Micro-tipping with Bitcoin

November 27, 2014

If you particularly liked a blog post of mine and want to "tip" me for it, you can now do so underneath each of my blog posts:


I've long been a fan of micropayments on the Internet. Like dropping a few coins into a musician's hat, it's not singlehandedly going to feed him or her, but it shows appreciation, and in aggregate, it makes a difference.

Tipping is not a Checkout process

Unfortunately, none of the existing solutions had me convinced thus far. For instance, Paypal is reasonably universal on the English speaking Internet, but the fees are abhorrent, eating up a huge chunk of the already small payment. The same goes for Amazon, Google Checkout or whatever other "e-commerce" payment providers there are.

Another service, Flattr, is specifically for tipping. It has the "tippers" assign a tipping budget per month and divides it up between all recipients whose "like" buttons the tipper has clicked that month. That's a nice concept. But both parties use that very same service. For my taste, that's not universal enough: It lacks openness.

Bitcoin to the rescue! Because of its decentralized nature and extremely low transaction fees, it seems like the perfect solution to this problem. While there are certainly some larger and some smaller providers of bitcoin infrastructure, there's no central, unchangeable party involved in the process.

As long as both parties have a bitcoin "wallet", they can transfer even small amounts of money without involvement of a central party, and without incurring large fees.

Bitcoin Tipping Services

Tipping with Bitcoin does not require a facilitating service or special button. I could give you my bitcoin address (a long string) and you could send me what you like without any other information.

Of course, for convenience, there are already a number of servies on the Internet trying to simplify tipping with Bitcoin:

Changetip is interesting as the recipient initially has to do nothing at all to get tipped (they just need to sign up to collect their tips after the fact). The person intending to tip still needs to sign up with them specifically, and withdrawing tips costs a small fee. Also, the user interface is somewhat clunky (you @-mention their service on twitter for instance, and Changetip replies to both you and the recipient with a confirmation, somewhat clogging up a conversation with tipping chatter unrelated to the topic at hand).

For this blog, I chose a Coinbase tip button instead, because (go ahead, click on it and look) it allows you to participate whether or not you are a Coinbase customer too. If you are, the default tip is 300 "bits" (that's 0.0003 BTC, or about 10 US cents / 8 Euro cents at the time of writing). If not, it just shows you the bitcoin address (an account number, if you will) and a corresponding QR code and any arbitrary Bitcoin wallet knows what to do with that.

If this catches on over time, there's a real chance it could make (geographically unrestricted) micropayments on the Internet obiquituous, shifting some of the weight of the Internet's content economy away from ever more obtrusive ads. How's that for a bright future?

Where can I learn more?

If you want to understand better how Bitcoin works (without quite too much technical jargon), check out the Wikipedia entry on Bitcoin and the excellent Bitcoin wiki.

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