I recently found Mark Andresse’s article on Bitcoin (BTC) in 2014. In many ways, he is a visionary (no wonder). I have been in the industry for about four years, with most of my focus on the blockchain social impact. A.D. I am amazed that in 2014, before there was any institutional presence in Bitcoin – or in fact, a popular understanding of this new technology – it was possible to outline the economic and social implications for Andresen in the future.
About eight years after he wrote the words, I would like to mention one of the topics in the article: Micro Payment. I will explore how blockchain transforms micro-payments and therefore some aspects of the business that need to be addressed can not only generate revenue but also help the most vulnerable in society.
Micro payments
Microfinance is not a new concept. Since the mid-1990s, micro-payments have experienced different levels of popularity. By definition, micro-payments are transactions worth less than a certain limit. Essentially, below that limit, the transaction costs a significant portion of the total transaction value and, as a result, are not economical. Another important aspect is that due to the small amount of money, micro-payments refer only to digital transactions of non-real goods. Any additional hosting and transportation costs may indicate a hundredfold increase in the original transaction price, which is totally irrelevant.
Credit card companies offer a variety of pricing plans for merchants. These plans usually include the one-time total paid per transaction and the percentage paid. Not surprisingly, this information is not readily available from their own card companies, but rather published by others who compare these prices as merchants. In that context, let us consider what a merchant pays for a microwave.
We estimate the following:
ተኛው We found a minimum transaction value of 1.29% and no one-time fee.
● The smallest construction block (most) of the Fite currencies is 1/100 – ie, $ 0.01 – this is more than 1.29%, but the credit card company charges the lowest.
By calculating the transaction fee according to the transaction value, you will find the table below. For example, a $ 0.01 transaction costs 100%, while a $ 0.10 transaction costs only 10%. Naturally, this shows that it is unreasonable to conduct micro-transaction transactions in these payment platforms.
Blockchain has a solution.
However, now there is an option. Blockchain technology provides the perfect solution for micro-payments for a number of reasons. It provides the infrastructure for fast-paced digital payments, and, importantly, the minimum payment unit for both Bitcoin and Ether (STH) is surprisingly small.
In addition, a mobile phone, laptop or other Internet device can easily be encrypted in any digital device. And while payments can vary greatly on different networks and in different cases, payments are not a matter of multiple protocols and can reach up to a hundred fractions.
Last but not least is the user’s privacy. Because of the unbalanced encryption of the blockchain, the payer only exposes them. Public The address at the time of payment, which does not provide any information to anyone who wants to hack their wallet. Unfortunately, it will not be the same for credit card transactions, which allows the payer to share their full credit card number and hope that the payment platform is properly protected.
Matching The cryptocurrency industry has damaged royal privacy.
Real use for micro-payments
Now that the technology is covered, there is only one question left. Can I get anything for a million dollars? Well, I’m not sure about a million, but there are a lot of usage issues with microfinance. Below are a few.
Optional from the subscription model option: There is no point in using online content and repeating the economic reasons behind the subscription model for success, video content, music, newspapers, etc. in recent years. Although there are many benefits to this model, it is not perfect. And it still has some warnings. For example, what if someone wants to buy only one item instead of one? Suppose Alice found an interesting article in the third article in two online magazines. You will not be able to register for the third time, even if you agree to pay for that article only. According to the magazine, the article already exists, so why not pay someone? Micro payment allows both Alice and the magazine to maximize their economic benefits.
Digital copyright, royalties and referrals As before, there is no need to explain what copyright, royalty payment or referral are. Unlike modern complex solutions, microfinance provides a relatively simple method for quick settlement with a small amount of money for each payment.
IoT Transactions Crisis- This issue of use is a multi-faceted issue, although it soon became commonplace as a light switch. So far, the IoT has matured to its full potential. One possible reason for this delay is the lack of a simple, easy-to-implement revenue generation model. Microwave payments on blockchain may be the answer. Think of all the information that can be collected in your car, from road conditions to traffic and more. Instant sharing of information gathered by mass users can be useful for traffic planning and road maintenance. And why not pay for it? Blockchain Value is an improved way to anonymously protect the data and protect user privacy – again, a winning combination. Naturally, this can be done with any IoT device, from smart meters to furniture and more.
Social influence This is the most direct use case on this list (and, obviously, my favorite). Microfinance payments on blockchain can be revolutionary in two aspects. The first is that recipients can easily set up accounts to receive money, which allows donations Directly For them, by cutting all the intermediaries and additional costs. Having said that, this behavior is a double-edged sword and may be the main damage. It is just as easy for fraudsters to set up fake accounts to entice donors. In order to ensure and provide better visibility to donors, it is necessary to rate and audit charities similar to online services that are rated by many criteria (such as Charity Navigator, Smart, Charitable Council, etc.). In addition, since the minimum donation is not an issue, we will consider micro donations. The World Bank has classified a country with a per capita income of less than $ 1,025 as “low income.” By contrast, this means a daily wage of less than $ 3. According to 2020 data, there are 27 low-income countries. Microfinance can provide an excellent way to monitor fraudulently donating money to needy people in those countries. I think you can see how this can lead to greater efficiency and more direct impact if it is well managed.
Matching Digitalization of charity: We can do better by doing good
Over the past few years, microfinance has lost some of its original value. Although the concept has been around for a long time, technology has lagged behind and prevented it from becoming a reality. Andresen was right and revolutionary, emphasizing the ability to change blockchain microfinance. Here, I scratched his face in terms of usage issues and potential.
Businesses can be more efficient and generate more of their supply. Without direct and indirect assistance, entire communities can be transformed or removed from economic stress. Thanks to Andresen’s vision eight years ago – blockchain could be the breath of fresh air the world is waiting for.
This article does not contain investment advice or suggestions. Every investment and business venture involves risk, and readers should conduct their own research when making decisions.
The views, opinions and opinions expressed herein are the sole property of the author and do not necessarily represent the views and opinions of copyright.
Netta Korin He is the co-founder of the Orbs and Hexas Foundation. Prior to Orbes, Neta served as a senior adviser to General Mordochai Hodg on the Israeli Defense Ministry’s special projects and as a senior adviser to Michael Oren, the deputy minister for diplomacy in the prime minister’s office. Neta started her career at Wall Street as an investment banker and later became the manager of the hedge fund. She has extensive experience in charity and has served on various boards in Israel and the United States for more than 15 years, holding senior positions on executive committees.