Monetization Idea for Electrum

[RealBitcoin]

I don't know what is the income of the Electrum developers, but I think Electrum can develope an income source for itself so that the developers can work full-time on it (because I observed that development nowadays is quite slow, and only Thomas is doing most of the work). Besides more developers and experts can be hired if Electrum has a fund to pay people from it.


I know that Electrum is very sensitive, and it doesn't want to compromise on security. However I think my ideas won't compromise security and would have little or no drawback.



Monetization for Developers

• Banner Ad System (OPTIONAL): A 728x90 banner ad integrated into the software. perhaps at the bottom, below the "Balance", the lower part could be extended so that an ad can be inserted there. Now obviously the AD would be IMAGE + LINK ONLY (No HTML, No Javascript, No Flash, No scripts at all, in order to have good security and avoid script malware). It can also be turned off from the Preferences Menu, if users would not like it
• Premium Plugins (OPTIONAL): The plugin system could be reworked, in order to allow 3rd party plugins to be inserted there (from reputable sources only), but these plugins would be subscription based, and you would get sort of a password or token (after purchasing the subscription) in order to unlock it. Then the Plugin Owners and the Devs would just split the revenue from it. For added security, the Plugin should be sandboxed or contained in order to not have access to critical security areas of the Wallet software itself.
• Premium Themes (OPTIONAL): This is mostly for phone wallets, but the basic electrum theme is a little bit simple users could purchase premium themes that would make the design look cooler, for a few satoshis.

It's all optional, so if people don't want to use this, they can turn it all off and use Electrum as it is now. But if people do want to use it, they would contribute to the development fund.



Monetization for Servers

This one is quite simple, but it requires a little bit of redesigning the Server system.

• Premium Address Limit: I have noticed that each Electrum server has an arbitrary limit of maximum addresses supported. We can standardize that to let's say 1000 (as most users would not need more), and if a user would need more than 1000 addresses, they would pay a subscription fee directly to that server. This would help servers, a lot, instead of relying on donations, they would have a more stable income source.
  
  Now of course anyone can setup an Electrum Server if they don't want to pay. But why waste the Server's precious resources for big users, instead let them pay for the extra requirements if they dont want to setup their own server.
  
  So a maximum limit of 1000 Free Addresses, and anything above that should be a paid subscription to the server the user is connected to. This would allow Servers to offer a higher maximum limit, and would have a stable income, that would allow them to pay the hosting bills.
  
  
  

Look the donation system is not sustainable. The altruism of humans is not that good, so certain things have to be monetized with the condition to not lower security.

I just connected to a random server:

Code:

Welcome to VPS.hsmiths.com! 
Hardware:         Intel Atom CPU C2750 @ 2.40GHz, 6 Cores, SSD (Scaleway VC1L)
Bitcoin Core:     0.13.1 (ppa:bitcoin/bitcoin) (full node)
Limits:           50000 addresses (no pruning)

This guy is running a pretty high quality server with a very generous address limit, all for free. And he only got 2 donations of barely 11$:

https://blockchain.info/address/16w8pyLbV2cJsVDkNgSAEL2uJv55ZECuGS

And I don't think the other Servers are more lucky than him. So I think, we need to add a little bit of commercial element to this too, to make the Electrum system more self-sustainable.

[1714643669]

1714643669

[1714643669]

1714643669

[pooya87]

other bitcoin thin wallet clients have tried monetizing and failed (drove users away from using that client because it stopped being completely free bitcoin wallet)

• banner ads: nobody ever liked ads even if they know it helps the development, uTorrent added banners for advertising, people stopped upgrading to versions above 2.2.1 and started using other clients.
• plugins: they are not being used that much, and they will be used as long as they are open source (a certain level of trust), and you can't sell something that is open source.
• themes: meh, the interface is fixed, i don't see how themes can be of any use. i wouldn't personally care for it.
• servers: they are getting donations (2 bitcoin (i think $600-$700) donation). this server is either unlucky or this is a new address. but generally people on a P2P network shouldn't be doing it for the money and they mostly don't. they do it to help out other ps.

[ThomasV]

Thank you for your post. Although I mostly disagree with your ideas, it gives me a good opportunity to explain what I think.

Electrum is both an open source project and a company (Electrum Technologies).

I created the company in order to:
 - distribute the software through a legal entity.
 - provide support for corporate users.
 - accelerate development.

The monetization ideas you listed in your post are not original, and have been considered already. The company is currently earning money on consulting, and on the Trustedcoin plugin.  A few other monetization ideas are in development.

I have been contacted several times by VCs who wanted to invest in Electrum (the company).
After several inquiries, I have decided not to follow that path, for the following reasons:
 - I believe that software quality is generally better when people write it for fun, than when they are getting paid for it.
   (it is not a question of competence, it has to do with long-term commitment to fix the things you do wrong.)
 - I would not be having fun if I was working for VCs.
 - I believe that the Silicon Valley model of development (grow fast, pay investors later or die) does not suit well Bitcoin.
 - As far as the company is concerned, I prefer organic growth. (maybe it has to do with your typical Bitcoiner's debt aversion syndrome).

What's wrong with the Silicon Valley model applied to Bitcoin? Well, despite what you can read in various Bitcoin media, Bitcoin's growth is comparatively slow. (I mean, slower than companies like Ebay, Facebook, Amazon, etc.), because its userbase grows slower. I believe this is because people are generally more conservative with money and savings, than with signing up on a social network. As a result, the competition between Bitcoin companies is more a marathon than a sprint race. What Bitcoin needs is long-term commitment, and not companies that go bust when they are out of VC money.

When it comes to using funds, there are 3 things where Electrum could benefit from money: development, servers, distribution.

1. Development:
First, your observation that development is slower today is wrong. You are not seeing the whole picture; development effort is not proportional to the number of commits or visible features. Most of the Electrum software has been developed by myself and developers doing this on their free time. Other parts of the code have been developed by external companies, or paid developers. I believe paid development should be funnelled to the aspects of the code that are not handled well by developers working on their free time.

2. Servers:
Currently there is no shortage of free servers. The new server code (ElectrumX by kyuupichian) has made it much less resource intensive to run an Electrum server.
Paying servers have already been discussed. So far nobody has been running a paying server successfully, because of the competition of free servers.
I think it will be possible to have paying servers once we have support for payment channels in the client.

3. Distribution & packaging.
This is something where money can be useful, because it is typically not very exciting for developers working on their free time. This is the primary reason why the company was created. I hope to be able to hire someone this year, btw.

[davout]

Electrum simply is the best wallet out there.

[kolloh]

Good response from ThomasV and glad to see he feels the way he does. I am definitely not a fan of adding banner ads or the other recommended monetization strategies referenced in the initial post. The addition of those would likely cause me (and probably a number of other users) to look into switch to another bitcoin client.

[Cereberus]

I would love that Electrum developers get supported the same way server holders are getting quite some lengthy donations as you can see in the picture below which is an address used for receiving donation from electrum users. I am a fan of banner ad too below the last part of the window of the electrum wallet but I see it's not welcome by the electrum developer so I respect him and his idea.

[tnkflx]

I would love that Electrum developers get supported the same way server holders are getting quite some lengthy donations as you can see in the picture below which is an address used for receiving donation from electrum users. I am a fan of banner ad too below the last part of the window of the electrum wallet but I see it's not welcome by the electrum developer so I respect him and his idea.

Which server is that?

[Cereberus]

electrum2.villocq.com

Also if you want to donate to a specific server you can go to the console to see at which server you are connected or alternatively you can click the green button and select a server which you think is doing a good job for you and donate. I always donate 0.001 btc (well I know it's not much but better than nothing) to my most used server. For the moment I am sticking with this as is working flawlessly from more than 2 months now.

Here is what the server person is saying if you click the console in electrum

>>

>>
Welcome to this Electrum server!

Donation address: 1JL8K1Bh1EQpBUk41WBPvdjwn5vbjp55bv

>>

[tnkflx]

electrum2.villocq.com

That's what I thought. Be aware that the donation of 5.8999 BTC was actually a mistake... In general, running an Electrum server is not profitable. I think only a couple of people actually break even, I don't.

[Cereberus]

electrum2.villocq.com

That's what I thought. Be aware that the donation of 5.8999 BTC was actually a mistake... In general, running an Electrum server is not profitable. I think only a couple of people actually break even, I don't.

Maybe it's an error at this one but I have seen other servers with 4.67 BTC as donations so I think running electrum servers can be profitable in the long term.

Beside that the people who run electrum servers mainly do it for the community and not for the money in the first place.

So hats off to them and to you of course.

[RealBitcoin]

Thank you for your post. Although I mostly disagree with your ideas, it gives me a good opportunity to explain what I think.

Electrum is both an open source project and a company (Electrum Technologies).

I created the company in order to:
 - distribute the software through a legal entity.
 - provide support for corporate users.
 - accelerate development.

The monetization ideas you listed in your post are not original, and have been considered already. The company is currently earning money on consulting, and on the Trustedcoin plugin.  A few other monetization ideas are in development.

I have been contacted several times by VCs who wanted to invest in Electrum (the company).
After several inquiries, I have decided not to follow that path, for the following reasons:
 - I believe that software quality is generally better when people write it for fun, than when they are getting paid for it.
   (it is not a question of competence, it has to do with long-term commitment to fix the things you do wrong.)
 - I would not be having fun if I was working for VCs.
 - I believe that the Silicon Valley model of development (grow fast, pay investors later or die) does not suit well Bitcoin.
 - As far as the company is concerned, I prefer organic growth. (maybe it has to do with your typical Bitcoiner's debt aversion syndrome).

What's wrong with the Silicon Valley model applied to Bitcoin? Well, despite what you can read in various Bitcoin media, Bitcoin's growth is comparatively slow. (I mean, slower than companies like Ebay, Facebook, Amazon, etc.), because its userbase grows slower. I believe this is because people are generally more conservative with money and savings, than with signing up on a social network. As a result, the competition between Bitcoin companies is more a marathon than a sprint race. What Bitcoin needs is long-term commitment, and not companies that go bust when they are out of VC money.

When it comes to using funds, there are 3 things where Electrum could benefit from money: development, servers, distribution.

1. Development:
First, your observation that development is slower today is wrong. You are not seeing the whole picture; development effort is not proportional to the number of commits or visible features. Most of the Electrum software has been developed by myself and developers doing this on their free time. Other parts of the code have been developed by external companies, or paid developers. I believe paid development should be funnelled to the aspects of the code that are not handled well by developers working on their free time.

2. Servers:
Currently there is no shortage of free servers. The new server code (ElectrumX by kyuupichian) has made it much less resource intensive to run an Electrum server.
Paying servers have already been discussed. So far nobody has been running a paying server successfully, because of the competition of free servers.
I think it will be possible to have paying servers once we have support for payment channels in the client.

3. Distribution & packaging.
This is something where money can be useful, because it is typically not very exciting for developers working on their free time. This is the primary reason why the company was created. I hope to be able to hire someone this year, btw.

I see, well good luck with the job, so far Electrum has been an amazing wallet, and I hope it keep being the same way.