3 Practical Business Use-Cases For Blockchain (Part 2): Micro-Content Subscriptions
In the previous issue of this series, I discussed the difference between micropayments and nanopayments (in the games industry).
Micropayments are typically less than a dollar (unless you're Paypal and call them anything less than $10-$12) and nanopayments are even tinier (e.g. 0.00001 Satoshis).
This post will cover examples of traditional micropayment services, how blockchain can expand use cases even further, and how these relate to future micro-content subscriptions.
What are micropayment services?
Micropayment services are often divided into four categories.¹ These categories include:
You might not often think about them this way, but micropayment services did and do exist (without blockchain):
Paying per minute to call a toll number (e.g. physical coins)
Paying a phone bill via SMS
Transactions less than $12 via Paypal (although I feel like this one's a bit of a stretch because it's only available in selected currencies, and fees are relatively high)
In the above use cases, much work has been done to make the front-end user experience as smooth as possible. So, for the most part, you don't often experience any issues.
However, these services have some limitations, especially if done without a bank-approved card.
Account holders left vulnerable if sensitive account info is compromised
Account holders could lose their money if the vendor/processor is dishonest
Single purchases may cost more than a combined larger purchase¹
Auditing becomes cumbersome with micropayments
But what could blockchain possibly do to help push these use cases even further?
Blockchain-Based Micropayment Services
So we've established that micropayment services existed before blockchain entered the scene. But how does blockchain improve such services, practically?
Right now, it's still quite expensive to transfer small amounts between individuals, let alone bank accounts. This isn't that big of an issue for those who earn a lot of money. But for those in poorer parts of the world, it leaves them without the ability to trade digitally (aka the "unbanked").²
Blockchain is simply put a public digital ledger (using a chain of digital signatures). Bitcoin, Ethereum, etc. are different implementations of blockchain technology. But each project pursues different aims. The original Bitcoin aimed to make micro (and even nano) payments feasible as an "electronic cash system", by lowering transaction costs and creating an economic solution to a technical problem: double-spending.³
In 2022, there are a few services that could benefit from blockchain-based micro or nano payment services:
News site paywalls
Blog site paywals
Video sites / ads
Let's expand on news site paywalls.
Due to the rise and predictability of subscription services, companies worldwide have switched from traditional licensing services to SaaS (Software-As-A-Subscription). However, subscription services don't work as well for some companies and industries. So although it's trendy, it isn't always the best solution.
An excellent example of this is news sites.
With news sites today, especially the reputable ones, you may often find yourself hitting a paywall after reading a few articles. Sometimes even before you start reading. Unfortunately, this closes off more reliable sources of information and leaves others open to increased "fake news" and misinformation.
However, the issue with subscription models for news sites is that a reader may not necessarily want to signup for a monthly subscription to read just one article.
To improve the user experience, it would make more sense to give the option to pay a micropayment for one piece. In the long run, the user can then "upgrade" to an ongoing membership if there's enough good content they keep returning for.
Here are some basic maths to it:
1 news site article = $1 to read
News site subscription = $10/mo (unlimited articles)
User reads 15 articles per month on average ($15)
User realizes this then subscribes (now saving $5/mo)
Using traditional payments, you may get charged a minimum of 10c (10%) to pay $1. Using blockchain-based micropayments, you'd only get charged something as negligible as $0.00001 (so feels free).
Can you see how this could then be applied to other use cases?
Micro-content is typically written copy, imagery and/or video content that can be consumed in 10-30 seconds or less.⁴ You may be used to this type of content on platforms like Twitter (280 characters) or even TikTok (3 minutes).
But imagine if you could get paid per tweet, per view, or even per second. That's what blockchain can start to make a reality, increasing potential revenue streams.
Below are some future scenarios where micro or nanopayments could become quite lucrative for "micro/nano-preneurs":
Proof-reading a document (per correction)
Sentiment correction of tweets for Machine-Learning algorithms
Micro-access to specific segments in articles (per paragraph)
Recording whale vocals for scientific research (per sound byte)
Recording village weather patterns using a smartphone for meteorologists (per upload)
Some exciting projects in the blockchain ecosystem already highlight some of these future possibilities. Here are a few:
BitPost - pay per article, earn per like/comment
Twetch - pay/earn per post, like, comment, share, re-share
Streamanity - pay/earn per second of video watched
And even in the Machine-Learning (ML) space, you can see the practical usage of per unit charges, based on usage, like this subscription charge for Midjourney:
Hopefully, you can see why a scaleable, low-fee blockchain is required to make most of the above scenarios work.
Sadly, even the most popular blockchains of today (e.g., BTC, ETH, SOL) don't scale, suffer from high fees, and experience network outages. However, there are a few relatively unknown projects that I predict will start to become more prominent as the market realizes some of the fundamental flaws of current, popular blockchains.
Since we're not used to some of the business models this article shares, we must wait to see what plays out in the broader ecosystem over the next 10-15 years.
What micro-content use cases could you apply to your business today? Feel free to share in the comments below.
What is a micropayment? | Moneymailme
Blockchain and the unbanked | IBM
What is double-spending? | Investopedia