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Two Pizzas for 10, BTC. That was seven years ago today on 22 May For his part, the counterpart to this transaction Jeremy Sturdivant "Jercos" , didn't become a millionaire. In an interview he gave , he sounds more intelligent that his nom de guerre may suggest. What he is basically saying is that bitcoin without a nexus to real world spending has no inherent value. It turns out, bitcoin satisfies every condition of the theorem.

According to this thinking, it was people like Jeremy and Laszlo that gave this theoretical currency the first frame of reference. In fact, one of the quirkier indexes around is the Pizza Index which links Bitcoin value to its purchase value in Pizzas.

Continuing this approach is Coinmap below , a directory of bricks and mortar shops where you can exchange bitcoin for "real goods. This whole story raises questions about value. Why was Jeremy willing to sell real goods for 10, digital tokens? How did those coins derive their value? How can the value of this same coin be worth 1,,x seven years later? Jeffrey Tucker from FEE writes a great article on the subject, which is worth reading in its entirety. I will cut to the chase and reveal it: Bitcoin is both a payment system and a money.

The payment system is the source of value, while the accounting unit merely expresses that value in terms of price. The unity of money and payment is its most unusual feature, and the one that most commentators have had trouble wrapping their heads around.

We are all used to thinking of currency as separate from payment systems. This thinking is a reflection of the technological limitations of history. There is the dollar and there are credit cards. There is the euro and there is PayPal. There is the yen and there are wire services. In each case, money transfer relies on third-party service providers. In order to use them, you need to establish what is called a "trust relationship" with them, which is to say that the institution arranging the deal has to believe that you are going to pay.

In short, he proposes a counter arguement that in fact bitcoin derives its inherent value by what its blockchain infrastructure offers over and above its potential value in goods and services. But before you question the value of Bitcoin, ask yourself what gives value to the dollar, a currency no longer linked to gold or commodities, that is capable of inflation with no limit Bitcoin, in contrast is capped at 21 Million.

In terms of its purchase value, only 8.