Bitcoin’s first price wasn’t determined by market trading. Instead, someone took an electricity bill and calculated its value in dollars.
On October 5, 2009, an early Bitcoin participant using the pseudonym NewLibertyStandard published the earliest known U.S. dollar exchange rate for Bitcoin:
1 USD = 1,309.03 BTC.
At the time, Bitcoin did not yet have a mature trading market, let alone the order books and market bidding we see today.
NewLibertyStandard’s pricing method was quite unusual: it calculated Bitcoin’s production cost based on the electricity consumed by a high-powered computer while mining, the cost of electricity, and the number of bitcoins mined over the previous 30 days, then used that to determine the exchange rate.
In other words, Bitcoin’s earliest dollar price was calculated based on electricity costs.
Seven days later, on October 12, 2009, early Finnish developer Martti Malmi sold 5,050 BTC to NewLibertyStandard and received $5.02 via PayPal.
This transaction is widely regarded as the first recorded exchange of BTC for fiat currency in Bitcoin history.
Based on the transaction amount, each bitcoin was worth less than $0.001 at the time.
However, NewLibertyStandard’s mark on history didn’t end there.
On February 5, 2010, he also proposed on the BitcoinTalk forum that Bitcoin adopt the Thai baht symbol “฿” as its symbol and use the three-letter code “BTC.”
Today, BTC has become one of the most familiar codes in the global crypto market, while the standalone Bitcoin symbol “₿” wasn’t officially added to the Unicode Standard until 2017.
From the electricity costs of mining on a single computer to price discovery in global trading markets, Bitcoin has come a long way—farther than anyone could have imagined.
Back then, $1 could buy 1,309 BTC. Looking back now, that figure alone is legendary.
Sources: Archived early exchange-rate pages from NewLibertyStandard, relevant historical records from BitcoinTalk, and Martti Malmi’s confirmation of the historical transaction.
For industry knowledge sharing only; this does not constitute investment advice.