Bitcoin micropayments solve online content monetization challenges

Bitcoin's potential to enable "micropayments" on the Internet is one of the reasons that attracted many Silicon Valley venture capitalists, but whether Internet users are willing to pay small fees for online content is still under discussion.

Some people believe that in the future, users will be willing to pay to read an article so that they can skip annoying ads, which are now longer than before, while others believe that the digital content world will still be driven by advertising for a long time. Dan丹•莫尔黑德, founder and CEO of Pantera Capital, and文西斯•卡萨雷斯, CEO of XAPO, discussed the pros and cons of Bitcoin "micropayments" when they attended the Consensus 2015 conference in September.

Can Bitcoin solve the inefficiencies in the monetization of digital content?

Before discussing whether Bitcoin can accelerate the process of digital content monetization, Morehead first pointed out the main means of promoting the monetization of Internet content:

"The current means of monetizing online content is inefficient. Usually, if people want to watch content without being interrupted by ads, they have to pay a large amount of money for a subscription."

This is not an ideal monetization method, as it forces consumers to pay a lot of money. Morehead said that many users will find that some content is not worth what they paid.

In this case, it seems that it is possible to consider using Bitcoin micropayments to promote the monetization of online content. However, there are still some problems to be solved before this.

Bitcoin needs to be widely accepted

Vincis Casares pointed out that one reason many potential Bitcoin applications have been difficult to realize is that the population using Bitcoin is relatively small:

“If hundreds of millions of Internet users had a wallet with $5 worth of Bitcoin, we could do a lot of things, but the fact is that few people have Bitcoin, which is why many innovative Bitcoin applications are difficult to achieve... This is also because we cannot provide users with an easier way to use Bitcoin. I admit that using Bitcoin is more cumbersome than paying with a credit card. First you have to download a Bitcoin wallet, buy Bitcoin, and then send Bitcoin to me.”

Casares also made a comparison: "300 million people play Clash of Clans every day, but not a single one uses Bitcoin."

Theprotocol.tv has taken an interesting approach to addressing the small Bitcoin user base by focusing on Bitcoin-related content. After all, those who are interested in Bitcoin are more likely to own Bitcoin.

The problem of on-chain micropayments must be solved

The second problem is the cost of sending small Bitcoin transactions on-chain. The current solution is to process small payments off-chain on a separate, centralized ledger. Changetip, a Bitcoin tipping service provider, uses this method to handle user funds.

Solutions to decentralize bitcoin micropayments are still being worked on, with the Lightning Network gaining the most attention. ChangeTip CEO Nick Sullivan has said that ChangeTip will one day abandon this centralized way of handling funds.

Original article: http://insidebitcoins.com/news/the-economics-of-bitcoin-micropayments-for-digital-content/35980
By Kyle Torpey
Translator: Bibit
Editor: printemps
Source (translation): Babbitt Information