The most epochal financial transaction of this century, to date, was a purchase of two Papa John’s pizzas, in exchange for a payment whose present value currently exceeds US $4 million.
The most remarkable thing about this transaction, which occurred on May 22, 2010, was the decision by the provider of the pizza, 18-year-old Jeremy Sturdivant, that the compensation he received—10,000 units of a newly birthed currency, one called into being from the ether of the Internet, and backed by no bank or nation—was worth real bread and cheese. Those pepperoni pizzas were the first real-world bitcoin transaction.
It has become de rigueur over the last year to speak approvingly of blockchains, the technology on which Bitcoin is built, and dismissively of Bitcoin itself. The Financial Times writes breathlessly about banks “racing to harness the power of the blockchain.” Forbes enthuses: “everyone seems to agree that the technology will disrupt financial services.” But Bitcoin itself? It’s the weird sister, the ugly stepchild, the player to be named later. One gets the distinct sense that everyone would feel better if it would just go away.
To software engineers like me, this all seems very strange and surreal. A blockchain is just a data structure. A fascinating and powerful one, granted, but not revolutionary in and of itself.
Allow me to suggest a heretical thought, a violation of the new conventional wisdom. What if Bitcoin is more important than the blockchain? What if decentralized, permissionless Bitcoin is to financial-services blockchains almost exactly what the Internet was to corporate intranets twenty years ago?