Do people want on, or off-chain micro payments?

[lukew]

As I've posted recently in other topics I'm working on a payment system and am currently using Bitcoin as the value carrier.

I've been trying to keep everything on-chain while providing a whole range of transaction initiators (smart cards, RFID, mobile app, web, QR, biometric, you name it ) and also speed up the confirmation times in a similar way to Visa. Post will be coming soon with more details

The issue is network fees for small transactions that could end up meaning that when added to the service fee (1-2%), the merchant gets (may as well be) nothing.

I don't want to be a Paypal for Bitcoin by taking payments and just moving balances around in the database until someone wants to withdraw, but with current and possible future high fees for smaller transactions, it may be the only option for some transactions.

I'm asking the community as a whole, if you were considering trying out such a service, would the fact that transactions may not happen on the chain, but just be a number in a database be an issue for you? It would likely be an automated calculation that if the service fees plus network fees are more than x% of the transaction then it is processed internally only.

This would only apply to transactions made at a payment terminal or other merchant device, and the service fees are on the merchant side not the user. Straight user to user transactions would only incur the network fees, same as regular banking really. Free unless making money from the service, and even then I want to make it dirt cheap.

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[AlexBessonov]

Have you ever made your post on how to solve this problem? If you are interested, please PM me and we can chat about different approaches for this problem.

[franky1]

if people were smart enough to think about code... it would be both

EG
a new fee priority formulae that if your coins are over 1 day old you get cheap fee's onchain. if under a day old the fee's escalate immensely so that it stops spammers spamming every block repeatedly.

this then makes things like LN for the quick repeat more than once a day spends have a niche.

in short
if your a day-trader or faucet raider wanting to move funds every 10 minutes.. use LN.
if you only buy something once every couple days you will benefit from onchain utility

thus its not an all on or all off chain. but a fair mix dependant on individuals needs

[mike1183]

I've always been with on-chain payments for user-user or even through gambling websites, However now I am with off-chain, The reasons are simple:

- Before I was against it because there is a central authority and can close the wallet like TradingFortress website before
- But now, the fees are just beyond acceptable, specifically for micro payments, if you send a KB you would need 0.003 BTC fees to guarantee confimation in a block or two which is just too much for micro tx's "6.6 USD or something.

[GXHPP]

if the fees issues are solved by the time you start actual development (by any solution from QT staff, changing the block or doing anything to speed up the process) then I'll say I want onchain more transparent and easier to follow, and also would remove any doubt regarding things happening behind closed doors. Offchain to be used if the Unconfirmed Fee issue is still there.

[panju1]

I would be okay with off-chain micro payments, if it means that fees don't eat into my earnings.
In the case of micro payments, people really wouldn't care as there is not much at stake.
I would withdraw my bitcoins periodically though, before the balance gets too big.

[ScorpionKing]

If you are running something like a BTC based wallet "like I understood" then definitely an on-chain wallet at least for now, that would solve the biggest issue of long confirmation time.. The issue that it would require a big % of BTC users to use this wallet for it to have a use.