What Will E-Commerce and Bitcoin Be Like in 2022?

There's an old saying quoted at the beginning of each entry in Michael Apted's critically acclaimed "Up" documentary series, which checks in on the lives of 14 individuals every seven years: "Show me the child until the age of seven and I will show you the man." It just happens that both e-commerce and Bitcoin are celebrating similar divisible-by-seven anniversary milestones this year, giving us reason to reflect on their beginnings and anticipate where they'll be seven years from now.

How it All Began
Twenty-one years ago, 1994 saw the birth of e-commerce, with the first transaction of the new payment genre provided by the company NetMarket. (The purchase, if you're curious, was a Sting CD, because nothing screams 1994 like Sting and compact disc.) Soon after came the first online pizza order, made possible by Pizza Hut, establishing the precedent that great online technologies should be launched with the purchase of pizza. With new companies such as CyberSource making secure online payment processing a possibility, e-commerce companies took off. Amazon.com was founded in 1994 as well, with Dell, Yahoo, eBay and other now famous names launching soon thereafter.

Today, Bitcoin is a precocious seven-year-old. Invented in 2008, the details for the design of the original Bitcoin protocol were published online that same year in a paper by the mysterious Satoshi Nakamoto (a likely pseudonym). What's believed to be Bitcoin's first e-commerce transaction happened in 2010, when Florida programmer Laszlo Hanyecz exchanged 10,000 bitcoin to someone who bought him two large Papa John's pizzas. Those bitcoins, worth about $30 at the time, would be worth millions today.

The new breed of secure payment processing offered by Bitcoin 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 Overstock.com, Dell and Microsoft; buy airline tickets; or even get food at many restaurants and websites (such as PizzaForCoins.com, which, you guessed it, let's you use Bitcoin to buy pizza).

Show Me E-Commerce and Bitcoin Today, And I will Show You the Future
Peering forward another seven years to 2022, when e-commerce turns a mature 28 and Bitcoin hits puberty as a 14-year-old, what will they be like? Bitcoin acceptance should continue to spread and take hold with merchants, reaching near universal status as a standard payment method as more sellers capitalize on Bitcoin's lower-than-credit-cards transaction fees, access to new high-end users, and guarantee of payment with natural protection from fraud and no risk of chargebacks. This broad acceptance should serve to stabilize the value of the currency, as the user base widens and Bitcoin's price becomes more closely tied to the costs of goods.

By 2022, we may very well see Bitcoin emerging as the currency of global e-commerce due to its lack of cross-border fees and the opportunities it represents for the developing world. As science fiction writer and futurist William Gibson said, "The future is already here — it's just not very evenly distributed." When it comes to e-commerce and the developing world, Bitcoin will speed the adoption and expansion of access to international shopping based on the ease with which it can be implemented and the lack of current competing solutions.

Just as many emerging markets were able to leapfrog the need to create an infrastructure of telephone poles by jumping straight to cellular, 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 e-commerce merchants from all over the world to succeed in selling to anywhere on the globe, ushering in an exciting and wild diversity of new markets.

Government regulation is also a shared horizon for both Bitcoin and coming advances to e-commerce. For Bitcoin, governments all over the world have come to different opinions on whether to legally deem it a currency, how to impose controls for tracking nefarious activity, if and how transactions should be taxed, etc. The attitude of Bitcoin processors like Bitnet is that we're capable of meeting whatever regulatory requirements are found to be necessary, but also that those requirements need to be developed in a collaborative dialogue with the industry to make sure that compliance is technically possible. Those jursidictions that "get it right" on the regulatory front will disproportionately benefit from the economic activity that will rapidly flow to the inhabitants of their markets.

Meanwhile, the e-commerce world 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.

So, don't be surprised if in the year 2022 you're buying products online from international sellers which didn't exist today, paying in bitcoin, and watching a drone carefully land the purchase on your doorstep not long after. Just imagine the changes to our world if we checked in another seven years after that.

John McDonnell is CEO of Bitnet, provider of a digital commerce platform enabling enterprise-scale merchants to accept bitcoin payments