How to do micro payments with bitcoin?

[cr1776]

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Maybe that was a flaw in Bitcoin's design. On the flip side, ASICs can exploit excess capacity, which in turn secures Bitcoin's proof-of-work.

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When ASICs are using the then-current best fab process, their useful life will be much longer than the time between early 2013 and now.  At that point it should be easier for more non-farm miners to return since you’ll have years to ROI.

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[drwhobox]

How to do micro payments with bitcoin? The transactions need to be verified on the blockchain, but need to minimize the fees.

Micro payments are really imposible for now in the network due to high fees. The lightning network would be the best big thing to the network I hope that this would be fixed someday. Last 2010-2014 fees are not even a thing when sending transactions it would just cost a few cents unlike now. Micro payments is not prefered.

[xiguadady]

  what I consider bitcoin will be an expensive investments ,an the function of payment would be replaced by another one

[ABISprotocol]

How to do micro payments with bitcoin? The transactions need to be verified on the blockchain, but need to minimize the fees.

This wasn't really feasible before, but once Segwit activated a ray of hope came forth.  With Segwit implemented and gradually growing, and with Lightning now being examined more thoroughly, micro transactions are more of a possibility in bitcoin.

See project in my signature for details, the first phase of the project was proof of concept in the BCN GUI. The next phase will be doing the same thing in GUI settings in a bitcoin wallet (providing the option for microdonations at certain thresholds, for example), but in that latter context, the precondition has always been (1) Segwit and (2) a working Lightning implementation.

Cheers

(Note:  The 'first implementation' on the abis.io page is a dead link due to reorg of the BCN website, please scroll down to where it has a link described as 'bytecoin (BCN) ~ discussion' for more coverage of how this was implemented there for the proof of concept; it is certainly hoped that this will not only be able to be done in BCN (where it was first implemented) and also soon in a bitcoin wallet, but later in various other crypto systems as well.)

And for some other details of a project which will enable microtransactions which was spawned by ideas which were first discussed in the ABIS repo at https://github.com/ABISprotocol/ABIS -- please see http://subsatoshi.org/ which was developed by a colleague of mine, ktorn, and some other folks.

[Carlton Banks]

No way to do micropayments with the current network fess.

I'm big on Bitcoin, but sadly, at the moment, PayPal is probably your best bet

PayPal can't do micropayments either.

Micropayments are probably best defined as payments in amounts less than the smallest unit that a given payment network can process using regular payments. Which isn't possible on PayPal.

[cellard]

Can you describe it with a practical example?


For example, I want to buy something in Amazon using LN. Where do I connect to, to a random channel or directly to Amazon? how do I know if I connect a certain channel it will re-route to Amazon and other places?

In practice, it'll be simple.

You can open a channel with yourself to start with. No need to lock yourself to anyone.

Then, the wallet software will dynamically open channels with whoever you need to transact with. The option of choosing specifically who to open channels with can be done, but it won't be as quick or efficient as using the wallet software to route the transaction for you.

Im not sure about this... it would force me to make transactions as big as possible, even if I want to buy something worth $40, depending on how crowded the mempool is, I may consume a big chunk of these $40 in fees... and I don't feel confident having big sums of money outside of my cold storage, I would like to get out only what im going to spend but I dont see a clear solution to this, LN forces you to fill a decent amount, like $500 with current fees I guess would be a decent amount to spend on smaller purchases and would last for a while until you need to refill again.

"Force" is the wrong word. You're right though, there's not much point in adding BTC to a channel just for 1 purchase, you should fill it with as much as you're happy with so you can make multiple purchases from 1 channel. That way you can take advantage of the Lightning's fees, refilling channels with on-chain transactions should be kept to a minimum if you don't want to pay too much in fees.

What will happen once all on-chain scaling methods are already on place (so let's say, segwit at 90% usage, schorr sigs, MAST...) and the fees start getting too high even after deploying all of that? How high would the fee need to go to consider a blocksize increase?

And under what scenario isn't a blocksize increase a total clusterfuck which would end up with 2 coins? Because I don't see it possible, a blocksize increase will ALWAYS end up with 2 coins... the hardcore "original bitcoiners" will stay with 1MB and then the new whatever increase of blocksize new chain... I just don't see blocksize increase possibles without massive drama and a split of 2 coins happening, and unless developers can keep coming up with strategies to reduce fees on-chain without a blocksize increase, we'll have that drama sooner or later... don't like to think about that but I think it's coming eventually.

[Carlton Banks]

What will happen once all on-chain scaling methods are already on place (so let's say, segwit at 90% usage, schorr sigs, MAST...) and the fees start getting too high even after deploying all of that? How high would the fee need to go to consider a blocksize increase?

Define "too high". Clearly, everyone has different definitions of how much is too much, people are paying historically high average fees at the moment which are clearly not too high for those people.

As for on-chain size increases, those need to be preceded by study into off-setting the additional processing burden higher blockweight limits represent. Segwit is somewhat of an example; allowing signature hashing to scale linearly mitigated (but did not offset) the increase to a 4MB block limit.

Aggregated Schnorr signatures will positively off-set the effect of larger blocks; not only will they permit more space within the present limit, but the much reduced processing required for aggregated signatures means larger block sizes should be safer (but only for block-space containing aggregated signatures, much like how >1MB of block space is only available to Segwit transactions).

And under what scenario isn't a blocksize increase a total clusterfuck which would end up with 2 coins?

Segwit. Increased block limit to 4MB. No clusterfuck (or continuation of a non-Segwit hardfork) occurred.

[Wirex]

Unfortunately with the current miners fees that bitcoin is subjected to, it is almost impossible to use BTC for microtransactions. However, With Wirex, you can transfer any amount of bitcoins to any Wirex wallet with ZERO FEES. We also give our customers segwit wallets that can reduce the transaction cost by up to 60%. For more information on what we have to offer, feel free to visit:

https://wirexapp.com/wallet/

https://wirexapp.com/bitcoin-money-transfers

https://wirexapp.com/segwit-bitcoin-wallet-update/

[squatter]

As for on-chain size increases, those need to be preceded by study into off-setting the additional processing burden higher blockweight limits represent. Segwit is somewhat of an example; allowing signature hashing to scale linearly mitigated (but did not offset) the increase to a 4MB block limit.

Have there been any noteworthy studies on the potential effects of bigger blocks since the IC3 and Bitfury studies? I suppose that data is a few years old now.

My biggest concern at this point isn't the marginal nodes and miners that couldn't keep up with the network. I'm much more concerned about the propensity for any hard fork to cause a permanent split with multiple resulting networks. Segwit was a one-shot deal; there's only so much you can do by discounting witness data. We can further optimize transaction size, but eventually, the notion of a hard fork block size increase will rear its head again.

[Carlton Banks]

As for on-chain size increases, those need to be preceded by study into off-setting the additional processing burden higher blockweight limits represent. Segwit is somewhat of an example; allowing signature hashing to scale linearly mitigated (but did not offset) the increase to a 4MB block limit.

Have there been any noteworthy studies on the potential effects of bigger blocks since the IC3 and Bitfury studies? I suppose that data is a few years old now.

Not aware of any, but I would look more to the developers implementing features like MAST or Schnorr for that type of information, the stuff that hits the press is usually self-promoting (why take it to the press otherwise). I think 1 MAST implementation exists (but is controversial), and no Schnorr implementations exist yet. Benchmarking to gauge the extent that MAST could permit larger blocks doesn't exist, AFAIK.

My biggest concern at this point isn't the marginal nodes and miners that couldn't keep up with the network. I'm much more concerned about the propensity for any hard fork to cause a permanent split with multiple resulting networks. Segwit was a one-shot deal; there's only so much you can do by discounting witness data. We can further optimize transaction size, but eventually, the notion of a hard fork block size increase will rear its head again.

I'm not sure about Segwit being a one-shot, it's possible that future soft forks could be designed to increase the max blockweight even further. I would certainly hope it can be done, as it's the least disruptive way to do so.

This doesn't have to mean hard-forked blockweight changes will be difficult, though. I think once the case for that is genuinely compelling, then it will happen. Up till now, that case has been rejected by most Bitcoiners. But people will change their minds about it as improvements to block processing are tested and proven on the live network.

[Michael CF]

It is difficult to make small payments when the value of Bitcoin has increased significantly compared to before. You can switch to other coin for a cheaper deal!

[bitcoinisbest]

It is difficult to make small payments when the value of Bitcoin has increased significantly compared to before. You can switch to other coin for a cheaper deal!

Nowdays it is impossible to send a small transaction in btc to anyone else because it might be possible that the network fees would cost you more than the actual sending. So best way only eft now is to send via altcoins which is very less expensive and way quicker than the btc.

[sjyi]

...We also have ZERO fees when transferring bitcoins from one Wirex user to another, making it possible to some degree to use bitcoins for micro-transactions .
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Hmm, an interesting idea and implementation.

So the BTC would go from one address (A) to a Wirex address (B).  Then the transfer occur to another Wirex address (C).  This amount then can be withdrawn to a local fiat currency.

My question is how would blockchain represent this balance of BTC address A?
Maybe BTC address A and Wirex address B could be in one account, but when some bitcoin got transferred to Wirex address C in a different account, how would A be reflected in the chainblock?

[madwica]

It is difficult to make small payments when the value of Bitcoin has increased significantly compared to before. You can switch to other coin for a cheaper deal!

Nowdays it is impossible to send a small transaction in btc to anyone else because it might be possible that the network fees would cost you more than the actual sending. So best way only eft now is to send via altcoins which is very less expensive and way quicker than the btc.

Agree with you mate, almost all the exchange and wallets are now implement the minimum amount of transaction with high transaction fees, for now at the current value of bitcoin there is no users do micro transactions because we do not want to take high fees in every transaction we made.

That is why i did is if i do transaction i assure that it is a huge amount of transaction and choosing small transaction fee but i need to wait for long period of time to confirmed it in blockchain it was listed in the Que.

[piter_wip12592]

The value of BTC is very high so you want to pay small amounts, then I should switch to a smaller value as ETH will be easier to pay but lose less transaction fees. I usually do not trade small amounts of BTC because when trading small amounts that many times will cost me much transaction.

[SamsungBitcoin]

Unfortunately with the current miners fees that bitcoin is subjected to, it is almost impossible to use BTC for microtransactions. However, With Wirex, you can transfer any amount of bitcoins to any Wirex wallet with ZERO FEES. We also give our customers segwit wallets that can reduce the transaction cost by up to 60%. For more information on what we have to offer, feel free to visit:

https://wirexapp.com/wallet/

https://wirexapp.com/bitcoin-money-transfers

https://wirexapp.com/segwit-bitcoin-wallet-update/

That is normal that doing transaction with the same wallet has a ZERO transaction FEE.

Because for now if you are transferring fund to different wallet the fee was too high even you send small amount of bitcoin that is why i recommend if you want to do transaction like that much better it is have huge volume of transaction to lessen the fees imposed in your transaction.
Specially if you are using exchange site wallets.

But i heard that if you are using segwit address it will reduce the transaction fee, but i do not even try to used segwit address.

[cipher-x_09]

Based on my experienced this cannot be done right now why? Because if you pay small amount of payments for the transaction you are going to conduct needing miner's confirmation  will not be confirmed because it is basically low priority you need to pay them with a huge amount coins for them to prioritize confirming your transaction.

[market field]

For bitcoin, I should not go to retail transactions, as this would cost a lot of money. To make a small payment, I should choose ETH to choose better and more effective

[endlasuresh]

It's hard to do micro payments and it also can become mini micro payment or big payment because of fluctuation in price. I suggest you to check some other alternative coins.

[nc50lc]

How to do micro payments with bitcoin? The transactions need to be verified on the blockchain, but need to minimize the fees.

If you think of it, that was easy~ Offchain.
Use or partner with a 3rd party service (Ex. Coins) that accepts bitcoin and can send and receive bitcoins between users without a fee (or just their service fee, they didn't send the funds using the blockchain anyways).
Or establish a 3rd party wallet accounts (offchain) to be used for the site that can hold (pseudo) btc balances from users to be used for purchasing products.
With this, you can even offer refunds which is impossible using the blockchain.
The process is Centralized, but micro-payments needs centralization.
Take note of the security vulnerabilities.

The only drawback is, users have to use that particular service in order to pay for your store or establishment.
Just add a different payment option and you're good to go.