SatoshiPay - 'Pocket change for the web'

SatoshiPay is aiming to solve nanopayments for web content, but this is only the beginning

Ramy Caspi
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SatoshiPay is a company that processes micropayment transactions (which they call "nanopayments") usually in the form of bitcoins (or smaller Bitcoin units called, "satoshis"). The company is currently developing a two-way payment platform that will allow content providers to charge consumers a small fee (as low as one satoshi or a fraction of a cent) to read, watch, or listen to content.

Transactional amounts of $10 or less are generally considered a micropayment, and users today cannot pay 1c for goods or services on the internet using an open loop system. They need a closed loop system which does not currently exist. SatoshiPay therefore wanted to solve this problem on an open loop network and make it available for the web. After developing the technology, SatoshiPay created the use case of allowing nanopayments for web content (image, news articles, video) and this was a good example of how blockchain can be deployed for Web 3.0.

Users today access content via their web browsers but they are being inundated with adverts. Most of these users have some form of Adblocker deployed in order to block those adverts and this is creating a major problem for the publisher, as they need the monetisation of their websites. According to the Internet Advertising Bureau, up to 22% of the market are currently using some form of adblocker.

Publishers have therefore introduced paywalls, in order to monetise the content, but this is causing another problem as users don’t necessarily want to pay a full monthly subscription fee to access a selected article. Users are also complaining that they have a poor experience with these paywalls with research showing that 80% of users don’t like the user experience during signups.

SatoshiPay’s technology is a two-way platform that enables content providers to charge consumers small amounts of money to gain access to the provider's media. These fees allow the transfer of amounts a thousand times smaller: a few cents or less and they can be as small as a fraction of a cent. This is differentiated from traditional paywall subscription services in that each piece of content can be purchased individually. Users pay per article, per song, and per download. In terms of an article, users may pay per paragraph depending on whether or not they want to keep reading. SatoshiPay’s payment mechanism works across websites and allows consumers to use the service without having to sign up or download software.

Pay on Demand for Content Providers

A user has a wallet, and he can surf from one website to another website, and using his wallet, he can pay to access a single article.

The system does not need a signup process, because using blockchain the user simply needs to click the locked content, and it unlocks. The user does not need a plugin installed on his browser to work; however, the user must not delete his cookies.

SatoshiPay put ‘blockchain technology’ to very good use and its system makes things faster, more secure and cheaper. SatoshiPay allows payments within milliseconds and that’s kind of unheard of in other payment systems; this is because SatoshiPay is using the bitcoin blockchain which has been up and running for 8 years now. So, there is no downtime and I don’t think you can say that about any other financial system.

The on-boarding is also very smooth, and practically does not exist. The user does not need to sign up to any forms, does not need any passwords or to enter any emails as the system is completely anonymous and once SatoshiPay has been setup, the system simply works.

Access to digital content in one click and will work with any “SatoshiPay” enabled website.

This combination of blockchain reveals the potential of a nanopayment paywall system for content sites, newspapers, blogs, video sharing sites etc.

Publishers have tools too, and using the dashboard they can gain valuable data on their users, and using the Wordpress plugin allows the publisher to easily access these tools.

An open API is also available for companies who prefer to use this methodology.

Is SatoshiPay just an alternative to content “paywalls”?

Yes and no. In 2016 the company focused on launching and improving their website widget, which allows consumers to pay small amounts for increments of content like a news article or an individual image, across websites and audio/video and file downloads.

In 2017, the company's focus was to make the website widget more compatible to a mass market audience by adding more payment methods like credit cards and other instant payments (PayPal) for topping up credit. This way consumers will not even realise Bitcoin Blockchain technology is used in the background and can simply enjoy a frictionless web content payment experience.

Together with Visa and Wirecard, SatoshiPay already explored making the system more accessible to people that don’t hold bitcoins.

Meinhard Benn, CEO and Cofounder of Satoshipay said “We are very pleased with the results of this proof-of-concept project and all three partners learned a lot about linking blockchain-based payments to legacy payment networks during the last couple of months. Localising our user interface will allow us to work with more publishers of web content and digital goods worldwide and to grow our network of accepting websites far beyond the Bitcoin niche”.

SatoshiPay was founded in 2014 and launched in early 2016, and currently has over 360 publishers who have signed up to the services with roughly 35000 users with wallets. The wallet is linked up with PayPal, so this allows our users an easy way to top-up their wallets. What SatoshiPay does in the background is they exchange those funds into bitcoins for you and your wallet will have those credits stored in your browser.

SatoshiPay was based on bitcoin blockchain, with the ability to transact one satoshi.

A Satoshi is the smallest fraction of a Bitcoin that can currently be sent: 0.00000001 BTC, that is, a hundredth of a millionth BTC. Using a Satoshi as a unit of a bitcoin, SatoshiPay allows nanopayments.

In November 2017, it became evident that Bitcoin’s original vision of a peer-to-peer electronic cash system was no longer viable for everyday transactions. Due to its wild success, stalling scalability measures and the subsequent network congestions, minimum amounts that can be sent over the Bitcoin network and transaction fees rose from under a cent to several EUR/USD per transaction. For SatoshiPay this meant they could no longer wait for Bitcoin to scale, but needed to look for a new blockchain or distributed ledger to migrate our nanopayment system to.

Meinhard Benn, CEO and Cofounder of SatoshiPay said that “We looked at different options that are suitable for micropayments at our expected scale, did thorough due diligence and tested extensively for current production readiness — and concluded to make Stellar our default ledger.”

The Stellar advantage

As a ledger that does not use resource-intensive proof-of-work calculations to secure transactions, Stellar offers extremely low fees (currently around 0.00003 cents per operation) and fast settlements (around 5s to final confirmation). Apart from these performance benefits, SatoshiPay found Stellar to be very developer friendly and stable. Everything is well documented, works as expected and the software ecosystem is mature.

Working with VISA, SatoshiPay has raised 1.4Million Investment from Blue Star Capital, Jim Mellon with blockchain funds Huiyin Blockchain Venture and Kryptonite 1 co-investing. SatoshiPay is aiming to solve nanopayments for web content, but this is only the beginning as today the internet has a lot of digital content, such as streaming, and if users are consuming on the stream, then the technology can allow the same users to pay per kilobyte of data and managing this on a protocol level opens a lot of possibilities for the future. SatoshiPay thus exchanges payment information on an HTTP protocol level, and by attaching a value here, it makes the possibility a very valuable solution indeed.

So, what do you think is next for SatoshiPay?

"So, we have quite a full road map and a lot of ideas," Benn said. "We need to focus on our web use case so we will introduce, very soon, website-to-user payment as well. Currently we’ve built something that allows you to spend small amounts on websites but we will also reverse this and allow websites to pay users very small amounts, for example, for filling out a survey or giving up certain private data or just doing some sort of micro-work just translating one line of text, these kinds of things.

"The next application of our technology will be in the machine-to-machine, or Internet of Things space, where also billions of small transactions are expected in the coming years. The third sector we want to get into is white label solutions so people can base their own loyalty system or a small currency, like a game currency, based on our backend."