So if I want to buy an mp3 from an artist, and the artist charges me 0.99$ for it, paypal will take ~0.40$ of it. Paypal becomes the artist's 60-40% partner. So this option is clearly not viable. If you go through bitcoin, the artist can keep like 98-95% of the money.
I'm confused. I thought you previously argued for small blocks and not worrying about scaling so much?
I'm in favor of the rational use of the blockchain, not necessarily pro-small blocks or big blocks. You can say I'm against block abuse. I wouldn't mind bigger blocks accompanied with a mandatory fee increase to prevent abuse and keep blockchain activity for transactions, instead of spamming or third-party storage.
Isn't it kind of clear that at 3-ish tx per second, Bitcoin won't be used for small payments like this as the fees will have to grow rather a lot higher than they are now?
The 3tx/s is what we have right now but it won't be forever, obviously. With the available software, hardware and networks we are at the low-end of tx capabilities. That will change in the future as all of these evolve. So there'll come a time* when more and more low-value txs will be processed, either directly or indirectly (sidechains), through BTC.
* Not that they aren't currently being processed. I mean that in a post-crowding-the-dust-out scenario.
So if you assume the cost comes down from 10% of value stored annually to 2% or so, the cost per tx is still 1.4 USD, and that's extrapolating from the current situation where there's not that much competition for blockspace. Now, you can still cram some more tx into 1 MB blocks than we currently have, but then again that should also create competition for tx inclusion, so more tx currently is more likely to raise fees than lower them.
If tx per second doesn't rise and you can still send 1 USD cheaper than PayPal in a few years time, that means hardly anyone actually uses Bitcoin.
By the time the subsidy goes down significantly (let's say the halving down to 900 or 450 BTC - which are 2-3 halvings ahead), 2 things will have happened
1) Higher tx capabilities - perhaps 10-20-50x or more, whether directly or with sidechains
2) Much higher BTC price to compensate for subsidy losses. As inflation lowers, BTC becomes stronger price-wise, thus mining 3600 BTCs at 400$ would give the miners less than say mining 900 BTCs at 10.000$.
Isn't it time the white paper was copyrighted and 'cleansed'? Make it pay per view too. I think it's becoming an annoyance for higher minds than us.
Along with satoshi saying bitcoin is not suitable for micropayments perhaps
Bitcoin isn't currently practical for very small micropayments. Not for things like pay per search or per page view without an aggregating mechanism, not things needing to pay less than 0.01. The dust spam limit is a first try at intentionally trying to prevent overly small micropayments like that.
Bitcoin is practical for smaller transactions than are practical with existing payment methods. Small enough to include what you might call the top of the micropayment range. But it doesn't claim to be practical for arbitrarily small micropayments.
That's very clear, isn't it? Currently, my bank debit card (via MasterCard's Maestro network) is the means of payment to pay for short term parking (e.g. €0.50). In fact, it's currently the only way in my town to pay for that. If Satoshi said that "Bitcoin is practical for smaller transactions than are practical with existing payment methods", then he meant that payments even less than €0.50 are supposedly practical with Bitcoin. That's even quite a bit less than the evergreen example of a cup of coffee.
TL;DR: Satoshi expected coffee and parking micropayments to be paid with his peer-to-peer electronic cash, but not very much smaller micropayments (like cents or fractions of a cent).
Key word that Satoshi used: "currently". He realized the problems of the system in terms of scaling right now but expected this will change in the future. We can try to bring the future closer by working on software solutions and waiting for hardware solutions so that it can scale better and more txs fit without problems. However it will be crucial to not allow spam to fill the blocks and for this to happen you must have economic disincentives in place that crowds out the spam: much higher fees than we have right now.
Even at 5c mandatory fee for BTC, a 50c micropayment would be possible with BTC fees being 10% of the whole payment cost. I doubt MasterCard charges less for that. Personally, where I live, I get a warning when trying to pay certain services (post office comes to mind) with something like "an additional 0.35 euro will be charged for credit/debit card transactions". It's like "pay with cash or else +0.35 euro". So if I wanted to buy a 0.72euro stamp for mailing a small envelope inside my country, I would get a +0.35euro "cap" on top of it.
The problem with very low BTC fees is that you can't get cheap txs without getting cheap blockchain abuse. If you get first block inclusion for 0.05 USD and a spammer can get +10 to 20 blocks inclusion for his spam at 0.01 USD, the blockchain can be spammed and bloated for peanuts. So this must be fixed.