What Was Bitcoin’s First Valuation?

The first recorded exchange rate for bitcoin appears to have been offered by early bitcoin broker New Liberty Standard.

The exchange rate set by New Liberty Standard was 1309.03 bitcoins per US dollar.

This exchange rate represents the first formal price offered by someone selling bitcoins directly for dollars as opposed to the exchange of bitcoins for real world goods.

This rate preceded Bitcoin Pizza Day by 229 days.

It’s worth noting that we could not find any primary source for this exchange rate being offered by New Liberty Standard.

All mentions of this exchange rate are either from reports and screenshots taken at the time or small mentions about it from forum users.

You can still view the New Liberty Standard website and it still displays old exchange rates from 2009, but none from October 5th.

New Liberty Standard Exchange Homepage.

Even old bitcoin talk forum posts only reference the exchange rate second-hand.

I even poured over every post and comment made by the New Liberty Standard account on Bitcoin Talk.

The original bitcoin talk forum post posted by New Liberty Standard appears to be gone.

However, the waybackmachine does seem to archive a copy of the original exchange rate offered on the New Liberty Standard website.

The point is: we can only assume all the reports are right and the screenshots and archives are accurate.

How Did New Liberty Standard Arrive at This Exchange Rate?

In the words of New Liberty Standard:

During 2009 my exchange rate was 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 (of 2010).

Why is the First Bitcoin Valuation / Exchange Rate Important?

When Bitcoin was first invented and run by the small group of people who ran the client, it was an experiment.

Everyone probably knew that the odds the coins would ever be worth anything were small.

Bitcoin has reached many price milestones over its 14 year lifespan:

• Hitting parity with the dollar
• Hitting parity with gold
• Making the first real world product purchase with bitcoin
• Achieving a $1 billion market cap
• Achieving status as legal tender in a major country

But none of these likely compare to the first time a value of any kind was applied to bitcoin.

Without someone being willing to trade dollars for some amount of bitcoins, none of the other milestones would have been possible.

The first valuation milestone is therefore incredibly special and important to the history of bitcoin.