Micropayments: Bringing Cryptocurrencies Into Everyday Life
The following post about micropayments was written by Dmytro Spilka. He is the CEO at Solvid and founder of Pridicto, a web analytics startup that uses AI and Machine Learning to forecast web traffic, monitor vital metrics, and set visual traffic aims.
Cryptocurrencies may have assumed the role of the quintessential water cooler topic over recent years, but there’s something stopping it from making that vital transition from being well talked about to well invested.
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To say the likes of Bitcoin isn’t well invested may seem churlish, considering the crypto-giant hit a value of $19,783 in 2017, but this wasn’t the intention of its creator, Satoshi Nakamoto.
Nakamoto’s dream was to create an alternative currency that was capable of superseding our existing monetary systems. For the dream to become a reality, cryptocurrencies would need to be accessible and usable for citizens around the world in their daily lives. For all of Bitcoin’s progress and toil, there’s still a sizable gap between its utilization for
investors and that of the wider public. However, there are a number of cryptocurrency organizations that are intent on bridging this gap, and some have highlighted micropayments as the cornerstone in bringing widespread accessibility for digital wallets.
But can micropayments really make a difference in enabling cryptocurrency adopters? Is it capable of delivering significant growth to the crypto-market? And is a future where crypto-transactions become daily practice just around the corner?
Cryptocurrencies are well suited for micropayments. The utilization of eWallets is ideal for customers who don’t want to suffer the rigmarole of submitting their credit card information for each small-scale transaction they perform.
Shoppers that hand over credit card information to outlets while making small purchases feel increasingly uneasy with the process. Ewallets, however, simply requires users to login and choose which payment method they would like to use.
Given the widespread perception that cryptocurrencies are a complex subject matter, it’s refreshing to see organisations rally to create manageable platforms for adopters of digital finance.
Writing on Medium, Brad Nickel of Gobyte explains that “the ultimate goal is to make using crypto easier and better for merchants and consumers in everyday life, offering instant, secure and reliable payment solution”. Cryptocurrencies are being adapted for use in day-to-day life, be it shopping online or buying a coffee from a vending machine.
Recently, a global vending controller, Ivend, have integrated crypto payment solution with their vending machines, allowing consumers to purchase coffee with cryptocurrencies.
Another off-putting factor behind traditional methods of conducting micropayments is the processing fees associated. In some cases, these costs are so high that merchants fail to see any profits from enabling low-cost transactions to occur.
But thanks to the deregulated nature of cryptocurrencies, this problem could be consigned to the history books. While some crypto-payments incur relatively high processing fees (Monero averages $2.60, while Bitcoin is closer to $1.20), digital currencies like TRON and Ripple carry costs of less than a fraction of a cent, on average, per transaction made.
One currency that’s making strides in dragging decentralized micropayments at a fraction of the cost from the realm of pipe-dreams to reality is Bitcoin Cash (BCH). Ensuring stability with a known fixed supply of 21 million BCH, Bitcoin Cash alleviates the burden of credit card fees, and many accepting merchants offer discounts to users paying using the cryptocurrency, thanks to the tiny costs associated with accepting transactions using this method regardless of size.
The network fee for a typical Bitcoin Cash transaction is typically less than one penny – illustrating that the currency can be a driving force in enabling miniature transactions on a large scale, and encouraging widespread adoption.
This could hold the key for more businesses to embrace microtransactions via cryptocurrencies while also encouraging customers to adopt the alternative payment methods to use ahead of their existing forms of finance.
The convenient thing about cryptocurrencies is how easily they can be scaled. For all the financial might of Bitcoin, it can easily be converted down into a lower denomination (called Satoshi), that holds a fraction of the value – making it ideal for pricing up microtransactions.
The potential that crypto-transactions hold for the media industry is huge. Since the all-encompassing power of the internet was laid out for print-based outlets to see, many organizations faced a struggle in monetizing their content for modern audiences without suffering from a loss of customers.
A key burden facing print media is the fact that information is available quicker for cheaper elsewhere. Some newspapers have chosen to build a paywall online while others have opted to shift their attention towards more celebrity-based content in a bid maintain higher website traffic.
Cryptocurrencies Hold the Solution
Fundamentally, print media is at a crossroads,but cryptocurrencies could hold the solution. By leveraging micropayments, news organizations could charge readers tiny fees for each piece of content that they read. The cost wouldn’t be interpreted as burdensome by the consumer but could make a massive collective contribution to the performance of media outlets worldwide.
The same notion could apply to modern content creators and even crowdfunding. Making micropayments through an old-fashioned credit/debit card process is clunky and relatively unsafe, but cryptocurrencies offering much more flexible pricing, convenience and security through blockchain could prompt a brand new movement in how startups and entertainment can be funded.
Bitcoin’s explosion onto the front pages of the world’s newspapers gave the world an early taste of the seismic power of cryptocurrencies. It also inspired thousands of startups to explore how to pull crypto out of the clouds and bring them into everyday real life. Leveraging microtransactions may be the first step in bringing an essence of ordinary life into an extraordinary realm of finance.
What do you think the future of micropayments hold? Will micropayments dominate? Will bitcoin cash or another cryptocurrency reign supreme in the realm of microtransactions?
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