Today, May 22, is Bitcoin Pizza Day – and this year it marks a decade since Lazlo Hanyecz exchanged 10,000 Bitcoins for two large pizzas
Bitcoin Pizza Day, celebrated on May 22, commemorates the first-ever real-world cryptocurrency transaction, completed on this date in 2010 – a decade ago this year. Ten years ago Lazlo Hanyecz exchanged 10,000 bitcoins – then the equivalent of $80, now worth $91 million – for two large pizzas.
Enabling the acquisition of an Italian cheese-and-tomato-based food staple is possibly not what Satoshi Nakamoto – the still-unmasked creator (or creators) of Bitcoin, the most well-known cryptocurrency – had in mind when publishing his white paper in October 2008, before mining the genesis block and launching the network the following January.
However, it’s impossible to know for sure, for Mr Nakamoto has remained both anonymous and silent since establishing Bitcoin, which has now spawned thousands of other, blockchain-backed cryptocurrencies. In the decade since Mr Hanyecz’s two-pizza purchase, the value of cryptos – both financially, and in terms of benefiting society – has expanded like pizza dough in the oven.
Already, just a dozen years on from Bitcoin’s launch, the applications of blockchain – the distributed digital ledger technology underpinning the cryptocurrency – range from verifying the providence of diamonds, or tracking pork (so recalling contaminated food would be easier to do), or even paying your dentist. This is made possible by cryptosassets being transparent and digitally accessible to all.
Even at blockchain’s relatively early stage of development – some call it “the 1994 of the Internet” – there is a multitude of examples, all over the globe, showcasing how cryptos can be an incredible force for betterment. “We are already seeing social impact solutions that otherwise wouldn’t be possible without cryptocurrency technology, such as expediting the sustainable transfer of aid, and providing secure government services,” says Doug Galen, a lecturer at Stanford Graduate School of Business, and Chief Executive Officer of RippleWorks, an organisation that pairs startup and technology experts with social ventures around the world.
“When applied in the right use cases, we may well see cryptocurrency do to certain industries what the internet has done to how we access information, or what mobile technology did to how we connect people.” And that, one suspects, was truly what the people behind bitcoin were striving for.
In Mr Nakamoto’s white paper, Bitcoin: A peer-to-peer electronic cash system, the author (or authors) proposes “a purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution”.
The white paper states: “No mechanism exists to make payments over a communications channel without a trusted party. What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.
“Transactions that are computationally impractical to reverse would protect sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers.”
Bitcoin and more advanced cryptos have solved a number of the issues outlined by Satoshi Nakamoto, thus causing even sceptics to concede that this form of digital currency could well be the future of money. With an inbuilt safeguard against fraud and false identity – thanks to the blockchain ledger technology underpinning bitcoin – greater transparency, plus lower fees for cross-country transactions, and by being free from government interference, cryptos have begun transforming payment systems in emerging markets.
Here follows four industries where some of the most interesting uses of cryptoassets can be demonstrated.
With an inbuilt safeguard against fraud and false identity greater transparency, plus lower fees for cross-country transactions, and by being free from government interference, cryptos have begun transforming payment systems. Banks serve as the critical storehouses and transfer hubs of value. This is why the likes of UBS and Barclays are developing blockchain-based solutions to upgrade back-office functionality and settlement. The Financial Times noted recently that cutting out middleman costs could save the industry $20 billion.
Blockchain-powered cryptoassets lend themselves particularly well to healthcare, and in an industry not normally famed for embracing technology many developers are beginning to introduce disruptively innovative applications at an impressive rate.
Blockchain technology has the potential to be transformational in supply chains, too, as it offers a transparency and incorruptible method of record-making that was previously unavailable. Supply chains are central to the food industry, and with consumers becoming ever-more concerned about the provenance of what they put in their mouths, applications on blockchain-based platforms – for example at OriginTrail – allow them to know where in the world their purchases came from and how they were produced. As such, on a blockchain, tampering with sell-by dates and adding secret ingredients is impossible.
Elections require authentication of the identity of those voting, in addition to secure record-keeping, plus trustworthy tallies to identify the election winner. Blockchain tools can be used to ensure vote casting, tracking, and counting is correct and tamper-proof. Follow My Vote is one example of a blockchain voting startup.