As posted on Reddit, there are now 20,000,000+ addresses holding $1 or more of Bitcoin. The wallets holding the $1 are considered dead because it costs more to move the cash in terms of fees. If Bitcoin micropayments were affordable though, there would be fewer accounts holding money that could be used for retail purchases.
Despite recent weakness, Bitcoin is trending higher. Encouragingly, there are predictions that this could Bull Run could push it to the $100,000 mark. The excitement over its value aside, crypto users on Reddit are taking on a rather unpleasant facet of the digital asset.
Affordable Bitcoin Micropayments Still A Dream
Bitcoin has miles to go before it can fulfill the cypherpunk vision of anonymous digital cash. Posted on activism.net it asks like-minded people to:
“Come together and create systems which allow anonymous transactions to take place. People have been defending their own privacy for centuries with whispers, darkness, envelopes, closed doors, secret handshakes, and couriers. The technologies of the past did not allow for strong privacy, but electronic technologies do”.
The decree further adds:
“Cypherpunks are dedicated to building anonymous systems. We are defending our privacy with cryptography, with anonymous mail forwarding systems, with digital signatures, and with electronic money”.
It is nevertheless, impossible to fulfill this mandate when the reality on the ground does not enable actual adoption. Vitalik Buterin has in the past decried the clamor for Bitcoin ETFs saying that they will not make it easier for crypto users to buy minim amounts of crypto. Vitalik says that ETFs can pump crypto prices, but crypto micro-purchases and payments are better for mass adoption.
A decade down the line it is still easier to purchase your beer with a credit card or fiat than in crypto. In sharp contrast, crypto micropayments were once touted as cheaper alternatives to credit cards. Bitcoin payments were going to revolutionize the industry, but P2P fees have hit various speed bumps.
Off-Chain Bitcoin Micropayments Solutions
The massive amounts of transaction fees are the most significant deterrent. These costs have in the past doubled those that come from low-value card transactions. This has been the cost to the high-level of censorship resistance of the Bitcoin network. The prices of running nodes increase as the number of transaction rise too.
To help crypto compete with traditional payment methods such as MasterCard, Visa or PayPal, off-chain solutions have been fielded. Solutions such as the Lighting Network will, for instance, add a layer to the Bitcoin blockchain that will enhance micro-payments speeds. The fees will also be lower.
The Blockstream Lightning Network will not only support high of volumes of micro transactions but real-time payment as well. The Raiden Network will complement ETH payments as well as other ERC20 Token payments. It is creating a global payment network for all crypto users worldwide. Besides, Plasma and Sharding could also address the crypto scaling problems.
These are indications that Bitcoin will one day fulfill the cypherpunk vision of anonymous digital cash. Crypto users and developers have a lot of work to left to do. Challenges from world governments over regulation and control make the process much harder. However, off chain solutions are maturing by the day and sensible crypto micropayments could soon become a reality.