My understanding (possibly mistaken - I've only been casually watching from the sidelines) is bitcoin (and at least most other blockchain currencies) suffers a similar problem to credit/debit cards, in that there is effort involved in validating/recording the transaction and that work needs to be compensated, and therefore there are transaction fees that are effectively independent of the value transferred, therefore microtransactions are disproportionately penalized by this necessity.

Especially with KYC/AML laws being necessary to run a legitimate financial exchange, there really is no getting around a certain cost-per-transaction and even in a best-case scenario that hits microtransactions "equally" as hard as "macrotransactions" which proportionally penalizes microtransactions.

To minimize the proportion of that going to transaction fees, you're better off making fewer transactions which then manifests as something like a monthly subscription instead of "I'll just transact ten cents to you per action".

The Lightning Network is a layer on top of Bitcoin, which allows users to aggregate a huge number of transactions into a payment channel that’s tracked off-ledger. The only transactions that need to be settled on the base layer (broadcast to the public Bitcoin blockchain) are channel open and close events.

There are already APIs protected by an L402 paywall that charges tiny fractions of a cent for access to protected resources.

http://l402.tech

> Decentralized micro-transactions would have been cool had they been used with a decent friendly UI and been integrated into a browser or two as an extension.

My position on cryptocurrency as well. I think that the ability to send money in this decentralized manner is fascinating. It's too bad it went far, far beyond that. Cryptocurrency should have never tried to replace normal currency, or any of that NFT bs.

Blockchain isn't really the solution there, though.

I don't want a public ledger with all my payments, which tells not only what I consume, but also how much I am able/willing to spend.

And as soon as you are in massmarket you need ways for humans to intervene, for handling complaints, mistakes, whatever or dealing with the unavoidable case that individuals lose their secret keys. Or even cases like medical restriction or inheritance requiring others to take over the funds.

All those things Blockchain purposely and inherently prevents.

You can just send a transaction from your exchange.

Like, let's say I want to send you $0.10 right now. I would just go into Robinhood and send 0.1 USDC to you on Polygon or Solana, that would arrive in your wallet instantly from a Robinhood-owned address, you would have no idea who I am or my previous transaction history. Robinhood also owns the private keys and account recovery process here - it's just using blockchain as the payment rail.

Go ahead and post your address and I'll send you $0.10.

Okay, so the solution is to use a bank, not Blockchain money.

But you can't send $0.01 instantly and anonymously with bank rails. The solution is to use a crypto exchange on crypto rails - just not a regular crypto wallet (you could, but perhaps not very user friendly)

Isn't that just turning the exchanges into unregulated banks?

Many exchanges are regulated, but maybe not as banks. But yes you're trusting that exchange with your money. If used for web-micropayments it shouldn't be much of an issue though.

>It's unfortunate that bitcoin became a hoarding/speculation thing, rather than a useful thing.

Brave tried to do this with their Basic Attention Token, but they seem to be focused on adding generalized crypto features like wallets rather than developing how it could work better.

> It's unfortunate that bitcoin became a hoarding/speculation thing

It's a natural consequence of its deflationary design, which encourages hoarding. Use as a currency would have benefitted from an alternate pure linear emission, with no reward halvings, where it would take 100 years to get supply inflation down to 1%. That would also leave later generations their fair share of supply.