"Show me the child until the age of seven and I will show you the man," quotes British film director Michael Apted in his critically acclaimed Up documentary series. The filmmaker has been following the lives of 14 children since 1964, checking in every seven years; to see how they have developed and what milestones they have reached. It just happens then that ecommerce and bitcoin are celebrating similar divisible-by-seven anniversary milestones this year.
This gives us the perfect opportunity to reflect on their beginnings and think about where ecommerce and bitcoin will be seven years from now.
Let's start from the beginning
1994 saw the birth of ecommerce. The first transaction of the new payment platform provided by the company NetMarket, was a Sting CD (because nothing screams 1994 more than "Sting" and "compact disc"). Shortly the first online pizza order, made possible by Pizza Hut, followed. With new protocols making secure online payment processing a possibility, ecommerce companies jumped at the chance to become digitally revolutionised. Amazon launched the same year, with other now famous names closely behind.
Today, bitcoin is an intelligent seven-year-old. Invented in 2008, the original bitcoin protocols were published online in a paper by the mysterious Satoshi Nakamoto (a likely pseudonym). What's believed to be bitcoin's first ecommerce transaction happened in 2010, when Florida programmer Laszlo Hanyecz exchanged 10,000 bitcoin for two large Papa John's pizzas. Astoundingly, whilst those bitcoins were worth about £20 at the time, now they would be valued at millions. Bitcoin is a new breed of secure payment platform and today is being adopted by the current generation of online merchants. Users no longer have to barter for pizza but can instead shop at major retailers like Expedia, Dell, and Microsoft. They can buy airline tickets, or even purchase food at many restaurants and sites online (such as the American site PizzaForCoins.com, which, you guessed it, allows you use bitcoin to buy pizza).
Ecommerce, bitcoin and the future
Fast forward seven years to 2022 when ecommerce turns 28 and bitcoin hits puberty as a 14-year-old, what will it be like? Bitcoin acceptance will grow with more merchants accepting the digital currency, reaching near universal status as a standard payment method. After all, more sellers can capitalise on bitcoin's lower-than-credit-cards transaction fees, access new high-end users, guarantee of payment with natural protection from fraud and no risk of chargebacks.
This broad acceptance should serve to stabilise the value of the currency, as the user base widens and bitcoin's price becomes more closely tied to the costs of goods.
In reality, the future is already here and by 2022 we may witness the revolution of and see bitcoin emerging as the currency of global ecommerce. This is thanks to its lack of cross-border fees and the opportunities it represents for the developing world. Bitcoin will accelerate the adoption and expansion of access to international shopping, based on the ease with which it can be implemented and the lack of competing solutions. Just as many emerging markets could avoid the need to create an infrastructure of telephone poles by flying straight to mobile, in the developing world many users have never owned a credit card and could jump directly to benefiting from the better security and lower fees of bitcoin transactions. This will enable ecommerce merchants across the globe to succeed in selling without boundaries, ushering in an exciting and wild diversity of new markets.
Consistent Government regulation is also a shared horizon for both bitcoin and coming advances to ecommerce. For bitcoin, governments all over the world have different opinions on whether to legally deem it a currency and how to impose controls for tracking disreputable activity as well as exploring transaction taxes, etc. The attitude of bitcoin processors is that they're capable of meeting whatever regulatory requirements are found to be necessary, but those requirements need to be clear.
Meanwhile, ecommerce is poised to be transformed by drones, with the potential for deliveries made by these flying robots offering huge upsides for merchants and customers as far as automation and speed of shipping. The FAA is currently pursuing a flexible regulatory approach, and while hurdles and decisions about safe implementation remain, the technology may be too promising to resist.
Put yourself in 2022 and you'll see China's first space station and Germany completely phasing out nuclear energy. Plus, closer to home, you may find yourself buying products online from international sellers which don't exist today, paying in bitcoin, while watching a drone carefully land the purchase on your doorstep in an increasingly digitalised world. Just imagine the changes to our world if we checked in another seven years after that, and then another after that.
By Akif Khan, Chief Commercial Officer at Bitnet.
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