The origin of the term is the 1980 Sugarhill Gang song "Rapper's Delight". Most people think the song was the first success of Hip Hop music. In reality, Rapper's Delight - almost 30 years ago today - was the first time Hip Hop died.
The Sugar Hill Gang was created when the owners of a record label picked up three nobodies who had never worked together and never performed live and manufactured a band from them. The music they made was produced in the absense of almost every defining characteristic of the Hip Hop music that was thriving in the Bronx. The group had no DJ to rhyme over, no rivalry or competition with other crews, and no prospect of concert play or crowds to entertain. The word "rapper" itself was a fabrication by the Sugar Hill Gang: in the Bronx, people who rapped were called MCs because as Masters of Ceremony their job was to move the crowd. The Sugarhill Gang had no such purpose. They moved Hip Hop from the street to the mainstream, from the live to the studio-generated, from the crowd-centric to the rapper-centric, and from the active to the passive. If that wasn't enough, Big Bank Hank, one of the Sugarhill rappers, borrowed his verse on Rapper's Delight from a legendary Cold Crush Crew MC and promised the Crew a record deal in return. Intead, he used the rhymes to make the sham of Rapper's Delight the first breakthrough of Hip Hop to the mainstream and to leave the Cold Crush in the dust.
This is why Jay-Z says:
"I'm over-chargin' niggas for what they did to the Cold Crush
Pay us like you owe us for all the years that you hoed us".
Rapper's Delight killed Hip Hop before it left the Bronx.
Person 2: Rapper's delight.