402: Payment required

The business model of the Internet is broken. With websites monetized by annoying ads, content hidden behind paywalls and expensive subscriptions, and data-harvesting middlemen running 24/7 digital surveillance, it’s time for a change.

But what would such a change look like? Is a new Internet possible? What would replace ads to monetize the Internet? Enter micro and nano payments. Tiny payments can fuel every ping request, exchange of information, and interaction between humans, machines, and artificial intelligence (AI) agents.

The key to making this work is a forgotten status code built into the HTTP protocol: 402 – Payment Required. Reserved for a future payment system that never materialized, 402 was meant to allow websites to charge users for access. However, since no scalable micropayment solution existed, it was left unimplemented.

All of that can change now that the BSV blockchain can do one million transactions per second (TPS) with fees of fractions of a cent. Let’s dive into what the new Internet might look like.

What are micropayments, and why do they matter?

When Bitcoin was released in 2009, the smallest online payment possible was around $5. Things have changed since then, but making sub-dollar payments via the most popular payment methods is still challenging.

Micropayments could be anything below $1, but they can go much lower. These days, it’s possible to make payments of $0.00001 on scalable blockchains like BSV.

Why are micropayments important? As we’ll explore in this article, they make entirely new business models possible, lower the barriers to entry for doing commerce online, and can fundamentally fix the broken Internet we all rely on today.

For micropayments to be possible at the scale required, they need a scalable utility blockchain like BSV. Slow, expensive blockchains like Ethereum won’t cut it, and layer 2 solutions won’t work.

Real-world use cases for a micropayment-powered Internet

Rather than focusing on the purely hypothetical, let’s explore some real-world use cases for micropayments.

API monetization and machine-to-machine payments – Like web content, access to APIs could be paid for with micropayments. Not only would this make them more accessible, but it would end low-demand users subsidizing high-demand ones. Micropayments also make machine-to-machine payments possible; watch this video on the Internet of Things (IoT) for some brain food on that subject.

The transformation of gaming – Micro and nano payments make the play-to-earn (P2E) gaming model feasible at scale. They also make buying in-game assets like skins, power-ups, and other items possible. These would be tradable on secondary markets—games like CryptoFights have already shown how this works. Entire online economies can be created within games and virtual worlds like the metaverse, thanks to micropayments at scale.

The economic and social implications of tiny payments

Now that we’ve explored some use cases let’s look at how a micropayment-fueled global network would change the world. As we’ve learned through the Web 2.0 experiment, what happens online has dramatic implications for the real world.

Liberation of the Internet – Right now, the Internet is akin to a few walled gardens owned by giant corporations. You can play in Zuckerberg, Musk, and Bezos’s properties, but they don’t interoperate, and they set the rules and make all of the money. A peer-to-peer (P2P) Internet fueled by micropayments would take away much of their power, make global commerce accessible to billions of humans, and give data sovereignty to every user. These three consequences would have almost incalculable implications for how the world works.

Reduction of censorship – By now, we’re all aware of how Twitter under Jack Dorsey and Facebook under Mark Zuckerberg engaged in censorship and the suppression of information on a global scale. With decentralized P2P communications apps and Web 3.0 social media platforms, it would be almost impossible to do this since nobody would have enough control to pull it off, and the power of advertisers would be neutered as users would fund the content they want to see. The incentive shift would also lead to much better quality content than the clickbait nonsense we’re all used to.

Massively enhanced privacy – Clearly, privacy matters. In surveys about central bank digital currencies (CBDCs), Western countries cite it as a prime concern. In 2013, Edward Snowden caused a political scandal when he revealed how the American government was spying on its people. Yet, companies like Meta engage in similar levels of spying every day. An Internet built on the bedrock of scalable blockchain technology and fueled by micropayments would be a game changer for privacy: fewer middlemen means fewer opportunities to snoop, and with no ads, there’s no need to collect all that data.

A new Internet with Bitcoin at scale

Unlike in 1997, when 402 – Payment Required was first introduced, today, a real scalable micropayment solution can make it work at scale. After its Teranode upgrade, the BSV blockchain can process one million TPS for fractions of a cent, making the original dream of the Internet possible and solving the dilemma of how Bitcoin miners can stay solvent in the long term.

Being able to pay anyone, anywhere, instantly via a browser or QR code would change everything. Content creators would receive payment instantly, spam would be reduced, scams would become unprofitable, bot networks would fold, and new businesses would spring up to offer services based on micro and nano payments.

This new Internet isn’t just a dream; it can become a reality faster than many think. The foundation has already been laid, and the superstructure is slowly coming together. Those who want to see for themselves should experiment with some of the great BSV blockchain apps. Have fun, and let your imagination run wild!

Listen to early Bitcoin developer Mike Hearn talk about how he’d like to work on integrating micropayments into the HTTP protocol.

Watch IPv6 Forum’s Latif Ladid: We want to combine the use of end-to-end model in Internet