Projects like these is where Bitcoin can really shine.
Maybe Bitcoin will conquer the world, maybe it won't. I have no idea.
What I do know is there is real utility in being "electronic petty cash" which Bitcoin can easily become.
Imagine: Alice sends Bob a few bitcoins after Bob writes a particularly insightful comment on HN. Bob then comes across a great blog post by Charlie and sends him a few bitcoins. Charlie then finds an open-source project by Diane that will save him hours of work and sends her a few bitcoins. And so on.
It rarely would get converted to USD and wouldn't amount to much when it did. Instead, people would just earn a bit here and spend a bit here.
Bitcoin enthusiasts miss that USD works fine for most people. But right now it's really hard to do the above scenario using traditional banking. I don't want to connect my bank account to some website to send a someone a few bucks. It's just not worth the hassle/potential risk.
I can't be the first person to think of this. But I'm just not seeing much movement in this direction. Am I overlooking something? Or do I just need to be patient?
Someone on Reddit made a bot that implements this functionality site-wide. You can say "+/u/bitcointip @Username $1" in a comment or message, and the bot will send $1 worth of bitcoins out of your balance to that user. If they don't have a Reddit Bitcoin wallet, it creates one when they get sent coins. The bot also has denominations of beer ($3.64), coffee ($1.38), and internet ($0.25).
Yeah, /u/bitcointip is a great example of what I'm talking about.
Though I do wonder how the more vocal Bitcoin supporters would react if the project never grew beyond "electronic petty cash," even if it was successful at being that (i.e., widely used and easy to set up).
My worry is if Bitcoin "fails" in its larger goals (e.g., challenging the USD's global domination), it'll be seen as a failed project which will keep it from even being able to accomplish its smaller, more manageable goals.
What is preventing USD from being used in this way? It seems to me to only stumbling block are regulatory and security restrictions. If that is the case, wouldn't future bitcoin regulation put an end to this type of use case?
Or is the real benefit of your proposed use case the distance of bitcoin value from perceived financial value (ie you are willing to tip X bitcoin but have second thoughts when looking it as X cents)?
Micropayments is a really tough business. Basically it's too risky. Chargebacks are often anywhere between $15 to $35 per transaction.
When you earn a small percentage of a $5 transaction, which a sender claims to have sent by mistake (or he/she requests the money back due to different reasons) 2 things happen:
A. You lose your % of $5
B. You get charged $35.
Not a pretty situation to be in when you are scaling and about 15-30% of your sales get charged back.
Bitcoins are irreversible, so at least they mitigate your risk as a micropayment provider (or as a seller).
It's fairly easy to send USD online if you own a credit card and bank account, but receiving money is a whole lot harder. It's also harder to do it with the degree of anonymity that Bitcoin provides and without the risk of your payment provider freezing your funds or banning you from using their service.
An IP address is light-years from a real-life identity. Without a warrant, there's not a chance of figuring out even the account holders name-- which could be different from the person who actually performed the transaction. It could be a neighbor, a friend, a roommate, anyone else who ever had the wifi password, the possibilities are endless.
If anonymity is a concern getting a court order doesn't sound like a big deal. Even if not, you vastly overestimate the anonymity an IP provides, and if anonymity is a concern legal deniability isn't a big win either. You also ignore that you could potentially get dozens or hundreds of IP addresses. Anonymity, like security, is hard, and has layers.
Anonymity is not a binary variable which is why I worded it "degree of anonymity". I think it should be obvious that credit cards and bank accounts are vastly less anonymous than Bitcoin.
> It seems to me to only stumbling block are regulatory and security restrictions.
That's correct, but those are humongous only's.
> If that is the case, wouldn't future bitcoin regulation put an end to this type of use case?
Short of large-scale Internet traffic examination, the only thing regulations can hope to do is restrict the exit points: the exchanges between Bitcoin and some government-controlled currency.
What you describe kind of sounds like a universal karma system (yay internet points!). As stackoverflow and similar sites have shown, people will do quite a lot to accumulate internet points.
Not really. You can't purchase karma. Or rather: karma that you could purchase with dollars and use to gratify someone or incentives a task would be akin to a specialised currency.
Maybe Bitcoin will conquer the world, maybe it won't. I have no idea.
What I do know is there is real utility in being "electronic petty cash" which Bitcoin can easily become.
Imagine: Alice sends Bob a few bitcoins after Bob writes a particularly insightful comment on HN. Bob then comes across a great blog post by Charlie and sends him a few bitcoins. Charlie then finds an open-source project by Diane that will save him hours of work and sends her a few bitcoins. And so on.
It rarely would get converted to USD and wouldn't amount to much when it did. Instead, people would just earn a bit here and spend a bit here.
Bitcoin enthusiasts miss that USD works fine for most people. But right now it's really hard to do the above scenario using traditional banking. I don't want to connect my bank account to some website to send a someone a few bucks. It's just not worth the hassle/potential risk.
I can't be the first person to think of this. But I'm just not seeing much movement in this direction. Am I overlooking something? Or do I just need to be patient?