Software developer Udi Wertheimer made sensational claims on Twitter this week, suggesting Bitcoin founder Satoshi Nakamoto supported the first NFT transaction on the Bitcoin blockchain – the sale of a picture worth 500 BTC.

His comments come as Casey Rodarmor’s Ordinals, a kind of NFT minted on Bitcoin, has caused significant congestion on the network due to high demand for storage space. This has led to a corresponding 3,000% increase in bitcoin transaction fees since January.

“We discovered that the first purchase ever with bitcoin was buying a JPEG for 500 BTC in Feb 2010,” Wertheimer claimed in a tweet. “It pre-dates the the famous 10,000 BTC pizza. Satoshi himself helped facilitate the JPEG sale.”

Also read: Grayscale Bullish About Ordinals’ Impact on Bitcoin 

The 500 BTC-worth JPEG

According to the screenshot Wertheimer posted, a user named Sabunir tried selling a picture for 500 BTC, worth about $1 at the time, on the Bitcoin forum Bitcointalk.

The screenshot from Jan. 24, 2010 appears to suggest that Nakamoto helped to facilitate the transaction, valued at more than $13.5 million at current market prices.

It would also mean the supposed NFT sale is the first real-world use of bitcoin as a medium of exchange. Until now, Laszlo Hanyecz is considered the first person to make a real-world transaction when he bought two pizzas in the U.S. for 10,000 BTC on May 22, 2010.

This Twitter Space was FIRE

We discovered that:

🔥 the first purchase EVER with bitcoin was buying a JPEG for 500 BTC in Feb 2010

🔥 it pre-dates the the famous 10,000 BTC pizza

🔥 satoshi himself helped facilitate the JPEG sale

🔥 laser-eye cult in absolute SHAMBLES pic.twitter.com/b6ESOkbf0i

— Udi Wertheimer 🧙‍♂️ (@udiWertheimer) May 14, 2023

Wertheimer’s tweet has sparked speculation on whether or not the pseudonymous Bitcoin founder was actually involved in the sale of NFTs on the Bitcoin blockchain. The claim that Nakamoto might have supported the first NFT sale is important for a few reasons.

Legitimizing Bitcoin NFTs

First, the suggestion could legitimize the non-fungible token (NFT) market on Bitcoin and make it more attractive to Bitcoin investors who may not be sold on Ordinals. Currently, the Bitcoin community is divided about the impact of Ordinals on the network.

While Bitcoin fundamentalists such as Adam Back want the so-called “inscriptions” dropped for spamming the blockchain, others like Eric Wall and Wertheimer himself believe they can help the network “mature” and “scale.”

The NFTs have generated massive hype in bitcoin circles, with over 6.1 million Ordinals now embedded on the Bitcoin network, according to Dune Analytics data. But they have also led to massive congestion on the blockchain, causing transaction fees to skyrocket.

Critics say any use of the network outside of financial transactions detracts from the original vision of Satoshi Nakamoto. In 2010, the founder replied to a question on whether bitcoin should be used for non-financial purposes with an emphatic “No.”

Nakamoto backing NFTs, as Wertheimer suggested, would give credence to those in support of Ordinals, opening the floodgates for more inscriptions on Bitcoin. But that would also mean Satoshi contradicted himself on the strict financial use of BTC, which seems unlikely.

Second, if Satoshi supported the NFT sale, as Wertheimer would have everyone believe, it suggests he was interested in the potential of non-fungible tokens. Some people believe it’s possible that Nakamoto was simply testing the waters with the sale.

Many others aren’t convinced, believing he would not dabble in such things. Third, the idea that Nakamoto might have been involved in the first Bitcoin NFT transaction adds to the mystery surrounding his identity, making him an even more intriguing figure.

Satoshi didn’t support NFT sale

But does the 500 BTC picture even qualify to be called an NFT on the Bitcoin network to start with?

“It [the supposed Bitcoin NFT] was a link to a picture stored online, not an actual JPEG stored on chain,” said Twitter user Guich, in response to Udi Wertheimer’s tweet.

“Satoshi did support a transaction for something with BTC, not useless data storage on chain. Or did he suggest the actual JPEG to be stored on chain like it is done today and can you link to it?”

Wertheimer would later backtrack on his earlier assertions after bitcoin investor Mike McDonald presented him with new evidence on the supposed NFT transaction involving Nakamoto. McDonald revealed that Sabunir’s 500 BTC “was a donation rather than sale.”

“Unfortunately, it seems like the original tweet might be inaccurate,” Wertheimer admitted on Twitter.

“While a JPEG was put on sale for 500 BTC, and while Satoshi was indeed helping the seller to work out the details of the sale…it is possible that the 500 BTC were sent as a donation for a different interaction, and that the JPEG sale was never executed.”

I'm not sure if it has been dispelled yet but it seems like Sabunir's 500 btc was a donation rather than sale.

He posted his address for his NFT Jan 24, then posted it again in the btc logo thread on Feb 24. Feb 24 500 btc was sent, Feb 25 he thanks 2 people for donations 1/2 pic.twitter.com/6Rk9Ont9KU

— Mike McDonald (@MikeMcDonald89) May 14, 2023

Sabunir later thanked two people for the donations made in two separate transactions totalling 600 BTC. McDonald, who thinks Nakamoto would “have absolutely been pro-Ordinals” said “it’s reasonably likely either the donation was from Satoshi himself! Only 3 or 4 people who would have logically made the donations given timing in the thread etc.”

Perhaps Sabunir should weigh in on the matter, if he’s still around…

The media savaging of Meta CEO Mark Zuckerberg seems to never end. But in the haste to fire shots at Zuckerberg, the metaverse has taken more than a few stray bullets.

Here are some of the most recent examples.

Death and the metaverse

Mark Zuckerberg continues to be ridiculed in the press as surely as night follows day. MetaNews first reported this phenomenon in April as media outlets lined up to take shots at the Meta chief. Since then, media reports have only become more brutal.

One of the most savage pundits on the circuit is Ed Zitron of Business Insider.

“There is no reason that a man who has overseen the layoffs of tens of thousands of people should run a major company. There is no future for Meta with Mark Zuckerberg at the helm,” said Zitron earlier this month. 

Zitron goes a step further, declaring the metaverse to be dead into the bargain.

“Zuckerberg misled everyone, burned tens of billions of dollars, convinced an industry of followers to submit to his quixotic obsession, and then killed it [the metaverse] the second that another idea started to interest Wall Street,” he said.

The metaverse is dead and I killed it. I went inside and pulled all the cables out

— Ed Zitron (@edzitron) May 8, 2023

This rhetoric of the premature eulogy is commonplace in tech journalism where obituaries are trotted out regularly, even as technologies remain stubbornly active and alive. Bitcoin has been declared dead 474 times and carries on regardless. 

What is less common is for the ‘death’ to be laid at the feet of an individual, and declared a murder. As mainstream media sees Zuckerberg, he is standing over the body with blood on his hands. 

Another metaverse obituary comes from John Naughton of The Guardian. Naughton laments Zuckerberg’s complete control of Meta and his inability to manage spending.

“You’d have thought someone who had just blown $36bn of his company’s money in the pursuit of a personal obsession would have been a mite apologetic, wouldn’t you? Not a bit of it. Why? Because he has absolute control over the company,” said Naughton on Saturday.

Like Zitron, Naughton declares the metaverse dead. Obituaries are a great way to grab attention in the present moment. When death never comes, these pronouncements tend to look a bit silly. That doesn’t make them any less bruising in the present.

More measured criticisms

Some journalists are wise enough to avoid eulogies. John Herrman of Intelligencer refers to Zitron in his own criticisms of the Meta CEO, but refrains from macabre pronouncements.

“The metaverse was for Facebook/Meta, as Zitron suggests, a ‘means to an increased share price,’ but it also resembled an executive crusade — it was the awkward Zuck in those metaverse announcement videos, more animated than he’s ever been — and it’s not that hard to imagine why,” says Herman.

As Herman sees it, the metaverse gave Zuckerberg a new frontier to conquer. It was the frontier of Zuckerberg’s choosing. But  the conquest ultimately failed. Unlike most commentators, Herman does as least provide some excuse for the Zuck in the form of Covid.

“Empty offices and newly empowered employees drove some tech executives out of their minds, and the Metaverse promised a solution, or at least functioned as a response,” says Herman. 

More substance arrives

Looking beyond rhetoric, there are some substantive criticisms to be found. Due to Meta’s exorbitant spending, the company is now cutting costs and staff. Little wonder Zuckerberg’s greatest critics are Meta’s staff.

Aaron Patrick at Financial Review covered a recent meeting between Zuckerberg and employees.

During the call, one staff member told Zuckerberg he had “shattered morale” after laying off 21,000 workers. 

Patrick at least gives the Zuck credit for facing his team. But as Patrick points out, Zuckerberg is “a man whose fame is inverse to his popularity” – and Zuckerberg is very famous indeed.

The metaverse is doing fine

Mark Zuckerberg may be taking a pasting in the press but the metaverse is doing just fine.

As Tim Sweeney, CEO of Epic Games said last week, “The metaverse is dead! Let’s organize an online wake so that we 600,000,000 monthly active users in Fortnite, Minecraft, Roblox, PUBG Mobile, Sandbox, and VRChat can mourn its passing together in real-time 3D.”

The Chinese metaverse is no fun. Under the strict supervision of government officials, the virtual world is relentlessly focused on industry and healthcare. 

In fact, the Chinese Communist Party (CCP) has even gone as far as to issue a state-backed definition of the metaverse. The CCP says the metaverse has three component technologies or pillars. They are digital twins (replications of real-world locations), mixed reality, and blockchain. Gaming doesn’t even feature.

All work, no play

The Chinese metaverse will need to contend with some major challenges. In China, blockchain is heavily regulated and cryptocurrencies are outright banned.

Western firms such as Decentraland, Sandbox and the upcoming SHIB the metaverse are all powered by blockchain and cryptocurrency. China will not be able to exploit similar models. Their metaverse will therefore need to cleave virtual spaces from digital assets.

Zhengyuan Bo, a partner at the research firm Plenum, outlined how a Chinese metaverse would differ from Western models. 

“The key difference [in the metaverse] between China and the rest of the world is it’d be heavily regulated in a centralized manner,” Bo told Wired on Tuesday.

“And there’s only limited space for growth without [digital assets] for monetization.”

Brady Wang, of the market research firm Counterpoint, corroborates this view. The associate director says the metaverse in China is “very much a government-led concept.”

Spiritual opium

The Chinese government is openly hostile to video games. This informs its policy on the proper uses of the metaverse.

In August 2021 the CCP brought in rules that limited gaming to one hour on Fridays, weekends, and holidays. State media went as far as to brand online games as “spiritual opium,” in a clear reference not only to addiction but to colonialism in China and its “century of humiliation.” 

Since China and Britain went to war over the drug in the 19th century (twice), the strength of Chinese opinion on the matter should not be underestimated.

Finding other uses

Gaming applications may be off-limits in China, but other uses for the metaverse are still very much alive.

HiAR is one of the leading Chinese corporations in the space. In 2017, HiAR used augmented reality to help Chinese officials identify hotspots of dengue fever within Guangzhou. 

Dengue fever is a disease spread in the blood by mosquitos. HiAR employed drones to identify bodies of still water that might provide breeding grounds for the little blood-suckers. It then added that data to a graphical interface that directed officials to investigate.

“At the current stage, everyone emphasizes industrial applications from education, medical, travel, and industrial development,” says Siri Chen, HiAR’s marketing director.

The corporation is working on other applications of its technology too. For example, HiAR is using VR to help train factory workers to accomplish tasks such as repairs. 

HiAR finds itself in good company. The Chinese VR industry has gone through a significant boom-and-bust cycle, with the chaff now eliminated. Those companies remaining are well-placed to exploit opportunities that exist in the Chinese market, providing they do so along officially sanctioned lines.