In 2009, Bitcoin was created to act as an alternative to traditional finance, allowing not only for speculation and stores of value but also to act as a currency that can be used instead of dollars and pounds to pay for everyday goods.
Over two decades later, and whilst the value of the market has increased exponentially and the infrastructure has improved significantly thanks to intuitive and easy-to-use conversion platforms and on-ramps, the enthusiasm for crypto in the retail sector has lagged behind somewhat.
In some respects, cryptocurrency is in the position ecommerce was before the first copy of Sting’s Ten Summoner’s Tales was sold; it is an idea filled with promise just waiting for a breakthrough to provide standardisation and trust.
Will this change? To understand what comes next for crypto-retail, it is important to know how cryptocurrency has been used beyond the blockchain ecosystem and what lessons have been learned.
What Was The First Product Bought Using Cryptocurrency?
The best place to start with retail cryptocurrency is in 2010, a year after Bitcoin launched and the modern blockchain was established.
Whilst there were digital currencies available before Bitcoin, many of them either acted as analogues to travellers’ cheques or as digital gold. In both cases, they were dependent on and legally part of the existing financial system.
Bitcoin and the blockchain changed this, creating a decentralised ledger that allowed for a peer-to-peer currency without the need for middlemen organisations such as banks. It was closer to digital cash or even digital gold than a typical bank account.
Bitcoin Pizza Day
It took about a year before Florida native Laszlo Hanyecz asked members of the Bitcoin Talk forums to buy him two large pizzas in exchange for 10,000 bitcoins (then worth $41 but now worth over $900m).
This day, known as Bitcoin Pizza Day, was long before any infrastructure was in place beyond sending and receiving cryptocurrency tokens, but it was a proof of concept that people wanted to buy and sell physical products using digital currencies.
The Pilot Wave
Over the 2010s, there were a number of pilot schemes that explored the potential to use Bitcoin and later other tokens such as Ether and stablecoins as a way to provide alternative payments or to ride the early crest of the wave back when Bitcoin was valued at less than $10,000.
Many of these, such as the Bitcoin Bucket from KFC, were always intended to be limited-time experiments to test the waters, but other retailers, such as Steam, made a concerted effort to accept crypto until exposure to volatility in the market forced them to stop.
The Bitcoin Nation
The nation of El Salvador made a concerted effort from 2021 until 2025 to make Bitcoin legal tender, which meant that all businesses needed to accept the cryptocurrency. A government-run wallet was set up called Chivo, and taxes could be paid in either Bitcoin or US dollars.
Ultimately, whilst it was ultimately a mandate by the International Monetary Fund which ended Bitcoin as legal tender, just eight per cent of El Salvador residents were using Bitcoin by 2024.
Why Has Bitcoin Not Been Embraced As Currency?
The promise of a completely digital currency as part of an alternative economy is very popular, but Bitcoin has particularly struggled to be embraced as a currency. Here are just a few of the reasons why:
- It is typically more financially lucrative to hold, trade or stake Bitcoin rather than trade it due to its high value and volatility.
- A combination of transaction fees for processing payments and the time it can take to process said transactions can lead to complications if the value of the token changes so significantly that it is no longer sufficient to cover a transaction.
- All transactions are final; the only recourse to reverse a transaction is to fork the entire chain, something that famously happened to Ether in 2016 due to the events surrounding the DAO Hack.
How Can Retail Embrace Cryptocurrency?
Retailers and customers alike want reliable, easy-to-use and easy-to-understand payment systems, and for cryptocurrency to be embraced in this space, more needs to be done to increase confidence, knowledge and comfort using the systems.
Crypto needs a PayPal moment, which simplifies and secures crypto payments for everyday goods, and here are three elements that can help this to become a reality.
Reduce Wallet Risk And Exposure To Volatility
One mistake that has been made historically is to treat retail purchases exactly the same way as a user-to-user transaction. Instead, an additional security layer or escrow system could reduce the risk and exposure to volatility.
Similarly, using a system where cryptocurrency payments are automatically converted to fiat helps to avoid exposure to potential token volatility, making it no different from using a credit or debit card.
Integrate It Into Existing Payment Systems
Rather than requiring customers and retailers to use entirely new and often quite confusing interfaces, retail crypto needs to be easy to enter, easy to use and easy to exit.
Easy-to-understand conversion platforms and exchanges can help with this, as can integrations into existing payment processors and platforms that retailers are familiar with.
Focus On Liquid Tokens And Stablecoins
Liquid tokens and stablecoins are quicker to process and are less exposed to problematic volatility, making them a better and more stable option for retail.