Idea that just came to me to deal with the problem of micropayments

[starspirit]

We just need our own version of Lightning network for micropayments.

If the Bitcoin Lightning network is feasible, and allows full scalability of Bitcoin, what does that mean for the strategic positioning of the bitShares network in the market? Are the two networks mutually exclusive, or can they interact to leverage their relative strengths in different applications?

[arhag]

We just need our own version of Lightning network for micropayments.

[Permie]

Mr Jeans has just posted some data on 'the books' of bitshares and btc

https://docs.google.com/spreadsheets/d/1Tj8qlZNkjV37UEwhpOcDtixuJICVWGFLSIXCeECaGlw/edit?pli=1#gid=2138521667

https://docs.google.com/spreadsheets/d/1Zd8gyzZqWz1uSbj2kTmGHYj2pNYaSI7KNoEJzo_WQMg/edit?pli=1#gid=0

https://bitsharestalk.org/index.php/topic,17419.0/topicseen.html

My main findings:

BITCOIN
Annual share inflation (YTD):   10.52%
Earnings per share (EPS):   USD 0.12
Price/EPS (P/E ratio):   2158.5
Return on Equity:   0.046%
Operating expense ratio (expenses/earnings):   278.4


BITSHARES
Annual share inflation (annualized)   1.275%
Earnings per share (EPS):   USD 0.00004353
Price/EPS (P/E ratio):   154.6
Return on Equity   0.647%
Operating expense ratio (expenses/earnings)   13.9

This could be an interesting way for us to monitor Bitshares for profitability, and in the future an interesting way to compare DACs for investment purposes.

[Thom]

This infrastructure is very useful, but the only thing preventing micropayments are the fees.

More precisely, the only thing preventing micropayments is the cost of the payment network, which is probably higher than the fees you can collect for micropayments.

This is exactly why I wrote this in the Policies & Procedures index:

Now that I think about it, who has a handle on the pulse of the BitShares ecosystem? I mean, BM has used the comparative metaphor of a DAC or "company" to describe how PoW mining is far less efficient than DPoS, and often states ecosystems must be profitable to be self sustaining. Few here would disagree, but why has nobody asked to see "our books"? What are our actual costs? What are our expenses, both short term and long term?

Until these questions are answered we can't possibly determine if micropayments in BitShares is economically cost effective. It makes little sense to charge a $0.10 fee for an item that costs 25 cents. That's the same situation as the credit card processors face, which is why merchants have a minimum charge amount.

nonetheless, regardless of what i, or any of us, want, the market will figure out the best use for the network.

This is also very true, but why would we even propose something that's not economically close to viable, and how could we possibly determine that without accurate cost data, or, market analysis of the target audience and use cases?

TBH, I am very surprised whenever I hear someone propose a new DPoS chain, b/c of the "overhead" that implies. You need witnesses, VPS servers, coders, marketing etc. etc. just like BitShares has. How will all that be established? How long to get all that "alternate chain" infrastructure in place and functional?

Whenever such suggestions are made they never provide analysis of any of those important considerations.

[cylonmaker2053]

BTS doesn't have to handle micro payments to be an unimaginable success. all we need is one export/import industry to start using bitUSD or any of the other bitassets for currency hedging and we're talking about potentially billions added to our market value. now imagine if financial institutions started using bitassets to park capital, or if people in financial repressed countries started using bitassets to protect themselves from domestic political risk? we don't need to fight the micro payments battle alongside BTC or the other crypto currencies to be overwhelmingly successful in our core function of providing decentralized p2p asset exchanges.

There is very much a use case for the transaction load that BTS can handle and the micropayment applications that everyone is looking to make. View it in the sense of applications. This infrastructure is very useful, but the only thing preventing micropayments are the fees.

then maybe BTS isn't the best crypto for micro payments. that's fine...i'd rather the network handle multimillion dollar valued transactions from large banks or international trade firms.

nonetheless, regardless of what i, or any of us, want, the market will figure out the best use for the network.

[VoR0220]

BTS doesn't have to handle micro payments to be an unimaginable success. all we need is one export/import industry to start using bitUSD or any of the other bitassets for currency hedging and we're talking about potentially billions added to our market value. now imagine if financial institutions started using bitassets to park capital, or if people in financial repressed countries started using bitassets to protect themselves from domestic political risk? we don't need to fight the micro payments battle alongside BTC or the other crypto currencies to be overwhelmingly successful in our core function of providing decentralized p2p asset exchanges.

There is very much a use case for the transaction load that BTS can handle and the micropayment applications that everyone is looking to make. View it in the sense of applications. This infrastructure is very useful, but the only thing preventing micropayments are the fees.

[cylonmaker2053]

BTS doesn't have to handle micro payments to be an unimaginable success. all we need is one export/import industry to start using bitUSD or any of the other bitassets for currency hedging and we're talking about potentially billions added to our market value. now imagine if financial institutions started using bitassets to park capital, or if people in financial repressed countries started using bitassets to protect themselves from domestic political risk? we don't need to fight the micro payments battle alongside BTC or the other crypto currencies to be overwhelmingly successful in our core function of providing decentralized p2p asset exchanges.

[EstefanTT]

I agree that MPV is the number one priority.

When we'll have it out there, as amazing as we picture it in our dreams (no pressure BM ), then privacy and micro payments seems to me like one of the next obvious steps.

I'm far from beeing a smart blockchain mastermind, I really don't know how complexe it is to implement these features. I'm just giving my thoughts

That beeing said, I like to imagine myself paying for my coffee with BitEUR ...

[xeroc]

You're positive it requires $0.1 to pay for the cost of security per transaction? Interesting....

I'm not thinking so much tips so much as permanent streams of income in a micropayment channel. So large quantities of micropayments should equate to some decent amount of revenue.

No, I'm not positive!
But if there isnt such a high security cost, then there is surely nothing stopping a bts-parameter being changed to meet the demand for micro-tx. E.g

Code: [Select]

If tx < $5, then $0.01-fee
My assumption is that this isn't possible, otherwise micro-tx would be advertised as a feature of DPOS 2.0

I think what we need to know is if transaction-processing is an economy of scale?
Can transaction fees be lower (per-tx) if lots of them are bundled together and executed at the same time, as in a payment channel?

You need to distinguish the MVP (minimum viable product) that the devs are currently coding and that will be released as bts2.0
and the upcoming protocol updates that shareholders can vote on ..
aside from the parameters that can be defined by shareholders too ..

I do agree that micro-transactions is important .. now .. but I also see that the MVP should be most stable, usable, simple, and easy to sell as possible ..

[Permie]

You're positive it requires $0.1 to pay for the cost of security per transaction? Interesting....

I'm not thinking so much tips so much as permanent streams of income in a micropayment channel. So large quantities of micropayments should equate to some decent amount of revenue.

No, I'm not positive!
But if there isnt such a high security cost, then there is surely nothing stopping a bts-parameter being changed to meet the demand for micro-tx. E.g

Code: [Select]

If tx < $5, then $0.01-fee
My assumption is that this isn't possible, otherwise micro-tx would be advertised as a feature of DPOS 2.0

I think what we need to know is if transaction-processing is an economy of scale?
Can transaction fees be lower (per-tx) if lots of them are bundled together and executed at the same time, as in a payment channel?

[VoR0220]

Are you saying that CMX should issue and manage a more centralized microtx-chain?
The fees are of the order $0.1 to pay for the cost of security. The only way I can see to reduce this cost is to issue a centralized chain where fewer witnesses and hardware have to be compensated.
Stan and Dan have said they're not interested in issuing such things due to the regulatory burden.

Although it could be an improvement on Changetip, a opaque centralized database.

I've had other ideas on how to solve the problem of micro-tx

The only issue I have was that micro transactions are not ideal on bit shares at 0.20$ transaction fee.  :-(

BM has said that fees should reflect the value provided to the customer.

Fees need not necessarily be paid by the end-user, and the fee may not even necesarily need to be paid in transaction fees. Perhaps the social-media wallet-provider could front the fees to attract more customers, or the fees may be paid another way. Maybe tipping-users can have their fees paid for them if they advertise/tweet the tip to a threshold number of unique viewers.

Few minutes ago, I had amazing customer service on elegant theme`s forum.

I've got an idea:

I thought it would be cool if I could send a BitUSD micro payment to this guy to thank him. Just like with ChangeTip.

This guy would be probably happy to have free internet money and then he would be incentivized to go through the process to open a wallet. This wallet has this micropayment functionality and keeps track of the referrals the micropayment bring in.

This wallet would have to be great at inviting people with good copy and an easy sign up process. Then for a viral loop, it would invite the new user to start tipping other and participate in the profit sharing of the wallet. "When you tip and bring in new users, we reward you with x% of all their future transactions"

A smart contract with multisig between the wallet provider and the wallet referrer could split the referral rewards on a monthly basis with a pre-defined x% of it's referral transactions. Everytime someone sends a micropayment the wallet and it's the referrer earns.

The x% would be defined by what is needed for funding development while being high enough to incentivizing it's users to tip.

If such a feature existed in a wallet, a marketer could use this and build a business by signing up people by simply sending tips for good work on the internet. (Fiverr, Content, Youtube, twitter, reddit, email, etc)

Not sure how this could work, but here are my initial thoughts

In this scenario you have 3 entities:
The wallet provider
The tipper
The tippee

The wallet provider wants to earn a profit from providing a tip-based wallet service. These profits can be earned in several ways:
Tx fees of the tippers
Referral income from the tippee
In-wallet advertising
Tip-tagged adverts - John123 wants to send you a tip for 10c! Click here to collect, did you know that XYZ exchange (CCEDK?) can convert to your bank account??
Gaining good-will amongst a particular community in hopes of boosting sales of their other products - in this example CCEDK's nanocard etc

The tipper wants to send a small amount of money to reward good content. They want to pay as low a fee as possible and are likely to want to see the full value of their tip go to the content-creator (tippee). They want this process to be as seamless as possible (one-click) and would like to earn cash-back if possible - perhaps this can be x% of any referral income paid to the wallet provider.

The Tippee wants to feel that their work is valued, they want their tip to be as easy to claim and spend as possible. They want to see instantly why they should bother following through and collect their tip. They do not want to see spam, or suspect they may be the target of a scam.
They would like to know of ways they can further monetize their content and would benefit from CONCISE infographics/info telling them what to do to use BitShares to increase their profits.

I really think that something like this could be the viral-advertising campaign that @CCEDK is looking for. (Could someone tag CCEDK for me, i dont know the userID of CCEDK or how to find it)

Perhaps tips cannot be instantly claimed. Tip-tx's could be bundled into a single transaction and the wallet-provider could pay lower per-tx fees as a consequence of delaying the tx's. Is a single large bundled-tx cheaper for the bts network to process? Is tx-confirmation an economy of scale?

I think the crux of this discussion is whether or not transaction processing can be compensated in a way other than in the units transferred (bts, bitUSD etc)

You're positive it requires $0.1 to pay for the cost of security per transaction? Interesting....

I'm not thinking so much tips so much as permanent streams of income in a micropayment channel. So large quantities of micropayments should equate to some decent amount of revenue.

[Permie]

Are you saying that CMX should issue and manage a more centralized microtx-chain?
The fees are of the order $0.1 to pay for the cost of security. The only way I can see to reduce this cost is to issue a centralized chain where fewer witnesses and hardware have to be compensated.
Stan and Dan have said they're not interested in issuing such things due to the regulatory burden.

Although it could be an improvement on Changetip, a opaque centralized database.

I've had other ideas on how to solve the problem of micro-tx

The only issue I have was that micro transactions are not ideal on bit shares at 0.20$ transaction fee.  :-(

BM has said that fees should reflect the value provided to the customer.

Fees need not necessarily be paid by the end-user, and the fee may not even necesarily need to be paid in transaction fees. Perhaps the social-media wallet-provider could front the fees to attract more customers, or the fees may be paid another way. Maybe tipping-users can have their fees paid for them if they advertise/tweet the tip to a threshold number of unique viewers.

Few minutes ago, I had amazing customer service on elegant theme`s forum.

I've got an idea:

I thought it would be cool if I could send a BitUSD micro payment to this guy to thank him. Just like with ChangeTip.

This guy would be probably happy to have free internet money and then he would be incentivized to go through the process to open a wallet. This wallet has this micropayment functionality and keeps track of the referrals the micropayment bring in.

This wallet would have to be great at inviting people with good copy and an easy sign up process. Then for a viral loop, it would invite the new user to start tipping other and participate in the profit sharing of the wallet. "When you tip and bring in new users, we reward you with x% of all their future transactions"

A smart contract with multisig between the wallet provider and the wallet referrer could split the referral rewards on a monthly basis with a pre-defined x% of it's referral transactions. Everytime someone sends a micropayment the wallet and it's the referrer earns.

The x% would be defined by what is needed for funding development while being high enough to incentivizing it's users to tip.

If such a feature existed in a wallet, a marketer could use this and build a business by signing up people by simply sending tips for good work on the internet. (Fiverr, Content, Youtube, twitter, reddit, email, etc)

Not sure how this could work, but here are my initial thoughts

In this scenario you have 3 entities:
The wallet provider
The tipper
The tippee

The wallet provider wants to earn a profit from providing a tip-based wallet service. These profits can be earned in several ways:
Tx fees of the tippers
Referral income from the tippee
In-wallet advertising
Tip-tagged adverts - John123 wants to send you a tip for 10c! Click here to collect, did you know that XYZ exchange (CCEDK?) can convert to your bank account??
Gaining good-will amongst a particular community in hopes of boosting sales of their other products - in this example CCEDK's nanocard etc

The tipper wants to send a small amount of money to reward good content. They want to pay as low a fee as possible and are likely to want to see the full value of their tip go to the content-creator (tippee). They want this process to be as seamless as possible (one-click) and would like to earn cash-back if possible - perhaps this can be x% of any referral income paid to the wallet provider.

The Tippee wants to feel that their work is valued, they want their tip to be as easy to claim and spend as possible. They want to see instantly why they should bother following through and collect their tip. They do not want to see spam, or suspect they may be the target of a scam.
They would like to know of ways they can further monetize their content and would benefit from CONCISE infographics/info telling them what to do to use BitShares to increase their profits.

I really think that something like this could be the viral-advertising campaign that @CCEDK is looking for. (Could someone tag CCEDK for me, i dont know the userID of CCEDK or how to find it)

Perhaps tips cannot be instantly claimed. Tip-tx's could be bundled into a single transaction and the wallet-provider could pay lower per-tx fees as a consequence of delaying the tx's. Is a single large bundled-tx cheaper for the bts network to process? Is tx-confirmation an economy of scale?

I think the crux of this discussion is whether or not transaction processing can be compensated in a way other than in the units transferred (bts, bitUSD etc)

[VoR0220]

So it seems that the current Bitshares 2.0 chain that is handling all the financial aspects is beyond brilliant, the code is beautiful, the functionality is going to be amazing. The only thing that it inherently cannot handle is micropayments. Combined with the recent licensing this creates a problem for people who love the technological capabilities of bitshares but who need to have low fees in order for their applications to work. So it got me thinking. Why doesn't cryptonomex just release a second chain that is fully geared towards micropayments and allow us to build our ecosystem out of there? It would seem that the work would not double, it would merely be changing a couple files in the codebase, (one of those files being the one where people are fiddling with the "fee dials" so to speak) and the devs could go ahead and keep a large chunk of the incoming fees to maintain the engine that makes this entire system work. From there, you can create full integration of trade between the micropayments channel and the BTS channel, and even make it so that you can charge high fees on the micropayments channel. Micropayments are a huge segment of what cryptocurrency is trying to accomplish. While I'm all for shrinking the scope of a project to focus and get more actual work done, I do think it would be short sighted to not bring this area of the industry into our own as there are so many markets that could open up for these services in the coming years. Could call it MicroBTS for the currency....

Idk, what do you guys think? Idea just came to me...it could be a good way to solve this issue.