BitWall Allows Publishers To Make Money Through Bitcoin Micropayments | Hacker News Reader

BitWall Allows Publishers To Make Money Through Bitcoin Micropayments

techcrunch.com

44 pointssahlhoff16 comments

I really wish articles would stop repeating the blanket claim that Bitcoin payments have lower fees than traditional transactions. While true in many cases, it is definitely not true with regard to micropayments. At the protocol level, Bitcoin is horrible for micropayments.

Don't get me wrong, Bitcoin is great for some things like moderately-sized international payments, but is not designed for frequent small payments. The recommended fees are already too high for this to be practical. And if such small payments become common, they would flood the blockchain, driving fees up further as a result. If you want to see how this has played out before, look at Satoshi Dice.

How does BitWall address this problem?

I wonder how feasible it is to do batch payments for Bitcoin or even credit card. Apple seems to do this successfully with its iTunes store (a typical micropayment use case) by charging credit cards in batches of $20 to $50 over a certain period.

If there's a payment aggregator doing this for a number of micropayment merchants, I can see some future in this. However, Bitcoin protocol is not compatible with polling transactions retrospectively, so that requires either a "credit" account or a small deposit to start with.

Did I miss something? BitWall sits on top of Coinbase. Coinbase right now eats transaction fees (or if it is Coinbase 2 Coinbase, then it's just an "in the network" transaction that possibly does not need to hit the bitcoin network and incur a transaction fee).

Satoshi Dice is an example of how not to do volume micropayments because you incurr transaction fees. If you want to do micropayments the right way, either you need to sit on top of someone else's payment network, or build your own.

The biggest fees right now are the hassles of opening and waiting for an exchange account, and the associated exchange fees associated with converting $ to bitcoin, and bitcoin to $. With something like BitWall, you can start accepting and spending bitcoin without the hassles of dealing with an exchange.

jyu, thanks for providing clarity there. I'm the CEO of BitWall, and to reiterate what you said - transactions from readers to merchants on BitWall are off blockchain (i.e. in-network), meaning we can power them with 0 transaction fees because of our integration with Coinbase.

What coinbase has implemented is not off-the block-chain microtransactions. Basically, they are just moving money between two coinbase accounts. So looks like only Coinbase users can use your service, if others use it they will end up flooding the block-chain.

Depends on what you define as 'small'. The smallest amount you can send (right now) is about $0.007 at current prices, which is pretty small for most purposes, especially content monetization. It is smaller than any alternatives by a large margin.

You missed the point. Yes you can receive many small payments, but to spend them again will cost me almost as much again in fees. Combining lots of small inputs is not efficient.

Why not? A single transaction can have many different inputs. A receiver of many micropayments can bundle many separate addresses into one.

Anonymity might be an issue then, but the transaction isn't.

Because each input increases the size of the transaction, increasing the fees: https://en.bitcoin.it/wiki/Transaction_fees

The fees to transfer bitcoin are nothing compared to the fees to get bitcoin. You need to be really savvy and find a local trader or else you are paying funding fees, trading fees and withdraw fees.

Even on localbitcoin prices are usually marked up above the current exchange rate over multiple points of exchange.

The biggest advantage to bitcoin is painless refunds, and of course no central authority to regulate anything.

How micro are we talking about here? The default transaction fee is 0.0001 BTC per kilobyte, or about 1 cent, and it's usually the amount you need to pay. Hardly the expensive transaction. Yes, handing someone some cash is cheaper, but the fees, at least as they are now, is nothing to complain about.

The law requires the first HN comment to be negative. Here goes.

BitWall is on my radar because my long-term startup project is, indirectly, a competitor.

Paywalls are tricky because they only work for a handful of sites. My expectation is that they don't work for the long tail; but it's the long tail where almost every website lives. In practice, use of paywalls shapes up to be a niche business model.

So when you multiply one niche (paywalls) by another niche (bitcoin), I can only suspect that they will be in for a hard ride. Especially since nothing stops the other white-label paywall platforms from adding bitcoin to their currency roster.

Considering bitpay is only charging .99% fee (or no fee to be paid out in coins) you could easily add it to whatever you're doing especially since they have no monthly minimums or other costs, or just roll your own solution easily.

Also, why is there no concrete information on their site (bitwall) on what fees they charge forcing you to contact sales. Arrgh

I think the low percentage is attractive, but I disagree with "you could easily add it". It will be strongly contingent on each publication's technical environment.

The challenge in using Bitpay is that you have to then source the Bitcoin from somewhere else. Because this is on Coinbase, you at least stay with one money vendor.

dobbsbob, we are planning on using a subscription model but are still doing market research to figure out the right price point. It's still early, but we'll try to get that posted ASAP. In the meantime we are offering the service for free.

Reply on news.ycombinator.com