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True Micropayments with Bitcoin
- deleted 11y ago[deleted]
- tlrobinson 11y agoMicropayment channels still utilize Bitcoin, they just don't require an on-chain transaction for every payment.
- CyberDildonics 11y agoThere isn't a scalability problem in the first place, just a few people with misaligned incentives trying to convince people there is. Also sidechains absolutely can reduce blockchain traffic, why would you think they can't?
- woah 11y agoA micropayment channel is a sidechain.
- LAMike 11y agoThis solves the problem of inflating the Blockchain, now a user can have multiple offline transactions and have it count as only 1 when everything is settled. Anyone else think Micropayments in Bitcoin will be it's killer app?
- stale2002 11y agoWe could be doing that now, on the blockchain instead. Inflating the block chain isn't really a "problem" until you get to very large values.
- LAMike 11y agoAnyone have any guesses on what the 21 team will release as a product for consumers? The best theory I've heard is a charger that mines BTC for you when it's done charging your phone for the night.
- tommynicholas 11y agoThat is an excellent idea, doesn't your phone continue to use power after it's done charging? This wouldn't produce a ton of Bitcoin but it would be an opportunity for a net-positive outcome from a cost perspective which is clever.
- ssharp 11y agoHow is it net-positive from a cost perspective? From what I remember, 21 takes a large cut of the Bitcoin "mined" and you'll spend far more on electricity than you'll get in return for Bitcoin.
- tommynicholas 11y agoI assuming chargers were eating energy after the phone was done charging, if they're not then this wouldn't be energy positive and isn't as exciting.
- mafuyu 11y agoThe energy that idle chargers use up is negligible, and even then, it's not as if you can just turn that into computational power. You'd still need to consume (significantly) more energy to mine.
- nadaviv 11y agoYou're right indeed. 21's mining chip does give a negative ROI, even in areas where electricity is very cheap. Why would anyone buy a $400 mining chip that costs more in electricity than it produces in bitcoins, when they can just buy $400 worth of bitcoins? Beats me...
- roymurdock 11y agoThe scale of the Bitcoin mining buildout indicates that grid computing may indeed be feasible after all given the appropriate compensation, and potentially better than or competitive with cloud computing for some applications. Now that we have a quick way to set up a fine-grained bitcoin micropayments channel between any two machines, an obvious next step is to start generalizing this to the renting out of other compute resources beyond just storage. [1] Can anyone provide an example of a problem that would be better solved with grid computing/micropayments instead of cloud computing? [1] https://21.co/learn/grid-computing-with-bitcoin-micropayments/#bitcoin-mining-as-grid-computing https://21.co/learn/grid-computing-with-bitcoin-micropayment...
- swiley 11y agoPerhaps a community maintained search engine?
- ikeboy 11y agoAssuming grid computing ends up cheaper, any problem that doesn't depend on high availability. Why grid computing might be cheaper: people could rent out excess capability that would otherwise go wasted, so their marginal cost of computing is 0 or close to 0. The question is how much overhead would be, but building on a marginal cost of 0 is better for costs than any dedicated solution. It's not obvious that those considerations outweigh the cost efficiencies of centralization, but it's by no means obvious that they wouldn't or can't. Think the power grid as an example. If power wasn't fungible in close to real time (like cloud computing today, unless you specifically set it up that way) our prices would be more expensive, because less participants would be producing energy. The fact that anyone can, in theory, produce energy and sell it on a market which accepts the best bid improves the market for everyone. This seems similar.
- roymurdock 11y ago> any problem that doesn't depend on high availability Do you have any specific examples of resource-intensive computing problems (other than SETI@home) that do not depend on high availability? Seems a bit like a solution in search of a problem. I like your example of the power grid as an explanation for how owners of small amounts of computing power might interact with the larger system and have an impact on market prices. But if the analogy truly holds, it would be a good indication of how negligible rewards would be to smaller entities (individuals running computers or smartphones).
- Animats 11y agoThis is really a private payment network that happens to be denominated in Bitcoins. You have a balance denominated in Bitcoins on a server at "21.co". "Before you can execute an off-chain transaction in the 21 system, you need a bitcoin balance at 21.co." It's a centralized micropayment system. So only people with 21.co accounts can play. Hey, it worked for PayPal. You can initiate a "flush" transaction which asks "21.co" to sell you real Bitcoins in exchange for their book-entry Bitcoins. Sellers would presumably do this at least once a day, avoiding keeping a substantial balance on "21.co". Given the track record of "hosted Bitcoin wallets", which tend to be "take the money and run" operations (anyone knowing the whereabouts of Cryptsy's "Big Vern", please contact the Silver Law Firm) that's a good feature. There's no real reason this needs Bitcoins at all. This scheme would work if it was denominated in dollars. There's a startup opportunity here. Reuse the micropayment system, forget about the Bitcoins. You'd deposit money into your micropayment account with a credit card, and your computer can then spend against that balance. Merchants could "flush" their balance via an ACH transfer to their bank.
- roymurdock 11y agoThey use Bitcoin due to its granularity (1 Satoshi = 0.0000040352 USD) and because users can mine a small trickle of new money easily with the hardware they have designed. But mainly because it's much easier than bootstrapping users onto a new payments network from scratch. Yes, you could design a new micropayments system denominated in dollars with electronic wallets that would piggyback off card and bank payment networks, but you would add latency in flushing (admittedly negligible) amounts to your bank, and if your service became large enough, credit card providers would probably disallow you from using their infrastructure to deposit billions of tiny amounts into micropayment wallets, which would generate a lot of overhead and fees for a relatively small transaction volume. Seems to me that the reason this micropayment startup doesn't exist is because it wouldn't solve any pressing problem at the moment.
- comex 11y agoThis is false. The micropayments system they are using is based on fancy Bitcoin transactions and does not require anyone to be trusted: https://21.co/learn/intro-to-micropayment-channels/#how-micropayment-channels-work https://21.co/learn/intro-to-micropayment-channels/#how-micr...
- ukd1 11y agoIsn't the library already out here? https://testpypi.python.org/pypi/two1 https://testpypi.python.org/pypi/two1
- dbalan 11y agoThat device looks awefully lot like a Raspberry PI. Anyone know the exact spec?
- tlrobinson 11y agoIt's a Raspberry Pi 2 with 21's mining chip.
- konschubert 11y agoI recently drafted a protocol for micropayments. It is almost trivial, and while it requires a trusted payment provider which issues and validates tokens, the way it is designed should prevent any vendor lock-ins. My goal was to design something that avoids the need for user authentication and logins towards the website which provides content or services. Anyway, here's the link to the specification I wrote: http://konstantinschubert.github.io/pennytoken-spec/ http://konstantinschubert.github.io/pennytoken-spec/ I am very interested in your opinion and I hope it is not considered rude that I am posting here.
- clarkmoody 11y ago> while it requires a trusted payment provider which issues and validates tokens The most interesting part about Bitcoin micropayments is that they can be done in such a way that you do not have to trust a "payment provider."
- konschubert 11y agoI know. But I think at least for instantaneous payments you will need SOME trusted party, even if you trust this party only for small amounts and a limited amount of time. Also, regarding bitcoin, I'm worried about the future of the network after the recent drama and I'm concerned about the computing resources spent in securing the network. I realize that this expense in securing the network is a necessary component of the game theory. But apart from the ecological impact, I think that the cost of it might be higher than trusting a provider who is ultimately backed by the state. I think bitcoin is amazing and I'd love for it to succeed. However, I believe that for micropayments, the most pragmatic solution might be the one with trust involved.
- RustyRussell 11y ago(Disclaimer, work for Blockstream on Lightning). Commenters are right that micropayment channels have been around for years; but they're not widely used; more convenience is a big win. Lightning uses more sophisticated generalised 2-way channels, plus routing to form a network, but it's still early days.
- contingencies 11y agoSmiles from China Rusty. We met back in Sydney in the late 90s/early noughties. I wrote a Wikipedia page for your pettycoin project but it was deleted by the notability police. Funny that it changed your career path, as I'd found it significant in distant observation! Congrats on the new role. I was in touch with your apparent new co-worker Jorge (congrats to him too) on the more socially engaged side of economies circa time of writing http://www.ifex-project.org/ http://www.ifex-project.org/ ... I left Kraken now, still thinking to push IFEX forward if anyone expresses interest. Too many of these new systems have assumptions baked in, IMHO we still need a business-level transaction protocol that doesn't suck to glue these innovations together with conventional assets/systems of exchange and to justify (possibly automatically) in business terms (speed, reputation, redundancy, assets supported, jurisdictions (not) traversed, etc.) versus a well expressed risk model (critical) why they should be used. I feel this is a big part of the lineage-of-cryptoanarchist fintech equation that is missing if broad social adoption is desired.
- nadaviv 11y agoThis is an implementation of "simple" directional payment channels between two parties, without the concept of hubs (as in the original LN) or p2p routing (as we have in LN today), and which expire at at a pre-determined timestamp (forcing you to close & re-open the channel every once in awhile). This is useful for cases where one party wants to send payments in small increments to another party (e.g. pay-per-kilobyte for internet access). Funds locked up in the channel are only usable for transacting between the two parties, and funds can only be sent in one direction. BitcoinJ implemented this nearly two years ago: https://bitcointalk.org/index.php?topic=945401.0 https://bitcointalk.org/index.php?topic=945401.0 And BitPay released this as part of BitCore around 1.5 years ago: https://github.com/bitpay/bitcore-channel https://github.com/bitpay/bitcore-channel The innovation in payments channels being discussed nowadays is something completely different: bi-directional payment channels that can be kept open indefinitely, with a peer-to-peer routing layer that makes it possible to send off-chain payments to anyone in the network and not just to one specific party.
- nadaviv 11y agoCorrection: the bitcointalk link above is wrong, it should be https://bitcointalk.org/index.php?topic=244656.0 https://bitcointalk.org/index.php?topic=244656.0. I also got the times wrong because of that - BitcoinJ released payment channel support 2.5 years ago, not "nearly two years ago" as in the original comment (which cannot be edited now).
- Animats 11y agoLet's take a look at their Bitcoin miner. From their FAQ: $399, 50 gigahashes per second, 0.16 Joules per gigahash. Plugging those numbers into a Bitcoin mining calculator [1], initial revenue is under $0.05/day, and declines as the difficulty increases, until you're paying more for power than you're getting out in Bitcoins within a year. This does not make sense financially. What's the point of the "miner", then? You don't need it to do transactions. This could be a pure software product. [1] https://bitcoinwisdom.com/bitcoin/calculator https://bitcoinwisdom.com/bitcoin/calculator
- solotronics 11y agothe point is to remove the barrier of buying bitcoins and instead give these new users a bitcoin generator so they can try out bitcoins.. its less about being profitable and more about providing a platform to participate in the bitcoin ecosystem.
- 7373737373 11y agoRelated, here is a probabilistic nanopayment implementation for Bitcoin: https://github.com/paulkernfeld/bitcoin-nanopayment https://github.com/paulkernfeld/bitcoin-nanopayment And here a unidirectional payment channel contract for Ethereum (.sol file): https://github.com/obscuren/whisper-payment-channel https://github.com/obscuren/whisper-payment-channel