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Tiny payments are changing the expenses landscape. Micropayments and nanopayments are not entirely new concepts and practices. But with the introduction of Bitcoin, it has solidified because of its ability to use blockchain technology.

Micropayments are an untapped market segment due to the limitations of traditional payment rails such as visas. But given the advent and future of the Internet of Things (IoT) and microservices, micropayments will be in demand more than ever.

The market for these tiny payments could grow bigger each year. To ignore micropayments is almost like saying that the internet is “just another form of mail.”

Microservices will inevitably expand, and it’s only fitting to see the evolution of money. This infographic will give a top-to-bottom guide to micropayments and nanopayments and explore how they are changing online transactions.

What is micropayment?

Micropayments are small financial transactions typically conducted online. The size or definition of a micropayment varies, but it is usually less than a dollar, sometimes even less than a cent.

The definition depends on the payment processor and the company. For example, some organizations consider all transactions under $1 as micropayments, while others only recognize transactions under $5, $10, or occasionally even $20 as micropayments.

The purpose of micropayments is quite broad. First, micropayments are a way to take advantage of the internet by making it easier to distribute royalties, online tips, digital rights, in-game purchases, and even to manage devices connected by the Internet of Things (IoT).

The financial technology industry commits to making economic goods affordable and available to everyone. However, the costs for consumers are dropping to only a few cents because of technological advances. Although this is economical for consumers, it can also become a problem. Credit card issuers and traditional transaction fee-based systems cannot process transactions of such low rates, due to overheads

Because of this, micropayments came into play. During the 1960s, Ted Nelson, a technology futurist and philosopher, coined the term “micropayment.” He envisioned that these tiny financial transactions, as small as a tenth of a penny, would be a way to spend for online content’s copyrights.

The remarkable thing about micropayments is that they enable the development of low-cost networks. There is still much room for growth, but blockchain technology is paving the way to making these transactions secure and cost-effective. Users can buy fractional unit amounts of goods and services through cashless transactions such as micropayment bitcoin.

What is nanopayment?

A nano payment is just like a micropayment. However, the differences are that nano payments are much smaller, and users only pay as they go. Consumers can quickly turn them on and off. A concrete example of this is when you look at online copyrighted photos. It may seem insignificant, but actions like this cost something like 0.1 cents.

Micro and nanopayments operate using Satoshi in the digital world. People use Satoshi because it’s Bitcoin’s most minor division. One bitcoin consists of 100,000,000 Satoshi. Satoshi is also the Bitcoin SV network’s fundamental unit of exchange. To learn more about this, you can check out bitcoin for beginners.

Another instance nanopayments come in handy is when consumers want to read a single article rather than paying an entire month’s worth of subscription. The tiny transaction becomes a nanopayment. In a way, nanopayments follow a pay-per-use model. They come in such small amounts that they seem irrelevant, but they are not free.

The development of distributed blockchain ledgers for cryptocurrencies resulted in a sharp decline in transaction costs. In addition, building nanopayment networks made hundreds of new fractional payment models possible.

Traditionally, the cost of administering online services like email, news, and photo uploading is passed to marketers. However, that can change. Micropayment systems develop prosperous business models based on charges under $1. These developments make small transactions convenient, efficient, and accessible for consumers.

The Importance of Micropayments and Nanopayments

There are many reasons why micropayments and nano payments are important in Bitcoin.

1. Instant and global payments

Making such tiny payments in the digital space is a bit more challenging. It becomes impossible for credit card companies like Mastercard and Visa to process low amounts.

Although micropayments and nanopayments existed before Bitcoin, they were not feasible in the digital world. These transactions only became possible when Bitcoin stepped in. Crash. co-founder, Isaac Morehouse, says, “Bitcoin made instant, global micropayments with no delay, no settlement or anything like that, possible.”

2. Multiple payments at once

The combination of micropayments or nanopayments and Bitcoin meets the level of convenience consumers typically need today. They can seamlessly multi-task, performing numerous transactions at once. In particular, this technology can process up to hundreds of tiny payments simultaneously and in real time. It’s one of the reasons why more consumers should be paying attention to micropayments and nanopayments.

3. Low transaction fees

Many consumers find using credit or debit cards and other banking systems to handle micropayment processing impractical. These companies charge way too much for such small transactions. With Bitcoin, you can enjoy more affordable transaction fees.

The Bitcoin protocol and blockchain technology eliminate third parties in the payment process. The absence of a middleman payment processor makes these operations as low-cost as possible.

4. Unbounded block sizes

Unbounded block sizes are vital in making micropayments possible. The unlimited block sizes also make way for the Bitcoin Satoshi Vision (BSV) network to manage large volumes of unprecedented transactions while maintaining low operation fees.

The BSV blockchain is powered by the original Bitcoin system based on the UTXO (unspent transaction output) architecture. If you were holding unspent outputs of Satoshi tokens, you could make transactions as if you were dealing with real cash. You can split or combine these denominations just as you would with conventional coins and notes.

As part of micropayment processing, it will cover the transaction fee that pays the block’s miner before any change goes back to you.

5. From “dust” to a spendable amount

When you make a payment using Satoshi, amounts too low to be included in a block is referred to as “dust” since the amount is so little compared to the network’s transaction fees that it becomes uneconomical to spend. With BSV, although small, dust can become spendable. “Consolidation transactions” are the way around the limitations of dust.

These transactions fall under a specific category where many inputs with dust are combined and sent to a miner who combines all the pieces into one output that exceeds the dust limit.

Even though the miner would be providing this service free of charge, they would still gain because it would make their datasets easier to manage. As a result, they only need to log one dollar rather than keep track of 100 one-penny transactions.

6. Tradable and trackable

Using Bitcoin in micro and nanopayments offers users and businesses complete control of their money. Only you can transfer money from your digital wallet to any service because a personal Bitcoin address private key protects it from unauthorized transactions.

Not only is your wallet secured, but the nanopayment system also provides transparency over every small transaction entering and leaving your wallet, regardless of how little or frequent it may be. Because of this, it’s easier to track where your money is going.

It is also possible to tokenize revenue shares and trade them with other users. With this setup, you can tap into making this your emergency source of cash.

7. Data as money

If you ever consider making money out of information, micropayments are the way. It’s as simple as leveraging the ability to share bits of data for a fee. For example, you can charge one cent for someone collecting data for a study to see your demographic profile.

Micropayments, coupled with zero-knowledge proofs and other bitcoin technologies for selective data sharing and recording, make this new market possible.

8. Smaller paywalls per access

Since micropayments are small, they entail tiny paywalls. These allow you and any consumer out there to practice pay-per-use or view. For example, if you want to read one article from a digital magazine, you pay for the one time you will look at it. This way, you can avoid expensive monthly subscriptions or membership fees.

6 Business Models That Are Benefiting from Tiny Payments

Tiny payments led to the development of various business models. At the same time, these structures benefited from micro and nano payments.

1. Metered payments

Micropayments are similar to how taxis use meters to ask passengers for an exact amount. Consumers only pay for what they consume, view, listen to, etc. Tiny payments allow you to skip monthly, yearly, or fixed subscriptions. There’s also no need for accounting, batch invoicing, and bookkeeping.

2. Split payments

One of the powerful features of micropayments is the ability to make multiple and split payments. Micropayment processing covers all sorts of transactions, such as auto payroll and revenue shares. These are done simultaneously in real time. Because of this functionality, other business models developed. For instance, gaming websites can facilitate peer-to-peer referrals using micropayments.

3. Tradable revenue shares

Another structure developed in micropayment bitcoin is the option to convert and trade revenue shares. Where the revenue is from some web service which has a micropayment revenue model. For example, you can convert your shares into tokens, then exchange them for cash.

4. Monetized data

You can charge others to view your information or data. For example, people make tiny payments to access information from databases such as blockchains. Advertisers can pay to access your shopping information directly, without going through the model of paying Google or Facebook to steal it.

5. Nano paywalls

A paywall is a technique for limiting access to content and information, such as news. Someone who wants full disclosure must have a paid subscription.

On the contrary, nano paywalls apply to publishers who charge cheaper fees or micropayments per article. Imagine paying 0.1cents for every page that your web browser scrolls down and loads. Nano paywalls are also helpful and cost-efficient in cutting off spam and bots.

6. Ad-free web browsing

You can opt-out of all advertisements by charging micropayments for search and web page retrieval. As a result, you can surf the internet without popups bothering you. In this way, your surfing time has no distractions, and the internet still gets monetized.

Know the Future of Tiny Payments

Micropayments are small online financial transactions that value less than a dollar, while nanopayments are tinier payments that run on a pay-per-use structure. These transactions are possible using Bitcoin, specifically Satoshi. These tiny payments have significant roles in varying industries because they offer a more convenient and transparent way of making small transactions while maintaining low rates.

Several business models were inspired by micro and nanopayments, such as metered and split payments, nano paywalls, and monetized data. If you want to understand Bitcoin and blockchain further, head to the perfect place for beginners: CoinGeek.

In this interview with CoinGeek Backstage, Isaac Morehouse highlights the actual utility of micropayments and how micro-transactions could massively shape the online gaming industry.

Click here to read the full article.

The Unbounded Capital Summit in New York City drew investors, key stakeholders, and enthusiasts from the Bitcoin industry, tackling recent blockchain developments and opening discussions on how entrepreneurs can change the way users interact on the world wide web.

Isaac Morehouse, Co-Founder and Chief Marketing Officer of PartnerHacker, attended as moderator at the Unbounded Capital Summit 2022, wherein he discussed the utility and benefits of using micropayments.

Speaking to CoinGeek Backstage‘s Becky Liggero, Morehouse said he and his team are focusing their efforts working on incorporating micropayments—the single biggest innovation of Bitcoin—in applications rather than developing “crypto” projects, and Bitcoin SV blockchain is the key to helping spur the adoption of small payments online.

“BSV, to my knowledge so far, is the only one that could do that effectively on that scale. That’s why I’m always playing around with it because it works, and it works amazingly,” Morehouse said.

He also emphasized how micropayments do not need additional requirements to work, making transactions instant and simpler.

When asked about the hurdles of adopting micropayments globally, Morehouse cited the public’s lack of knowledge on such transactions, claiming that nowadays, people are more focused on digital currencies that are not capable of micro transactions and do not have true use-cases, including BTC and Ethereum.

“Almost no one knows that it’s (micropayment) is possible yet. As weird as that sounds, it’s been possible since the original blockchain, Bitcoin, came out, and it’s possible today,” said the host of the YouTube series “Tiny payments are a big deal.”

He added that entrepreneurs have started tinkering with business models, but none have so far been successful in getting the idea across the market.

Meanwhile, Morehouse utilized the Summit to introduce his latest project, which he called the “Called It,” a sports betting app that make use of HandCash wallet. Unlike existing apps where bettors pool their money and manually send cash to those at the leaderboards, Called It does all the work automatically and is open to users of all ages for just 10 cents.

While the idea of betting 10 cents for one game may seem small for ordinary bettors, Morehouse said it makes the online gaming and gambling industries more inclusive and minimizes losses.

Closing the interview, Morehouse advised developers, entrepreneurs, and enthusiasts to experiment and take advantage of existing apps to spur micropayment adoption.

“Experiment, try some stuff, get in any of the apps that are out there…get in and experiment and play with them. And if you’re an app developer, come and build something; think about the business models where you can take micropayments, you can take pennies or fractions of pennies, and try experimenting, try building something. To me, that’s like the play and the fun of it,” he concluded.

Watch: Small Payments, Big Fun: Micropayments for Casual Games

SmartLedger introduced no less than eight PoC (proof-of-concept) applications to start the New Year. The feedback from the BSV community has been overwhelmingly positive in just a few days of using these simple applications. I caught up with the Chief Development Office of the company, Gregory Ward, to learn more about them.

Why release so many applications at the start of the New Year?

Gregory Ward: Our main focus last year was building and launching both Certihash Sentinel Node as well as TicketMint. Simultaneously, we were working on many ideas behind the scenes while these applications were being built. Although it was not intentional to launch so many applications at the start of the new year, many of these proof-of-concept(s) took shape during ‘winter recess,’ and we decided what better time to let the community begin to test and use them than the New Year.

How long did it take to develop these applications, on average?

Gregory Ward: Quite honestly, not very long at all. The great thing about the Bitcoin protocol and the many features and functions of scalable blockchain, such as micropayments, immutable data, data signing, (plus many others), is that it is possible to build out a framework that works, and replicate it for many other uses. This enables a team or a developer to create proofs-of-concepts and MVPs fairly quickly.

What is the technology stack used to develop these applications?

Gregory Ward: At first, most of these applications began with the Bitcoin SV JavaScript 1.5 library, HTML, JavaScript, and CSS, with a NodeJS server setup. After proving out concepts, I began integrating Handcash as the login, seeing that it was one of the most popular wallets within the BSV ecosystem.

2023 is already the year for content creators.. #micropayments make sense & cents. https://t.co/2qp5S7PfBR

— Bryan Daugherty (@BWDaugherty) January 2, 2023

Why is 2023 the year for content creators?

Gregory Ward: With applications being able to take advantage of scalable Bitcoin micropayments, on-chain data, digital asset ownership, on-chain publishing, and immutable accounting, I believe we will see a next generation of content creators publishing and monetizing their media in exciting new ways not seen until now, providing increased revenue and more control over their intellectual property.

How does Streamable FM offer up to 10 times the revenue stream capability compared to Spotify?

Gregory Ward: Our current model pays creators/publishers $0.0009 per stream, 3x the revenue of Spotify. We will be offering premium subscriptions as well as advertising opportunities in the near future to further improve revenue capabilities.

After listening to a song on Streamable FM, why am I receiving 500 satoshi micropayments?

Gregory Ward: That is a great question! You receive micropayments to your Paymail address, as it was included as a percentage of publishing for one of the songs published on RareGeneration.com. This application is an amazing example of micropayments adding up in real-time for publishers and content creators, as streams are played on Streamable.FM.

How are payments split and distributed when playing a song on Streamable FM?

Gregory Ward: Rare Generation publishing platform allows content creators/publishers to register media, assign percentages of publishing ownership for both writers and publishers, and publish this information to the Bitcoin SV blockchain/public ledger. This enables Streamable FM to pull the publishing information from an immutable source of truth and pay stakeholders instantly, according to the blockchain registry.

What is up with the encrypted Bitchat messages I have seen on-chain from SmartLedger?

Gregory Ward: We recently released an instant, encrypted version of Bitchat, called MetaMeet.icu, which allows users to create instant private chat rooms, share the URL with query parameters included, and initiate communication. It also has an ‘old school’ ringtone notification sound that can be turned on or off.

Why choose to integrate HandCash as the wallet for each application?

Gregory Ward: Not only do we love the simplicity and user-friendly experience of HandCash, but it made sense to integrate with the most popular wallet in our eco-system. Furthermore, single sign-on solutions like HandCash allow users to easily access the power of the blockchain without having to remember a lengthy private key or set of 12 words. We believe this will help accelerate the adoption of blockchain technology. SmartLedger is actively building ‘Enterprise Elements’ (E2), our own single sign-on solution/Multi-pass Wallet, which we currently feature in our virtual and physical NFT ticketing platform, TicketMint, as well as our cybersecurity detection platform, Certihash Sentinel Node.

How do Verified Votes record a vote on-chain securely?

Gregory Ward: When a ‘Voter’ logs in to Verified Votes to submit a vote for a particular campaign, the platform searches the blockchain for the Campaign TXID to verify the campaign creator, poll question, poll options, as well as campaign start and end date. The user is able to submit a vote on-chain, along with a hash of their device and paymail information, enabling the platform to check and reject subsequent votes by the same user.

With the release of the BSV faucet SatoSender, how do you prevent abuse of the faucet?

Gregory Ward: Users can visit Satosender daily to log in and receive 5000 satoshis. Once a user registers for the first time, they are eligible to win a daily 50k Satoshi giveaway and have a chance to win NFTs, music, and other prizes. In order to prevent abuse of the faucet, we ask permission to see the users’ registered phone numbers with Handcash, and we compare the hash of this to the hash of our stored users, along with the last time they requested Satoshis. This gives us a fairly robust way to protect against attacks. Of course, it is always important as platform creators to be on the lookout for anomalies.

How does PayCircles differ from MetaMeet?

Gregory Ward: Paycircles is a blockchain-powered value distribution platform, where users can create circles of recipients’ Paymail handles & percentages, publish the circle to the blockchain, and retrieve the circle of recipients for future payment. This can be used for applications like Rare Generation Publishing, Project Team member payments, shareholder payouts, and much more. Metameet is an encrypted, verifiable, blockchain-based communication tool. It allows users to generate a unique encryption/decryption key and URL to share with others. By using the blockchain and mempool, we can create instant, encrypted, and verifiable messaging chains. This can be used for contract negotiations, social media, security, and more.

Thank you, Gregory, for taking the time to answer my questions. I hope the readers learned more about SmartLedger and the PoCs they have released.

This article was lightly edited for clarity purposes.

Watch: Sentinel Node partners with IBM to improve cybersecurity

Boardz is a global old-school style social forum where users can discuss various topics and earn Bitcoin SV (BSV) for their content. Users can sign up and use the platform for free and optionally link their HandCash wallet to start earning. I caught up with the creators of Boardz to learn more.

What was your motivation for creating Boardz?

Boardz team: Forum systems are one of the earliest and most efficient forms of social interaction on the Internet, and they are still popular. People need to exchange their knowledge and experiences. But we think that platforms like Reddit and StackExchange, which are constantly dependent on the free contribution of their users, have no place in the new Internet paradigm. Advancements in online payments, such as Bitcoin micropayments, allow for better models to be developed. So these old platforms will either evolve or slowly lose their quality and popularity.

Boardz’s aim is to enable an information economy in the form of a well-categorized global forum system. It means that a post or an answer to a question can be locked behind a paywall until the reader makes a small payment for that specific post. Thus, for example, a software developer will be able to make money by answering programming questions. We think that this model is much superior to what StackOverflow currently offers to people.

Why is it important that Boardz is “not an app for Bitcoin users by Bitcoin users” but for “everyone”?

Boardz team: The Bitcoin SV community and every other cryptocurrency community are small and extremely obsessed with their ideologies. If a project is dedicated only to satisfy a little community, it’s already dead.

We want to change the way forum systems work like never before by leveraging micropayments and blockchain technology. That is only possible with Bitcoin SV.

What drove the decision behind having such a large budget (80 BSV) for the Rewardz program?

Boardz team: We ran similar content-based platforms before, and we know how hard it is to incentivize early contributions. Boardz should grow while we are coding our main features. We’re trying to pay for every good post and engageable content on Boardz. The BSV community should consider moving some of their daily discussion to Boardz. They will both earn money and contribute to a BSV-native platform.

Why do you want to integrate NFT profile pictures?

Boardz team: Profile pictures have always been an important part of a “forum experience.” People like expressing themselves in this way. NFTs (non-fungible tokens) have the potential to take this a step further, as they are exclusive to their owners.

Do you see Boardz as a competitor to Reddit?

Boardz team: In (the) long term, yes.

Will Boardz issue their own customized NFT like Reddit’s CryptoSnoos and/or integrate other existing NFTs on BSV?

Boardz team: Possible, but we want to start with the existing ones. There are already great NFT collections on BSV.

Which token protocol(s) are you considering issuing the NFTs on and why?

Boardz team: We are considering using RUN or Sigil. There are many good projects and NFT collections using them.

How can Boardz distinguish themselves from other social media applications that integrate with Bitcoin?

Boardz team: By doing things right. We think that Boardz has a clear advantage in terms of social inclusion, there is no barrier of entry. We are less ideological and more pragmatic than many of them.

What type of content do you envision users leveraging paywalls for?

Boardz team: It will probably start with technical topics like programming, operating systems, software, trading/technical analysis etc.; and continue with the intellectual ones like philosophy. Some topics, like daily stuff, will always be more suitable for free access.

How will letting users create custom boards work?

Boardz team: It’s not clear yet, but it will be done definitely in an incentive-compatible model.

Other than the features you already stated on were in the works, what other features are planned?

Boardz team: We don’t want to reveal our entire plan but okay, one more hint! We will continue to open up Boardz to other languages after a certain threshold. The software is ready, what we need is more people!

Thank you, Boardz, for taking the time to answer my questions. I hope the readers learned more about the platform. Check it out here.

This article was lightly edited for grammatical purposes.

Watch: The BSV Global Blockchain Convention presentation, Buzzmint: Elevating NFTs

Jackson Laskey believes that NFTs and micropayments form a greater economy allowing games to generate revenue and developers to contribute to gaming ecosystems.

Click here to read the full article.