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No one can argue that Bitcoin has come a long way in terms of buying power. In its early days, Bitcoin transactions involved thousands of coins and were often made for items that today would seem ridiculous. However, it’s important to consider that no one was sure how successful Bitcoin would become in its early years.
Bitcoin wasn’t the first digital currency. It was the culmination of many different attempts to create a reliable digital currency. Specifically, Bitcoin was the first digital currency to solve the double-spend issue that plagued the market up until that point.
Make it Rain Bitcoin
Nowadays, you can spend your Bitcoin on anything from a cup of coffee, all the way up to a luxury real estate, and of course, a Lambo. These capabilities were just a glimmer in the eyes of early Bitcoinist. The first Bitcoin transaction of all time went to programmer Hal Finney. He was among the first people to download the Bitcoin client and was in constant contact with Satoshi Nakamoto, Bitcoin’s anonymous creator. The two made history when Nakamoto sent Finney 10 Bitcoin on January 12, 2009.
The first real-world transaction made using Bitcoin is now better known as the “Pizza Day” purchase made by Laszlo Hanyecz. Hanyecz ran the first cryptographically based anonymous remailer and was involved with the cypherpunks mailing list. According to his own account, Hanyecz posted in the Bitcoin forums that he would pay someone 10,000 BTC if they picked up two large Papa John’s pizzas and delivered them to his home in Jacksonville, Florida.
“I will trade 10,000 BTC for 2 of these pizzas any time as long as I have the funds (I usually have plenty). If anyone is interested, please let me know.”
While this may seem a bit expensive at Bitcoin’s current price (10,000 x $31,800 = $318,800,000.00), it was more than reasonable in May 2010. Bitcoin’s value was worth less than a cent at that time, and the market was still only populated by programmers. The offer was quickly picked up by a teenager named Jeremy Sturdivant. In an interview, Sturdivant said he spent the coins on a trip once Bitcoin’s value hit $1.
Bitcoin has always been about giving back to the community. That’s why it’s no surprise to learn that non-profits were some of the first groups to benefit from this digital currency. The Electronic Frontier Foundation started accepting Bitcoins in January 2011. In June 2011, the investigative platform WikiLeaks began accepting Bitcoin donations as well. The platform went on to expose war crimes and corruption to the world.
The next time Bitcoin purchases would make headlines would be their use on the dark web. The dark web is all the websites not categorized and presented by search engines. Users can search these websites anonymously using a technology known as a Tor Browser. Bitcoin’s first users were privacy advocates who utilized the dark web to surf the net anonymously.
A common misconception at the time was that Bitcoin transactions were anonymous. This incorrect assumption led to Bitcoin and other cryptocurrencies becoming popular payment methods for dark web activities that were a bit more nefarious.
The dark web is notoriously filled with illicit marketplaces. In October 2013, the FBI raided and shut down one such operation named The Silk Road. This website allowed users to buy drugs anonymously. The developer of the website, Ross Ulbricht, aka the Dread Pirate Roberts, was given a life sentence for his part in the marketplace’s development. To this day, many believe that this sentence was excessive for simply creating an anonymous marketplace.
The first school to accept Bitcoin for tuition payments was the University of Nicosia in November 2013. Today, the list of schools accepting crypto tuition payments has risen. Both the Lucerne University of Applied Sciences and Arts in Switzerland and FPT University recently joined the exclusive list of educational foundations ahead of the financial curve.
Aside from dark web activity, there wasn’t major movement on the online front for Bitcoin transactions until December 2013. At that time, the retail giant Overstock.com added support for Bitcoin payments. As part of the company’s strategy, it partnered with the popular North American exchange, Coinbase.
In January 2014, the first in-game Bitcoin purchases began to spring up. Zynga hosted the first recorded testing of Bitcoin for purchasing in-game assets. The company integrated the system into seven of its games in total. In December 2014, the gaming industry gave cryptocurrencies a big nod of approval after Microsoft began to accept Bitcoin to buy Xbox games and Windows software.
First Bitcoin Real Estate
The first recorded Bitcoin real estate transaction occurred in Austin, Texas, in 2017. The transaction was negotiated in Bitcoin. However, the homeowner made the buyer convert their BTC to fiat at the last second to finalize the sale. Nowadays, buying real estate with cryptocurrency isn’t difficult. There are even services that tokenize large investment properties. Tokenized shares of large properties are much easier to sell because they require little paperwork and can be scaled down to affordable tokens.
Bitcoin Debit Cards
Another major development that helped Bitcoin take flight was crypto debit cards. Exchanges like Coinbse, Block.fi, or Binance offer their users a VISA debit card. This crypto debit card can be spent anywhere that accepts VISA. The card actually converts your purchase price from crypto to fiat at the time of sale. This strategy makes spending cryptocurrency as seamless as paying with a credit card.
Sorry No Fiat – Bitcoin Payments Only
When you review Bitcoin transactions’ history, it’s easy to envision a day where cryptocurrencies such as Bitcoin are the preferred payment method. For now, there is still a lot of infrastructure and adoption that needs to take place for this FinTech revolution to take place. Regardless, you may find that you need to keep your Bitcoin wallet handy in the next few years.