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At some point cryptocurrencies felt like they could get us most of the way to working micropayments. Unfortunately Bitcoin's huge transaction fees and still unr

At some point cryptocurrencies felt like they could get us most of the way to working micropayments. Unfortunately Bitcoin's huge transaction fees and still unreliable service made that impossible. I still hope this will change at some point, but I can't imagine how a sufficiently dominant cryptocurrency could ever emerge again.

buboard 7y ago
Bitcoin is your cash reserve, its like tour bank account and you dont go to the bank every day. There are multiple solutions to the speed issues. The real issue is that crypto is incompatible with any taxation system everywhere
- tom_mellior 7y ago
  I don't know what you mean by the bank account analogy. I don't go to the bank everyday, but I can interact with my bank account several times per day. I can make free money transfers to any SEPA account, so this is also part of what micropayments should be. It's just tedious, and the money takes two to three days to arrive.
  - stephen_g 7y ago
    Two to three days to arrive? Why? In Australia, our regular banking system lets you register your mobile phone number (or business/company number or email) as a 'PayID' and then that's all the info you need to send somebody an instant payment... Even our older system usually only takes until the next afternoon or morning on a business day (I believe the older inter-bank payments are settled in two batches per business day).
    - tom_mellior 7y ago
      There is certainly no technical reason for the delay, a transfer should just be a transfer of a few bytes of information. I think the usual explanation is that this system gives banks a pool of money that they are always free to invest in the time that it's neither in the original owner's nor the recipient's account.
  - buboard 7y ago
    i mean that bitcoin has de facto become a store of cash rather than cash at hand. It's indeed not like a bank since there are no chargebacks, no insurance nothing. It's different. But there are also multiple solutions to the speed issue, so speed is not really what s holding back widespread adoption. SEPA is bank transfers with delays of entire days - that makes them completely unfit for micropayments.
    - Scarblac 7y ago
      For much of Europe, SEPA transfers are already as good as instantaneous and I think the other countries will follow.
  - zAy0LfpBZLC8mAC 7y ago
    That's sort-of not true anymore, SCT Inst is a thing and allows transfers between participating banks within seconds around the clock, every day of the year. It's just that some banks don't seem to see the need, and some think it's somehow a premium feature that you can charge for, some even multiple EUR per transaction (outbound, I don't think anyone charges extra for receiving SCT Inst transfers). But then, many banks seem to understand that that is bullshit and offer it at the same price as regular transfers, which for many banks means free of charge for non-businesses. I can only hope the former will notice that offering ancient technology is not a good way to keep customers.
  - pmarreck 7y ago
    > It's just tedious, and the money takes two to three days to arrive So then it's not free. Instead of charging you a transaction fee, they charge you "time", since time is money, and they can make money off the in-flight money (via interest, ostensibly).
- kalleboo 7y ago
  In some countries, it is common to make even tiny payments (down to 10 cents) directly between bank accounts, instantly, for free. https://en.wikipedia.org/wiki/Swish_(payment) https://en.wikipedia.org/wiki/Swish_(payment)
  - buboard 7y ago
    it's not cash though (and not global). the promise of cryptocs is that we 're getting back the versatility and anonymity that we had with physical cash
  - chabes 7y ago
    What about people without bank accounts?
    - Scarblac 7y ago
      I don't actually know if that is feasible in, say, the Netherlands. I've never heard of paying taxes cash, for instance. And jobs pay wages to bank accounts.
    - coldtea 7y ago
      Those people are usually not the demographic artists and content creators promoting micropayments have in mind in the first place...
    - kalleboo 7y ago
      Why would someone not have a bank account? Having a large unbanked population seems like one of those U.S.-centric problems which is rooted in something deeper.
  - tom_mellior 7y ago
    > some countries The Wikipedia page says "Area served: Sweden" and points out that even Norway and Denmark use similar systems. So this is quite limited. But sure, would be good to have something like this globally.
    - 7y ago
- ryukafalz 7y ago
  I've been interested in GNU Taler for that reason; it feels like it could be a useful tool for online payments while still being taxable. (Still feels pretty early in development though.)
pjc50 7y ago
I can't see how a system in which every node has a copy of every transaction forever could ever be suitable for micropayments, which if they took off would be of the order of millions a day.
- tom_mellior 7y ago
  You're assuming that no innovation is possible in this space. Besides, "every node" is not true of Bitcoin even today. Neither my desktop nor my mobile Bitcoin client save a complete history. Miners need history, but maybe there can be a different model of mining. I'm not a customer at all the credit card companies out there, only one. Maybe I could also be only be a customer of only one fixed "miner" in some future system? Possibly a new but fixed one I can pick per transaction, rather than today's essentially random assignment of who gets my fees? Yes, this wouldn't be Bitcoin anymore, but as I wrote above, I don't think Bitcoin is what we need anyway.
  - wruza 7y ago
    >Miners need history I’m pretty sure that last time I repaired an ASIC it had just one crappy 256MB sd card (which was the reason it needed a repair). Maybe pool coordinators still need history, idk.
- gwern 7y ago
  You don't need a copy of every transaction forever. Look at MimbleWimble.
zozbot234 7y ago
> Unfortunately Bitcoin's huge transaction fees and still unreliable service made that impossible The cost of crypto transactions has always been known, it just used to be paid for by the userbase as a whole when the block reward was more substantial, whereas right now the user pays for their own transactions. I actually think the Lightning network is a semi-viable solution, it essentially overlays a "credits" system onto the original network that's especially appropriate for micro-transactions.
- kylebenzle 7y ago
  The Lightning Network was actually vaporware from day one that still makes absolutely no sense without first increasing the block size (something Bitcoin Core refuses to do). Bitcoin Cash is the Bitcoin and micropayment solution you are looking for.
DennisP 7y ago
The second-largest cryptocurrency is about a year away from a sharding system that multiplies scale by a factor of 512, with room to grow as hardware improves. That's for purely on-chain transactions. There's also a partly-offchain solution called "zkrollups" that uses zero-knowledge proofs to reduce the storage for a simple value transfer to 11 bytes, without introducing any unpleasant security assumptions like requiring the user to be online to receive payment or prevent cheating. Combining that with sharding gets to about a quarter million tx/sec. If that's not sufficient for micropayments, it's fairly straightforward to extend zkrollups to make payments probabilistic: e.g. to pay one penny, send a 1% chance of paying a dollar. There are some potential doublespending issues here but for voluntary tips that's not a problem.
cnasc 7y ago
I work at a startup trying to do this (Ethereum rather than Bitcoin): https://unlock-protocol.com/about/ https://unlock-protocol.com/about/ Transaction fees are there, but don't have to be enormous. Our code can also optimistically unlock the page under the assumption that pending transactions will eventually go through, so block time is also less of a concern. Right now the tricky thing is that it requires a browser extension if you want to transact directly with crypto (or use one of the few browsers that come with a built-in web3 wallet). We also have a managed crypto wallet service that allows people to pay with credit cards, but it isn't widespread because it can only be used to buy keys for locks we have approved.
cft 7y ago
Not only transaction fees, but IRS decision to tax it as property
teh_infallible 7y ago
Bitcoin Cash solved those problems and works flawlessly today.

buboard 7y ago

Bitcoin is your cash reserve, its like tour bank account and you dont go to the bank every day. There are multiple solutions to the speed issues. The real issue is that crypto is incompatible with any taxation system everywhere

tom_mellior 7y ago
I don't know what you mean by the bank account analogy. I don't go to the bank everyday, but I can interact with my bank account several times per day. I can make free money transfers to any SEPA account, so this is also part of what micropayments should be. It's just tedious, and the money takes two to three days to arrive.
- stephen_g 7y ago
  Two to three days to arrive? Why? In Australia, our regular banking system lets you register your mobile phone number (or business/company number or email) as a 'PayID' and then that's all the info you need to send somebody an instant payment... Even our older system usually only takes until the next afternoon or morning on a business day (I believe the older inter-bank payments are settled in two batches per business day).
  - tom_mellior 7y ago
    There is certainly no technical reason for the delay, a transfer should just be a transfer of a few bytes of information. I think the usual explanation is that this system gives banks a pool of money that they are always free to invest in the time that it's neither in the original owner's nor the recipient's account.
- buboard 7y ago
  i mean that bitcoin has de facto become a store of cash rather than cash at hand. It's indeed not like a bank since there are no chargebacks, no insurance nothing. It's different. But there are also multiple solutions to the speed issue, so speed is not really what s holding back widespread adoption. SEPA is bank transfers with delays of entire days - that makes them completely unfit for micropayments.
  - Scarblac 7y ago
    For much of Europe, SEPA transfers are already as good as instantaneous and I think the other countries will follow.
- zAy0LfpBZLC8mAC 7y ago
  That's sort-of not true anymore, SCT Inst is a thing and allows transfers between participating banks within seconds around the clock, every day of the year. It's just that some banks don't seem to see the need, and some think it's somehow a premium feature that you can charge for, some even multiple EUR per transaction (outbound, I don't think anyone charges extra for receiving SCT Inst transfers). But then, many banks seem to understand that that is bullshit and offer it at the same price as regular transfers, which for many banks means free of charge for non-businesses. I can only hope the former will notice that offering ancient technology is not a good way to keep customers.
- pmarreck 7y ago
  > It's just tedious, and the money takes two to three days to arrive So then it's not free. Instead of charging you a transaction fee, they charge you "time", since time is money, and they can make money off the in-flight money (via interest, ostensibly).
kalleboo 7y ago
In some countries, it is common to make even tiny payments (down to 10 cents) directly between bank accounts, instantly, for free. https://en.wikipedia.org/wiki/Swish_(payment) https://en.wikipedia.org/wiki/Swish_(payment)
- buboard 7y ago
  it's not cash though (and not global). the promise of cryptocs is that we 're getting back the versatility and anonymity that we had with physical cash
- chabes 7y ago
  What about people without bank accounts?
  - Scarblac 7y ago
    I don't actually know if that is feasible in, say, the Netherlands. I've never heard of paying taxes cash, for instance. And jobs pay wages to bank accounts.
  - coldtea 7y ago
    Those people are usually not the demographic artists and content creators promoting micropayments have in mind in the first place...
  - kalleboo 7y ago
    Why would someone not have a bank account? Having a large unbanked population seems like one of those U.S.-centric problems which is rooted in something deeper.
- tom_mellior 7y ago
  > some countries The Wikipedia page says "Area served: Sweden" and points out that even Norway and Denmark use similar systems. So this is quite limited. But sure, would be good to have something like this globally.
  - 7y ago
ryukafalz 7y ago
I've been interested in GNU Taler for that reason; it feels like it could be a useful tool for online payments while still being taxable. (Still feels pretty early in development though.)

pjc50 7y ago

I can't see how a system in which every node has a copy of every transaction forever could ever be suitable for micropayments, which if they took off would be of the order of millions a day.

tom_mellior 7y ago
You're assuming that no innovation is possible in this space. Besides, "every node" is not true of Bitcoin even today. Neither my desktop nor my mobile Bitcoin client save a complete history. Miners need history, but maybe there can be a different model of mining. I'm not a customer at all the credit card companies out there, only one. Maybe I could also be only be a customer of only one fixed "miner" in some future system? Possibly a new but fixed one I can pick per transaction, rather than today's essentially random assignment of who gets my fees? Yes, this wouldn't be Bitcoin anymore, but as I wrote above, I don't think Bitcoin is what we need anyway.
- wruza 7y ago
  >Miners need history I’m pretty sure that last time I repaired an ASIC it had just one crappy 256MB sd card (which was the reason it needed a repair). Maybe pool coordinators still need history, idk.
gwern 7y ago
You don't need a copy of every transaction forever. Look at MimbleWimble.

zozbot234 7y ago

> Unfortunately Bitcoin's huge transaction fees and still unreliable service made that impossible The cost of crypto transactions has always been known, it just used to be paid for by the userbase as a whole when the block reward was more substantial, whereas right now the user pays for their own transactions. I actually think the Lightning network is a semi-viable solution, it essentially overlays a "credits" system onto the original network that's especially appropriate for micro-transactions.

kylebenzle 7y ago
The Lightning Network was actually vaporware from day one that still makes absolutely no sense without first increasing the block size (something Bitcoin Core refuses to do). Bitcoin Cash is the Bitcoin and micropayment solution you are looking for.

DennisP 7y ago

The second-largest cryptocurrency is about a year away from a sharding system that multiplies scale by a factor of 512, with room to grow as hardware improves. That's for purely on-chain transactions. There's also a partly-offchain solution called "zkrollups" that uses zero-knowledge proofs to reduce the storage for a simple value transfer to 11 bytes, without introducing any unpleasant security assumptions like requiring the user to be online to receive payment or prevent cheating. Combining that with sharding gets to about a quarter million tx/sec. If that's not sufficient for micropayments, it's fairly straightforward to extend zkrollups to make payments probabilistic: e.g. to pay one penny, send a 1% chance of paying a dollar. There are some potential doublespending issues here but for voluntary tips that's not a problem.

cnasc 7y ago

I work at a startup trying to do this (Ethereum rather than Bitcoin): https://unlock-protocol.com/about/ https://unlock-protocol.com/about/ Transaction fees are there, but don't have to be enormous. Our code can also optimistically unlock the page under the assumption that pending transactions will eventually go through, so block time is also less of a concern. Right now the tricky thing is that it requires a browser extension if you want to transact directly with crypto (or use one of the few browsers that come with a built-in web3 wallet). We also have a managed crypto wallet service that allows people to pay with credit cards, but it isn't widespread because it can only be used to buy keys for locks we have approved.

cft 7y ago

Not only transaction fees, but IRS decision to tax it as property

teh_infallible 7y ago

Bitcoin Cash solved those problems and works flawlessly today.