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Absolutely incredible news. Micropayments are one of the paths out of advertiser hell and were one of the original dreams of many crypto nerds and advocates.

by blhack 5y ago

Absolutely incredible news. Micropayments are one of the paths out of advertiser hell and were one of the original dreams of many crypto nerds and advocates. I still think that twitter is pure mind cancer, but I have to give it to Jack on this. Great move, and something I hope gets repeated to the rest of the web. For those who aren’t very familiar with the crypto space: this uses a bitcoin side chain called lightning; transactions are effectively free and instant, but still denominated in BTC.

deleted 5y ago
[deleted]
fighterpilot 5y ago
Do we know why they're not doing it off-chain, similar to the way a crypto exchange will transfer crypto from one user to another off-chain?
- bmking 5y ago
  Lightning network is "off-chain". Basically a network of 2-of-2 locked bitcoins called _channels_ that exchange valid Bitcoin transactions to update the balances within these channels, but only need to settle them by broadcasting them to the Bitcoin network in case of disputes.
- blhack 5y ago
  I don’t know the specifics of this, but: Because they don’t need to. My guess is that you just associate a lightning address with your username, and all Twitter does is present that to a wallet. This way twitter doesn’t need to do KYC, or ever hold any funds. They’re just the phone book.
  - xur17 5y ago
    I'm guessing they also don't want to. If they took custody of the Bitcoin, I believe that would make them a MSB, and hence get to do all of the "fun" associated with that. Also, the additional security and financial implications of holding money for their users.
  - kokomjolk 5y ago
    LN doesn't have addresses, it has invoices that can't be reused.
    - zapdrive 5y ago
      Exactly. LN is like opening a "tab" in a bar. You ultimately settle on the chain, just like how you settle the final tab on your credit card. LN is an unnecessary solution to a made up problem. Other cryptos have proved that much much more transactions can be easily processed by merely increasing the blocksize.
      - bradwood 5y ago
        Increasing the blocksize makes running a node much more expensive (due to storage, mainly) which in turn makes the network less decentralised. Bitcoin (rightly) selects for decentralisation over transaction speed, hence LN as an L2...
        zapdrive 5y ago
        Bitcoin blockchain size: 350 gb 12tb harddrive: $199. Bitcoin blockchain is increasing at less than 100gb per year. The storage cost of 100gb is about $1.6 I'm sure people running nodes can spend more than 1.6 a year to store a bigger chain.
        oars 5y ago
        Thank you for doing the math.
        gwicks56 5y ago
        As someone who runs a full node, this is not accurate at all. Space is cheap, bandwidth is expensive. I frequently upload > 1TB a month via my full node, if blocks were twice as big and full, then I would be uploading > 2TB a month. How many people in the world have an internet connection which can handle that? Then you have to process each block, the bigger they are, the most computation needs to be done. Everything is a trade off, Bitcoin has chosen decentralization over throughput, other chains have chosen differently.
- fksadfji12 5y ago
  Because it already comes out of the box with bitcoin/lightning.
- mraudiobook_com 5y ago
  LN is off chain, that's the whole point, LN is a custodial solution to the problem Blockstream introduced when they introduced the block size limit. Bitcoin Cash is the on chain solution, LN is just as centralized as PayPal.
- satronaut 5y ago
  they're doing it via lightning, which is off-chain until payment channels are settled.
  - zapdrive 5y ago
    But you still have to make a transaction to open a channel.
snarf21 5y ago
Leaving BTC and lighting aside, I don't think most people would opt out of ads in favor of micro payments. There is a minority who have the money that would but I see nothing in society that points to making such a change possible. Do you have any studies that show people would pay for news/socials/etc. in exchange for no ads/tracking/+privacy? Even the paid streaming services have ads and even when you pay, I'm sure they are still selling tracking data.
- chrisfosterelli 5y ago
  Perhaps not everybody, but this is a core business model for a lot of mobile apps. "Pay and we remove the ads". I've paid for quite a few apps just to get the ads out of the way.
- blhack 5y ago
  Many people already have opted out of ads. People like Glenn Greenwald and Matt Taibbi who have massive, lucrative substacks, for instance. Many others have done patreon. Many, many youtube creators and podcasters have strong incomes due to that.
  - thrashh 5y ago
    What percentage of regular people participate in these schemes though?
    - albertsondev 5y ago
      What percentage of regular people would participate in this new scheme, though?
      - atatatat 5y ago
        Why are we considering these regular people when this is becoming the new regular?
- trident5000 5y ago
shawn-butler 5y ago
Isn't this what Brave tried doing in their browser circa 2016? Doesn't seem like micropayments fit the current consumer mindset the way periodic subscriptions do.
- em3rgent0rdr 5y ago
  lightning network wasn't available in 2016. Lightning network makes micro-transactions feasible with bitcoin by almost eliminating the fee.
- wmeredith 5y ago
  Yes, but Brave made their own token (BAT)
arcticbull 5y ago
Micropayments are something we’ve had available to us forever, there’s no reason a custodial wallet like PayPal can’t offer them - or couldn't have offered them at any point in the last two decades. People don’t want them. And they certainly don’t want them at up to $60 a pop haha. Or over LN which still requires an on chain transaction to open a channel. Nick Szabo has a great write up that outlines my thoughts exactly [1] [1] https://nakamotoinstitute.org/static/docs/micropayments-and-mental-transaction-costs.pdf https://nakamotoinstitute.org/static/docs/micropayments-and-...
- maccolgan 5y ago
  The reason that people typically don't accept tips in anything but crypto is that it would eliminate the pseudonymity that crypto would offer...
  - cwkoss 5y ago
    Also accepting tips via CC exposes you to chargebacks, were people can actually financially damage you (ex. they donate and chargeback, they get their money back, you get nothing + a ~$20 chargeback fee)
    - panarky 5y ago
      Also credit cards are an extraordinarily expensive way to send fifty cents. Stripe charges 2.9% plus 30 cents per successful transaction. So your fee on a fifty cent micropayment would be 63%. The lightning network would be free or perhaps one sat, which would be 0.08% of a fifty cent transaction.
- thinkmassive 5y ago
  Nobody used micropayments when they were a hassle. Today there are already Lightning-based apps breaking down that barrier, live in production using mainnet BTC. Spinx[0] and Zion[1] are chat apps that offer room hosts the option to set a fee for joining and/or sending messages to a channel, for the purpose of spam reduction. Another cool feature already live in the app is pay-per-minute streaming of podcasts and videos. [0]: https://sphinx.chat/ https://sphinx.chat/ [1]: https://www.getzion.com/ https://www.getzion.com/
Geee 5y ago
Lightning Network is not a side chain. It's basically a way to interactively update transactions between nodes before they're broadcasted and settled on blockchain. It forms a network where payments are routed through nodes without having to trust anyone. It's scalable and private.
- zapdrive 5y ago
  You conveniently forgot to mention that you have to have a lightning node connected to the network 24/7 to protect yourself from fraud. Or, you have to use and trust a third party node.
  - pontus 5y ago
    Can you elaborate on this? I was under the impression that each update had to be signed. Why then would you have to be connected 24/7 to protect yourself from fraud?
    - zapdrive 5y ago
      A dishonest node can try to settle an outdated state of the channel on the main chain. You have 24 hours to stop that from happening. So, if your node is offline for longer than 24 hours, you could lose all the money tied up in the channel.
    - gwicks56 5y ago
      Everytime the balance in the channel is updated, a new transaction is created and signed. If one party in the channel publishes an old state ( which they could have more bitcoin than they should), you have to be online to detect it and publish the latest one, in which case they lose all their bitcoin for publishing an old state as punishment. Technically you don't need to be online 24/7, just often enough to detect the fraud before the timeout, default is two weeks I think. Or you can pay someone a tiny fee to monitor the blockchain for someone publishing an old state for you. In practice, nobody is trying to commit fraud, because : a) if you get caught you get punished severely b) most channels do not have enough BTC in them Lightning is for small, instant, fast payments, average channel size is about 0.02 BTC. The bigger problem is how to maintain up to date backups, and not accidentally publish an old state when recovering from a crash. We're working on it. Taproot bitcoin upgrade brings some interesting improvements we can build upon to improve things further. EDIT: forgot to mention this is only really a problem if you want to run your own non custodial solution ( which I do). For most people, using a 3rd party custodial solution for their low balance hot wallet seems to be the norm.
space_rock 5y ago
People that call bitcoin "crypto" are likely to describe bitcoin technology incorrectly
- d0gbread 5y ago
  This is a cynical stub of a thought if I've ever seen one. Say more?
  - atatatat 5y ago
    Crypto is (was? ugh.) cryptography, for starters.
  - space_rock 5y ago
    Crypto are the projects created to market themselves as decentralised bitcoin clones. They are projects controlled by a small group of insiders that run pump and dump and wash trading scams.

by blhack 5y ago

deleted 5y ago

[deleted]

fighterpilot 5y ago

Do we know why they're not doing it off-chain, similar to the way a crypto exchange will transfer crypto from one user to another off-chain?

bmking 5y ago
Lightning network is "off-chain". Basically a network of 2-of-2 locked bitcoins called _channels_ that exchange valid Bitcoin transactions to update the balances within these channels, but only need to settle them by broadcasting them to the Bitcoin network in case of disputes.
blhack 5y ago
I don’t know the specifics of this, but: Because they don’t need to. My guess is that you just associate a lightning address with your username, and all Twitter does is present that to a wallet. This way twitter doesn’t need to do KYC, or ever hold any funds. They’re just the phone book.
- xur17 5y ago
  I'm guessing they also don't want to. If they took custody of the Bitcoin, I believe that would make them a MSB, and hence get to do all of the "fun" associated with that. Also, the additional security and financial implications of holding money for their users.
- kokomjolk 5y ago
  LN doesn't have addresses, it has invoices that can't be reused.
  - zapdrive 5y ago
    Exactly. LN is like opening a "tab" in a bar. You ultimately settle on the chain, just like how you settle the final tab on your credit card. LN is an unnecessary solution to a made up problem. Other cryptos have proved that much much more transactions can be easily processed by merely increasing the blocksize.
    - bradwood 5y ago
      Increasing the blocksize makes running a node much more expensive (due to storage, mainly) which in turn makes the network less decentralised. Bitcoin (rightly) selects for decentralisation over transaction speed, hence LN as an L2...
      - zapdrive 5y ago
        Bitcoin blockchain size: 350 gb 12tb harddrive: $199. Bitcoin blockchain is increasing at less than 100gb per year. The storage cost of 100gb is about $1.6 I'm sure people running nodes can spend more than 1.6 a year to store a bigger chain.
        oars 5y ago
        Thank you for doing the math.
        gwicks56 5y ago
        As someone who runs a full node, this is not accurate at all. Space is cheap, bandwidth is expensive. I frequently upload > 1TB a month via my full node, if blocks were twice as big and full, then I would be uploading > 2TB a month. How many people in the world have an internet connection which can handle that? Then you have to process each block, the bigger they are, the most computation needs to be done. Everything is a trade off, Bitcoin has chosen decentralization over throughput, other chains have chosen differently.
fksadfji12 5y ago
Because it already comes out of the box with bitcoin/lightning.
mraudiobook_com 5y ago
LN is off chain, that's the whole point, LN is a custodial solution to the problem Blockstream introduced when they introduced the block size limit. Bitcoin Cash is the on chain solution, LN is just as centralized as PayPal.
satronaut 5y ago
they're doing it via lightning, which is off-chain until payment channels are settled.
- zapdrive 5y ago
  But you still have to make a transaction to open a channel.

snarf21 5y ago

Leaving BTC and lighting aside, I don't think most people would opt out of ads in favor of micro payments. There is a minority who have the money that would but I see nothing in society that points to making such a change possible. Do you have any studies that show people would pay for news/socials/etc. in exchange for no ads/tracking/+privacy? Even the paid streaming services have ads and even when you pay, I'm sure they are still selling tracking data.

chrisfosterelli 5y ago
Perhaps not everybody, but this is a core business model for a lot of mobile apps. "Pay and we remove the ads". I've paid for quite a few apps just to get the ads out of the way.
blhack 5y ago
Many people already have opted out of ads. People like Glenn Greenwald and Matt Taibbi who have massive, lucrative substacks, for instance. Many others have done patreon. Many, many youtube creators and podcasters have strong incomes due to that.
- thrashh 5y ago
  What percentage of regular people participate in these schemes though?
  - albertsondev 5y ago
    What percentage of regular people would participate in this new scheme, though?
    - atatatat 5y ago
      Why are we considering these regular people when this is becoming the new regular?
trident5000 5y ago

shawn-butler 5y ago

Isn't this what Brave tried doing in their browser circa 2016? Doesn't seem like micropayments fit the current consumer mindset the way periodic subscriptions do.

em3rgent0rdr 5y ago
lightning network wasn't available in 2016. Lightning network makes micro-transactions feasible with bitcoin by almost eliminating the fee.
wmeredith 5y ago
Yes, but Brave made their own token (BAT)

arcticbull 5y ago

Micropayments are something we’ve had available to us forever, there’s no reason a custodial wallet like PayPal can’t offer them - or couldn't have offered them at any point in the last two decades. People don’t want them. And they certainly don’t want them at up to $60 a pop haha. Or over LN which still requires an on chain transaction to open a channel. Nick Szabo has a great write up that outlines my thoughts exactly [1] [1] https://nakamotoinstitute.org/static/docs/micropayments-and-mental-transaction-costs.pdf https://nakamotoinstitute.org/static/docs/micropayments-and-...

maccolgan 5y ago
The reason that people typically don't accept tips in anything but crypto is that it would eliminate the pseudonymity that crypto would offer...
- cwkoss 5y ago
  Also accepting tips via CC exposes you to chargebacks, were people can actually financially damage you (ex. they donate and chargeback, they get their money back, you get nothing + a ~$20 chargeback fee)
  - panarky 5y ago
    Also credit cards are an extraordinarily expensive way to send fifty cents. Stripe charges 2.9% plus 30 cents per successful transaction. So your fee on a fifty cent micropayment would be 63%. The lightning network would be free or perhaps one sat, which would be 0.08% of a fifty cent transaction.
thinkmassive 5y ago
Nobody used micropayments when they were a hassle. Today there are already Lightning-based apps breaking down that barrier, live in production using mainnet BTC. Spinx[0] and Zion[1] are chat apps that offer room hosts the option to set a fee for joining and/or sending messages to a channel, for the purpose of spam reduction. Another cool feature already live in the app is pay-per-minute streaming of podcasts and videos. [0]: https://sphinx.chat/ https://sphinx.chat/ [1]: https://www.getzion.com/ https://www.getzion.com/

Geee 5y ago

Lightning Network is not a side chain. It's basically a way to interactively update transactions between nodes before they're broadcasted and settled on blockchain. It forms a network where payments are routed through nodes without having to trust anyone. It's scalable and private.

zapdrive 5y ago
You conveniently forgot to mention that you have to have a lightning node connected to the network 24/7 to protect yourself from fraud. Or, you have to use and trust a third party node.
- pontus 5y ago
  Can you elaborate on this? I was under the impression that each update had to be signed. Why then would you have to be connected 24/7 to protect yourself from fraud?
  - zapdrive 5y ago
    A dishonest node can try to settle an outdated state of the channel on the main chain. You have 24 hours to stop that from happening. So, if your node is offline for longer than 24 hours, you could lose all the money tied up in the channel.
  - gwicks56 5y ago
    Everytime the balance in the channel is updated, a new transaction is created and signed. If one party in the channel publishes an old state ( which they could have more bitcoin than they should), you have to be online to detect it and publish the latest one, in which case they lose all their bitcoin for publishing an old state as punishment. Technically you don't need to be online 24/7, just often enough to detect the fraud before the timeout, default is two weeks I think. Or you can pay someone a tiny fee to monitor the blockchain for someone publishing an old state for you. In practice, nobody is trying to commit fraud, because : a) if you get caught you get punished severely b) most channels do not have enough BTC in them Lightning is for small, instant, fast payments, average channel size is about 0.02 BTC. The bigger problem is how to maintain up to date backups, and not accidentally publish an old state when recovering from a crash. We're working on it. Taproot bitcoin upgrade brings some interesting improvements we can build upon to improve things further. EDIT: forgot to mention this is only really a problem if you want to run your own non custodial solution ( which I do). For most people, using a 3rd party custodial solution for their low balance hot wallet seems to be the norm.

space_rock 5y ago

People that call bitcoin "crypto" are likely to describe bitcoin technology incorrectly

d0gbread 5y ago
This is a cynical stub of a thought if I've ever seen one. Say more?
- atatatat 5y ago
  Crypto is (was? ugh.) cryptography, for starters.
- space_rock 5y ago
  Crypto are the projects created to market themselves as decentralised bitcoin clones. They are projects controlled by a small group of insiders that run pump and dump and wash trading scams.