There is a nice article which hopefully somebody can link that explains that visa was a success because merchants reduced their costs, too. They had to do informal credit accounting for all their clients who only paid for the purchased goods once a month. With visa, that accounting position, which could be a full-time employee, wasn't needed any more. Furthermore, they reduced their risk of clients defaulting on those micro loans.
There is also a time savings. You don’t need employees counting and recounting the cash with witnesses when the cashier changes.
Cash needs to be physically secured. A cash register full of credit card receipts is pretty worthless.
You're right about crypto not being a magic bullet though.
I'd suspect each BTC payment is actually $60-70. When block rewards end, someone's gonna have to pay that.
Ignoring the fact that's going to occur in 2140, what you've stated is simply not true, users decide what fees to pay, no one else determines the price.
I send zero fee tx's regularly. If you are in no rush the cost ranges from tiny to non-existent sending money across the planet.
It's never going to be used for micro transactions without a second layer but the whole premise of this comment is out of whack with the reality.
The actual cost of a transaction can be represented as the following equilibrium:
(E * pkWh) = F + (R * pBTC)
- E is the average amount of power required to process one transaction, a function of hash rate (~700kWh)
- pkWh is the average price paid by miners for power (~0.08 $/kWh)
- F is the average fee paid for a transaction directly (~5)
- R is the average block reward per transaction (6.25/3500)
- pBTC is the market price of a Bitcoin (~9500)
If (F + (R * pBTC)) is ever less than (E * pkWh) as happened after the halving, something's gotta give. Either the fee has to go up, the price of a Bitcoin has to go up, or the hash rate will drop. The halving demonstrated (3).
Make no mistake, though, the cost of a bitcoin payment is ~$50, you just have to distribute it over the parameters.
You didn't think miners were given you "almost free" transactions for their health or something did you? Your very-low transaction fee is the tip of a giant cost-burg.
The only way it doesn't waste inordinate amounts of power and support a reasonable number of transactions is if you pretend.
Waste? It's evidently not waste, because miners are compensated. Missed opportunities for that energy to have done work on something else, or at least done more efficiently so the surplus could do something else? Perhaps, but that can be said of anything. I'd instead criticize the far greater missed opportunities of not coating deserts with solar panels, not peppering the world with nuclear reactors, not having satellites beaming microwaves down, etc. etc. We'll never become a Type 1 civilization with attitudes suggesting we lower global energy consumption or try to allocate it only in approved ways.
Well, I mean, if you're trying to launder money or manage a ransomware product, PayPal and Visa aren't great candidates.
> Waste? It's evidently not waste, because miners are compensated.
People are compensated for all sorts of wasteful garbage. I could pay some dude to dump gasoline directly into the rain gutters. Or move a mountain 6 feet to the left using only a shovel. That doesn't instantly turn it into a productive activity.
> Missed opportunities for that energy to have done work on something else, or at least done more efficiently so the surplus could do something else? Perhaps, but that can be said of anything.
There's no massive energy surplus. If we turned off the 55TWh/yr that's being burned on multiplayer Excel, it would stop a non-trivial percentage of our greenhouse gas emissions.
> I'd instead criticize the far greater missed opportunities of not coating deserts with solar panels, not peppering the world with nuclear reactors, not having satellites beaming microwaves down, etc. etc.
Sure, I'm down. Sounds great!
> We'll never become a Type 1 civilization with attitudes suggesting we lower global energy consumption or try to allocate it only in approved ways.
Not with that attitude :)
To me, it's like there's a giant smoldering tire fire in the town square, and everyone's walking around praising the tire fire for the nice warm glow it creates.
Any delta is due to the 45% drop in hash rate after the halving. Extensive methodology is provided.
Yes, there is a risk of double-spending, but since this is a small amount, the cost of the attack may be higher than the benefit. The payment processor can also deploy more full nodes in different geographic locations to monitor and detect potential double-spending transactions in the transaction memory pool.
And then a million fraudulent microtransactions will add up. Of course, that would never happen in practice, because the Blockchain cannot handle a million transactions in any reasonable time frame.
If the attacker sends the legit transaction and double-spending one at the same time, it will be detected due to the few seconds wait by the payment processor.
and in fact it is quite common to accept "double-spending" since that is really the only way to increase fees to push through a "stuck" transaction. Otherwise you have to wait an indeterminate (potentially forever) period of time until it exits the mempool of all network participants
[1] https://bitcoin.stackexchange.com/questions/81624/can-two-or...
This page (https://github.com/ethereum/wiki/wiki/Design-Rationale) contains a good overview of the UTXO vs Account model with each's strengths and weaknesses.
It might be just out of my ignorance for what the downsides are, but quite often I do wish I had a way to make micropayments, and I feel like lots of others do feel similarly.
None of those get easier with micropayments. If anything they get more difficult.
That's right, it will all cost the same as a Bitcoin transaction.
And how about receiving a lightning payment? Well... The merchant need to have a balance so he can accept your payment(!) Yes, that's another Bitcoin transaction right there. Or if you're lucky you can find someone who'll give you liquidity (for a fee of course).
It's debatable if micropayments will ever take off, but lightning never will.
More likely users won't have to deal with all that because there will be micropayment wallet providers that can aggregate the transaction costs of buying bitcoin and maintain large value LN channels.
If such a hub does this too much then they'll have trouble getting others to commit funds to a channel to them.
And this is why most publishers will use subscriptions for their normal content, except some dubious ones who will use clickbait headlines to attract one-time buyers.
This is true of bitcoin. There are better cryptocurrencies which have already solved these problems completely. Have a taste on https://nanospeed.live/ to do a fee-less live transaction in milliseconds.
The only thing lacking with UPI is proper integration with merchants; large retailers rely on weird locked in services like PhonePe etc. for integration with their billing systems, but the rest seem to use a QR code and manual verification of payment.
My local grocery store (a small mom and pop operation) uses a QR code system with a speaker the recites out loud any new transaction so that both the merchant and the customer can verify it easily.
And besides, integration with merchants is not the job of UPI. It's the job of the application implementing UPI.
0-conf is also reasonably safe for small amounts. We must always remember that credit cards are perfectly acceptable, despite them only being "confirmed" after several months (so they cannot be reversed any longer).
Consider me one of the mythical latter people. I really really really want to support quality journalism, but I don't spend enough time on any one news site to justify a monthly subscription (most of which are fairly expensive). I would be totally fine spending sub-$1 per article read, though, if that were an option.
I understand why it is not an option, but that's not really the point. If it were, I'd do it. Hell, I'd pay 50c per article just to avoid the annoyance of finding a paywall workaround.
Sample size of one, but I do!
I frequently come across paywall'd articles I'd like to read. I'm not willing to add more subscriptions to my life, but it would be great if I could pay 25¢ just for access to the one article. If the payment process was easy, I'd use it a lot!
Of course, any reasonable solution would take, say, $10 from you, and allow you to just press "pay" anywhere a paywall is encountered. Of course it would just auto-pay for articles on sites you put in a whitelist, within a limit you set. All the clearing is done in non-micro amounts, say, monthly.
Such solutions do exist. The problem, of course, is the buy-in from site owners. I suspect that running better ads just has a higher ROI.
Many CCs are great for micropayments, its just bitcoin that sucks - it shouldn't be that popular.
and if you just leave one big channel with lots of money in it, then you end up with this fun situation! Hope you don't have a power outage... ever.
https://coinspice.io/news/bitcoiners-warn-after-user-documen...
BTW a follow-up to the story you link is this one: https://cointelegraph.com/news/guy-who-lost-4-bitcoin-has-re...
I don't think any of them make micro payments easy right now, but throughput is not a real problem until transaction volume goes WAY up.
What is bitcoin's throughput? 2MB every -10 minutes-? That's less than 3KB/s. Let's not do this whole dance where the real numbers never come up in all the fear mongering.
A single 10TB hard drive would take over -92 YEARS- to fill up at that rate. And again, most people don't ever need to sync with the chain, they let servers do it for them.
What is your point?
I've pointed out before that the enthusiasm for micropayments is from people who want to collect them, not those who want to pay them. Unlike credit cards, which, when introduced, were easy to sell to buyers but hard to sell to merchants, since the merchant pays fees.
Cryptocurrencies are not a magic bullet here. The technology for preventing double-spending is incredibly inefficient and slow. Transaction costs are high. Right now, a Bitcoin transaction costs at least US$5. It's been as high as $20.