How Two Pizzas Sparked a Global Crypto Payment Revolution
Main Takeaways
Bitcoin Pizza Day commemorates the first ever real-world Bitcoin transaction. Laszlo Hanyecz's purchase of two pizzas for 10,000 BTC on May 22, 2010 set the stage for today's expansive crypto payment ecosystem.
Rapid advancements in blockchain tech and crypto, such as the advent of smart contracts and protocols enabling faster transaction speeds, have been instrumental in fostering global crypto payment adoption.
Binance, as a participant in the crypto revolution, has introduced user-friendly crypto payment solutions such as Binance Card and Binance Pay. These initiatives have seen significant adoption, furthering the goal of making crypto payments mainstream.
Mayur Kamat, Head of Product at Binance, takes the opportunity on Bitcoin Pizza Day to delve into the journey of crypto payments since that first-ever Bitcoin transaction.
When we look back to May 22, 2010, there's more to the fateful day than just pizza. In the years since then, Bitcoin Pizza Day has offered a festive way to celebrate the first crypto transaction for a real-world product. Undoubtedly, it makes for great headlines and themed celebrations, but we also have a more profound message to unpack.
So what exactly happened? On that Saturday in 2010, Laszlo Hanyecz, a Bitcoin developer, made history by purchasing two large pizzas for 10,000 BTC. The transaction was facilitated via the BitcoinTalk forum with a post that reads as follows:
At the time, Bitcoin was an extremely niche project with a small community. No major merchants had likely even heard of the cryptocurrency, let alone accepted it as a payment. Fast forward to 2023, Hanyecz's original purchase worth around $41 now equals roughly $282M.
However, this staggering figure often steals the limelight in the story. We can all imagine the feeling and sympathize with the potential loss, but we must remember that this was a monumental day for crypto payments. Laszlo's aim of "getting food delivered in exchange for bitcoins" was the first step in a long path that now sees merchants and payment providers accepting crypto worldwide.
Setting the Stage for Global Crypto Payments
As Binance's Head of Product, I see first-hand how many payment services and products we offer today stem from that pivotal moment in 2010. Bitcoin Pizza Day is, therefore, a time for me to reflect on how far we've come and look toward the industry's future.
Over the past decade, we've gone from simple transfers on forums to crypto-powered cards, terminals, and payment solutions. According to Deloitte research, nearly three-quarters of US consumer businesses plan to accept crypto payments by the end of 2023, with 87% agreeing that this will give them a competitive advantage. That's a significant finding showing the speed of crypto payment adoption.
Developing countries have also harnessed the power of crypto payments at a rapid rate. P2P options and mobile crypto payments have proved extremely popular. Countries such as Nigeria and Kenya have even "leapfrogged" traditional bank transfers and digital payment models, as research by Chainalysis shows.
This tremendous growth is not only due to crypto's growing global adoption. It's also heavily dependent on innovation and the improvement of blockchain technology. Sending a crypto payment is no longer as technical or complicated for newcomers as it was in Laszlo's day. It's now achievable with just a few clicks.
What Enabled This Growth? Innovation
A lot has changed in the crypto space since 2010. Ethereum's launch in 2015 brought smart contracts and improved coding capabilities for developers. Nowadays, blockchain-based smart contracts enable businesses to automate numerous complex processes quickly and securely. Payments are, of course, part of this too.
New protocols and blockchains allow faster transaction speeds and improved scalability to handle thousands of transactions per second. This enables larger projects, such as global payment networks, to be built on the blockchain. Bitcoin has always had difficulties competing with the transaction speeds of major card providers. But now, the gap is smaller with the likes of the Lightning Network and newer blockchains.
We now have stronger security measures than ever to protect users from hackers or malicious actors. The end-to-end payment stack from fiat on/off ramps, crypto exchanges, wallets and payment intermediaries has increased their security levels, including using blockchain for facilitating part or entirety of the transaction.
All these technological advancements have helped us take a huge leap in just 13 short years. To buy pizza with crypto, you no longer have to post on Bitcointalk.org!
Creating Familiar Crypto Payment Solutions
At Binance, we're proud to participate in this technological revolution. We're committed to furthering the freedom of money, and all our products and services have freedom ingrained in them. So how have we taken this approach and applied it to crypto payments? By offering intuitive and familiar ways for users to pay with crypto, even if they're brand new to technology.
Millions of people worldwide use a credit or debit card for daily purchases. It's something we're all likely familiar with. So, in 2020, we took the concept and added crypto to the mix.
With Binance Card, users convert their crypto assets to fiat currency at the point of purchase. There are no fiddly orders to make or wallet addresses to manage. So, regardless of whether the merchant accepts cryptocurrency, you can use crypto to pay. The product has now amassed over 2.3 million registered users with more than 13 million transactions in 2023 over 40 countries.
We also saw the popularity of online digital payment platforms. However, even today, these have limited functionality when it comes to cryptocurrency payments. In 2021, we introduced Binance Pay as a contactless, borderless, secure cryptocurrency payment option. For the user, it offers zero fees, a simple process, as well as lightning-fast and, at times, integrated payments.
Since its launch, Binance Pay's user numbers have steadily increased. Within two years, approximately 30 million users have registered for Binance Pay, with over $79 billion processed in pay volumes to date. More than 10,000 merchant partners, from pharmacies to mobile data providers, have been onboarded to accept our crypto payment solution.
A Payment Revolution With No Signs of Slowing
We sincerely hope that Binance Card and Binance Pay will continue to play a vital role in the expansion of digital crypto payments worldwide. However, another key piece of the puzzle will be increased adoption by merchants, users, and governments.
More companies are integrating blockchain into their business models than ever, driving innovation and growth. Governments and regulators worldwide are also recognizing crypto's potential and underlying technologies.
It is remarkable to consider how far we have come since 2010 – from an obscure experiment conducted by a few tech-savvy individuals to an industry valued at hundreds of billions of dollars today.
There's no better day to sit back and reflect than on one like Bitcoin Pizza Day. So, while some stand stunned at the price paid for the pizzas, we look at it as the start of something momentous.
When we then look to the future, we can be more excited than ever about what the next 13 years may hold. The potential of blockchain technology and digital assets to create a more inclusive financial system will only grow. It will empower individuals and businesses alike more than ever.
So let's continue to celebrate Bitcoin Pizza Day together, not just for the memories, but also as a reminder of crypto's incredible potential and our responsibility to shape its future.
– Mayur Kamat, Head of Product at Binance, Bitcoin Pizza Day 2023
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