitcoins exchanged for a few dollars. If only one had any idea of what it was and where to get it.

I mean, who can't afford to invest a dollar in to his future when given a peep into it. I also think this exchange owner should be a millionaire by now, whether or not he still runs that exchange. There ought to be a few stacks of Bitcoin somewhere left for tomorrow if he truly was a believer.

[adaseb]

How did that exchange close? I remember there was a very early bitcoin exchange, forgot the name, it got somewhat popular and had a decent amount of members. Then…

The webmasters hard drive crashed and they lost everyone’s bitcoins. Eventually I remember that I think MtGox bought them out and maybe gave them their bitcoins back. It was so long ago I can’t remember it properly, maybe someone else can however.

[TravelMug]

The webmasters hard drive crashed and they lost everyone’s bitcoins. Eventually I remember that I think MtGox bought them out and maybe gave them their bitcoins back. It was so long ago I can’t remember it properly, maybe someone else can however.

I'm not sure if you are referring to this one: New exchange (Bitcoin Market). And it's one of the most historical thread as well as it shows the early history.

And I found snapshot of the website here: https://web.archive.org/web/20110910173612/https://www.bitcoinmarket.com/

[Tyke]

I'm writing a book including information about New Liberty Standard and Bitcoin Market:

https://bitcointalk.org/index.php?topic=5475400.0

[m2017]

Nowadays, as of writing, in December of 2023, there are many cryptocurrency exchanges from centralized (CEX) to decentralized (DEX), where you can exchange Bitcoin to fiat currencies, stable coins, altcoins and even physical items. They are abundant nowadays but in the past, having an exchange to trade bitcoin is a dream.

Was it a dream to have an exchange? For my dream, it would be enough to just be in the past and be able to buy some bitcoins for a couple of bucks (judging by the prices in the screenshot, this would turn out to be one hell of a deal) in New Liberty Standard that first store.