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As sometime who has worked full time on this for over 5 years now, I have found a few aspects of your answer: The technical challenges of doing it with credit

As sometime who has worked full time on this for over 5 years now, I have found a few aspects of your answer: The technical challenges of doing it with credit cards are overwhelming (in CC parlance, a "microtransaction" is anything under $10) due to fee structure. You can simplify this by using a different payment rail (in my case, Lightning over Bitcoin), but now you have a different problem: nobody has Bitcoin. You also need to add the lack of convincing incentive: since microtransactions don't yet exist, there's no proof that that's a market for them. That leap of faith is a significant barrier.

37ef_ced3 6y ago
Obviously you are aware of this, but here is a concrete example of micropayments in practice: When I use (for example) Vultr cloud compute (https://www.vultr.com/ https://www.vultr.com/), I load my Vultr account with $10 via credit card. Once the money enters the account it remains there until it is spent Then I pay 1 or 2 cents each hour for a cloud instance. At the end of each month, Vultr tells we what's due if I exceed what remains in the account. If necessary I load more money in This kind of simple micropayment scheme (with a trusted entity holding upfront credit card payments) is widely implemented If you are willing to trust an intermediary (and most people are) then distributed ledgers (blockchains) are unnecessary The benefit of Bitcoin (or blockchains generally) is that you don't need to trust anyone. In 2009 this was considered important, but today, does anyone care? No
- oarsinsync 6y ago
  The example given (Vultr) is equivalent to a Starbucks card. You’re prepaying a company for a service. The transaction is the prepayment. How you use that balance is now irrelevant. Micro transactions to a range of different independent businesses requires using existing payment networks (visa / MasterCard / etc: relatively expensive; crypto: lack of widespread adoption) or building a new payment network. > If you are willing to trust an intermediary (and most people are) We already do. It’s called the bank. We also have regulation that helps. How many people keep real money in their personal PayPal accounts? How many people can even afford to? EDIT: I retract my Vultr / Starbucks equivalence. > At the end of each month, Vultr tells we what's due if I exceed what remains in the account. If necessary I load more money in Starbucks will not let your spend exceed your deposits on your card. Your statement suggests Vultr will. Credit accounts are a whole other risk. What happens if you don’t pay off your balance after you’ve already consumed the service?
  - 37ef_ced3 6y ago
    Yes, Vultr allows you to exceed the loaded amount The difference is due at the end of the month. If I didn't pay, they would simply charge the last credit card I used to load the account (I suppose) Another example: Linode (https://www.linode.com/ https://www.linode.com/) charges my credit card at the end of each month, to cover my usage. So a $5 cloud instance isn't paid for until the month ends. The point is to aggregate a whole month of spending into a single credit card payment
- herbst 6y ago
  > The benefit of Bitcoin (or blockchains generally) is that you don't need to trust anyone. In 2009 this was considered important, but today, does anyone care? I dont see how this is any less relevant today than it was 12 years ago.
harry8 6y ago
>due to fee structure Why is a little bit of data exchange so expensive? (Ok because they can, so why aren't the competitors to drive that fee structure down? What's the barrier to entry?)
- kylebenzle 6y ago
  The company Blockstream hijacked the Bitcoin Core GitHub a few years ago and artificially limited the block size to try and increase fees and push people to their second layer products. Any real users and devs moved to other project like Ethereum and Bitcoin Cash, now only trolls and bag holders keep pushing BTC as a "store of value", a totally meaningless concept.
kylebenzle 6y ago
Lightning over Bitcoin? This can't be serious, can it? LN is vaporware from day one. It serves no purpose because it is essentially centralizing a decentralized service. And when it still cost $5-10 to send BTC to a LN node, you are no better off than credit card fees. Hilariously BTC had this problem solved from day one, then Blockstream hijacked the GitHub repo, kicked out all the original devs and artificially limited the block size to try and push people onto their own "second layer" products. Why anyone would use LN rather than just real Bitcoin (now called Bitcoin Cash) is beyond me. They have lots of trolls (Adam Back) and social engineers (Greg Maxwell) pushing a false narrative but how real people fall for it is still just bizarre.
- willmadden 6y ago
  My take is that Lightning was a stalling tactic so that the original community would give up and fragment into other cryptos, destroying the growing network effect. It seems to have worked.
- ZeroSync 6y ago
  Bitcoin cash? You sound clownish. Wake up and stop drinking the kool-aid buddy. Nobody goes near that scam fest, sorry.
willmadden 6y ago
>You can simplify this by using a different payment rail (in my case, Lightning over Bitcoin), but now you have a different problem: nobody has Bitcoin. The problem is that Lightning essentially is a subscription service. The user has to lock much more Bitcoin in a channel in order use Lightning for micro transactions, which defeats the purpose. The minimum fee to get a Bitcoin transaction confirmed in a reasonable amount of time is often over $20 USD at this point. That's a very large deposit for a $20 fee to be worth the effort. They could deposit a smaller amount of Bitcoin in a custodial wallet, but at that point you might as well use a credit card or Paypal. It defeats the underlying appeal of Bitcoin, which is controlling your own money. More people would have, and more importantly use, Bitcoin if it was allowed to scale on-chain. Why that hasn't happened yet is a different rabbit hole.
- herbst 6y ago
  I realize the issue is even less people having it. But there are chains like Tron that have the fee issue basically solved.
  - willmadden 6y ago
    That's a non-sequitur. The "fee issue" was caused by a group of shady developers and hacks that hijacked the Bitcoin repository and rate limited it. When the community protested, they were censored and banned from the online forums.
- EVa5I7bHFq9mnYK 6y ago
  "often over $20" is a lie. Fee for the priority transaction (to skip the queue) is $7 right now. It rarely exceeds that amount. You don't usually need a priority transaction when funding LN channel, so ~$1 fee will be enough.
  - willmadden 6y ago
    I literally transact almost every day. To give you an example, the withdraw fee for BTC on Kraken is 0.0005 BTC, which is currently about 17.50 USD. Here is the current mempool: https://jochen-hoenicke.de/queue/#0,24h https://jochen-hoenicke.de/queue/#0,24h To get your transaction confirmed in the next few blocks, you have to be in the "yellow" of the chart, and use a fee of around 120 satoshi's per byte. The average transaction is around 200 bytes, so you need to pay 24000 satoshis, which is 0.00024 BTC. That's 8.40 USD right now. The problem is that it's a double blind auction, so to have a very high likelihood of getting into the next block, you often have to pay 200-400 satoshi's per byte, which puts you right up at the $20 level. If your transaction is larger, it can be significantly more. Also, if the mempool gets even more backed up than it is right now, the fees can literally go as high as people are willing to pay when fighting over the restricted block space. >You don't usually need a priority transaction when funding LN channel, so ~$1 fee will be enough. If you try sending a Bitcoin transaction with a $1 fee right now it may not confirm for days and might confirm at all! That isn't a user experience that's going to create mass adoption. It needs to be an improvement on the existing options. How, exactly, is my statement that the fees are often over $20 a lie? You should stop accusing people of being liars without data to back it up. This forum is supposed to be for intelligent discussion, not trolling. This isn't twitter.
hakfoo 6y ago
Micro-transactions require micro-products, and those are a hard sell. Compare a tangible market situation: remember the old Bazooka gum that used to say "3 cents" on each piece? Few customers are going to walk into a store and buy a single piece, no matter how cheap and frictionless payment is. At that level, the burden of thinking "I have to actually go and buy it" exceeds both the financial cost and likely the perceived upside of a single bite of gum. You can successfully sell a handful alongside another transaction, or a bag of them for a dollar, though, because you've raised the stakes of the total transaction high enough that it's worth thinking it through. Maybe the classic micropayment story-- the individual news article/video view/song play-- is a single piece of Bazooka. Since it's likely to be ephemeral and competing with a nearly-as-good free alternative (the same content on an ad-based site), you don't have much room to make the case that it's worth going through a purchase process.
- Grustaf 6y ago
  I guess this is obvious, but youtube videos and online articles are micro-products. It would be trivial to charge people 10 cents an article if people felt it would work. You would browse youtube as usual, no technical need for any extra friction at all. At most there might be a legal requirement to remind you that you will be charged. The challenge is probably mostly that a lot of publishers would need to get together and create a unified account that could be charged.

37ef_ced3 6y ago

Obviously you are aware of this, but here is a concrete example of micropayments in practice: When I use (for example) Vultr cloud compute (https://www.vultr.com/ https://www.vultr.com/), I load my Vultr account with $10 via credit card. Once the money enters the account it remains there until it is spent Then I pay 1 or 2 cents each hour for a cloud instance. At the end of each month, Vultr tells we what's due if I exceed what remains in the account. If necessary I load more money in This kind of simple micropayment scheme (with a trusted entity holding upfront credit card payments) is widely implemented If you are willing to trust an intermediary (and most people are) then distributed ledgers (blockchains) are unnecessary The benefit of Bitcoin (or blockchains generally) is that you don't need to trust anyone. In 2009 this was considered important, but today, does anyone care? No

oarsinsync 6y ago
The example given (Vultr) is equivalent to a Starbucks card. You’re prepaying a company for a service. The transaction is the prepayment. How you use that balance is now irrelevant. Micro transactions to a range of different independent businesses requires using existing payment networks (visa / MasterCard / etc: relatively expensive; crypto: lack of widespread adoption) or building a new payment network. > If you are willing to trust an intermediary (and most people are) We already do. It’s called the bank. We also have regulation that helps. How many people keep real money in their personal PayPal accounts? How many people can even afford to? EDIT: I retract my Vultr / Starbucks equivalence. > At the end of each month, Vultr tells we what's due if I exceed what remains in the account. If necessary I load more money in Starbucks will not let your spend exceed your deposits on your card. Your statement suggests Vultr will. Credit accounts are a whole other risk. What happens if you don’t pay off your balance after you’ve already consumed the service?
- 37ef_ced3 6y ago
  Yes, Vultr allows you to exceed the loaded amount The difference is due at the end of the month. If I didn't pay, they would simply charge the last credit card I used to load the account (I suppose) Another example: Linode (https://www.linode.com/ https://www.linode.com/) charges my credit card at the end of each month, to cover my usage. So a $5 cloud instance isn't paid for until the month ends. The point is to aggregate a whole month of spending into a single credit card payment
herbst 6y ago
> The benefit of Bitcoin (or blockchains generally) is that you don't need to trust anyone. In 2009 this was considered important, but today, does anyone care? I dont see how this is any less relevant today than it was 12 years ago.

harry8 6y ago

>due to fee structure Why is a little bit of data exchange so expensive? (Ok because they can, so why aren't the competitors to drive that fee structure down? What's the barrier to entry?)

kylebenzle 6y ago
The company Blockstream hijacked the Bitcoin Core GitHub a few years ago and artificially limited the block size to try and increase fees and push people to their second layer products. Any real users and devs moved to other project like Ethereum and Bitcoin Cash, now only trolls and bag holders keep pushing BTC as a "store of value", a totally meaningless concept.

kylebenzle 6y ago

Lightning over Bitcoin? This can't be serious, can it? LN is vaporware from day one. It serves no purpose because it is essentially centralizing a decentralized service. And when it still cost $5-10 to send BTC to a LN node, you are no better off than credit card fees. Hilariously BTC had this problem solved from day one, then Blockstream hijacked the GitHub repo, kicked out all the original devs and artificially limited the block size to try and push people onto their own "second layer" products. Why anyone would use LN rather than just real Bitcoin (now called Bitcoin Cash) is beyond me. They have lots of trolls (Adam Back) and social engineers (Greg Maxwell) pushing a false narrative but how real people fall for it is still just bizarre.

willmadden 6y ago
My take is that Lightning was a stalling tactic so that the original community would give up and fragment into other cryptos, destroying the growing network effect. It seems to have worked.
ZeroSync 6y ago
Bitcoin cash? You sound clownish. Wake up and stop drinking the kool-aid buddy. Nobody goes near that scam fest, sorry.

willmadden 6y ago

>You can simplify this by using a different payment rail (in my case, Lightning over Bitcoin), but now you have a different problem: nobody has Bitcoin. The problem is that Lightning essentially is a subscription service. The user has to lock much more Bitcoin in a channel in order use Lightning for micro transactions, which defeats the purpose. The minimum fee to get a Bitcoin transaction confirmed in a reasonable amount of time is often over $20 USD at this point. That's a very large deposit for a $20 fee to be worth the effort. They could deposit a smaller amount of Bitcoin in a custodial wallet, but at that point you might as well use a credit card or Paypal. It defeats the underlying appeal of Bitcoin, which is controlling your own money. More people would have, and more importantly use, Bitcoin if it was allowed to scale on-chain. Why that hasn't happened yet is a different rabbit hole.

herbst 6y ago
I realize the issue is even less people having it. But there are chains like Tron that have the fee issue basically solved.
- willmadden 6y ago
  That's a non-sequitur. The "fee issue" was caused by a group of shady developers and hacks that hijacked the Bitcoin repository and rate limited it. When the community protested, they were censored and banned from the online forums.
EVa5I7bHFq9mnYK 6y ago
"often over $20" is a lie. Fee for the priority transaction (to skip the queue) is $7 right now. It rarely exceeds that amount. You don't usually need a priority transaction when funding LN channel, so ~$1 fee will be enough.
- willmadden 6y ago
  I literally transact almost every day. To give you an example, the withdraw fee for BTC on Kraken is 0.0005 BTC, which is currently about 17.50 USD. Here is the current mempool: https://jochen-hoenicke.de/queue/#0,24h https://jochen-hoenicke.de/queue/#0,24h To get your transaction confirmed in the next few blocks, you have to be in the "yellow" of the chart, and use a fee of around 120 satoshi's per byte. The average transaction is around 200 bytes, so you need to pay 24000 satoshis, which is 0.00024 BTC. That's 8.40 USD right now. The problem is that it's a double blind auction, so to have a very high likelihood of getting into the next block, you often have to pay 200-400 satoshi's per byte, which puts you right up at the $20 level. If your transaction is larger, it can be significantly more. Also, if the mempool gets even more backed up than it is right now, the fees can literally go as high as people are willing to pay when fighting over the restricted block space. >You don't usually need a priority transaction when funding LN channel, so ~$1 fee will be enough. If you try sending a Bitcoin transaction with a $1 fee right now it may not confirm for days and might confirm at all! That isn't a user experience that's going to create mass adoption. It needs to be an improvement on the existing options. How, exactly, is my statement that the fees are often over $20 a lie? You should stop accusing people of being liars without data to back it up. This forum is supposed to be for intelligent discussion, not trolling. This isn't twitter.

hakfoo 6y ago

Micro-transactions require micro-products, and those are a hard sell. Compare a tangible market situation: remember the old Bazooka gum that used to say "3 cents" on each piece? Few customers are going to walk into a store and buy a single piece, no matter how cheap and frictionless payment is. At that level, the burden of thinking "I have to actually go and buy it" exceeds both the financial cost and likely the perceived upside of a single bite of gum. You can successfully sell a handful alongside another transaction, or a bag of them for a dollar, though, because you've raised the stakes of the total transaction high enough that it's worth thinking it through. Maybe the classic micropayment story-- the individual news article/video view/song play-- is a single piece of Bazooka. Since it's likely to be ephemeral and competing with a nearly-as-good free alternative (the same content on an ad-based site), you don't have much room to make the case that it's worth going through a purchase process.

Grustaf 6y ago
I guess this is obvious, but youtube videos and online articles are micro-products. It would be trivial to charge people 10 cents an article if people felt it would work. You would browse youtube as usual, no technical need for any extra friction at all. At most there might be a legal requirement to remind you that you will be charged. The challenge is probably mostly that a lot of publishers would need to get together and create a unified account that could be charged.