Wednesday W.O.W - Micro-Payments 🔎🧾💸
[4 min read] Your mid-week bite sized treat on emerging tech on our journey to the Metaverse. Learn about how making micro payments, frictionlessly in 2 directions, transforms aspects of society
A nibble of knowledge in your inbox every Wednesday with a simple format:
🇼 What the technology is
🇴 Objective(s) - what is it trying to achieve, with some examples
🇼 Why it is important to users as well as businesses & brands.
This is week 32 of the 520 weeks of writing I have committed to, a decade of documenting our physical and digital lives converge.
In this week’s edition, my goal is to demystify the concept of micro-payments, explore their objectives and use cases, and understand how they can potentially reshape aspects of our future society. We will also delve into the concept of frictionless, bidirectional, arbitrary value flow and the disruptive potential of learn-to-earn in education in particular.
🇼 What are Micro-Payments?
Micro-payments are small digital transactions involving low monetary values, typically under a dollar.
They have become more popular with the rise of cryptocurrencies that enable fast and low-cost transactions, making micro-payments feasible.
Micro-payments eliminate high fees associated with traditional payment methods. They allow for the purchase of digital goods, services, or content that were previously uneconomical.
Micro-payments are reshaping the digital economy, promoting inclusivity and economic participation.
🇴 What objectives do Micro-Payments strive to achieve?
Micro-Payments allow value flow that is Frictionless, Bidirectional, and Arbitrary:
Frictionless: Micro-payments enable seamless and effortless transactions, without the need for cumbersome processes or high transaction fees.
Bidirectional: Micro-payments facilitate the flow of value in both directions, allowing individuals to both pay for goods and services and receive compensation for contributing value or completing tasks.
Arbitrary: Micro-payments allow for transactions of any value, no matter how small, enabling individuals to engage in economic activities at a granular level (even 1/30th of a cent!)
Micro-payments offer a wide range of use cases, let's explore some examples:
Rewarding Content Creators: Support your favourite content creators by tipping them small amounts for their valuable work (micro-tipping) or paying for individual articles instead of full subscriptions.
Gaming: Enhance your gaming experience by purchasing in-game items or accessing exclusive content through micro-payments. Gamified learning experiences with micro-payment rewards can be used to teach consumers about a product or service (more on this below)
Social Media: Show appreciation to creators on social media platforms by micro-tipping for their engaging posts or videos.
Pay-Per-Use: Instead of committing to full subscriptions, enjoy specific pieces of content by making micro-payments for movies, music, articles, or other forms of entertainment.
Several solutions cater specifically to facilitating micro-payments within the crypto ecosystem. Let's take a brief look at two prominent examples:
Lightning Network: A second-layer protocol built on top of the Bitcoin blockchain that enables almost instantaneous and low-cost micro-payments through payment channels. It ensures scalability and efficient processing without burdening the main blockchain.
Raiden Network: Designed for the Ethereum blockchain, the Raiden Network provides similar functionality to the Lightning Network, allowing for secure and fast micro-payments within the Ethereum ecosystem.
🇼 Why might Micro-Payments play a role in the future of society?
While the benefits of micro-payments are evident, widespread adoption faces some hurdles. Regulatory frameworks struggle to keep up with the fast-paced world of cryptocurrencies, slowing their integration into mainstream financial systems.
Despite these challenges, the potential impact of crypto-powered micro-payments on society is immense. As more people embrace micro-payments, opportunities for businesses and content creators will expand, fostering a more equitable and inclusive digital economy.
As is often the case, in regions with unstable currencies have even more to gain. Micro-payments can provide a more stable and accessible financial system, enabling cross-border transactions and fostering economic growth.
Special mention: Learn-to-Earn
Learn-to-earn models bypass traditional advertising methods by directly rewarding consumers for engaging in educational content about a product or service. This approach shifts the focus from passive consumption to active participation, empowering individuals to gain knowledge while being compensated, creating a mutually beneficial relationship between consumers and businesses.
Here's how it works:
Micro-learning: With the help of micro-payments, learners can access bite-sized educational content, quizzes, or interactive lessons, and earn tokens or rewards upon completion. This can be used as a marketing tool to bypass advertising models and directly reward consumers for learning about a product or service
Skill Acquisition: Platforms and organizations can incentivise individuals to learn new skills or acquire specific knowledge by offering micro-payments as a reward. This approach promotes lifelong learning and empowers individuals to expand their skill sets.
Peer-to-Peer Education: Learn-to-earn fosters peer-to-peer education, where learners can share their expertise and earn micro-payments for teaching others. This creates a dynamic ecosystem of knowledge exchange and helps build communities around shared interests.
That’s all for this week! If you have any organisations in mind that could benefit from learning about emerging technology, be sure to reach out. Educational workshops are one of many consulting services I offer.
Love the idea of using micropayments for peer to peer learning.