We hear lots of discussion about Bitcoin’s use cases; how it’s going to change our relationship with money, how it’s going to remove friction from remittance markets, how it will improve legal frameworks, the list of “potentials” is extensive and its one of the reasons why so many people are excited about Bitcoin’s future. One-in-particular has increasingly gained attention, tipping online with cryptocurrency.
Tipping brings a whole new social aspect to exchanging value and giving online. It will help reward content creators for what they do, improve crowdfunding, and allow individuals to monetise their “social capital”. It’s not just bitcoiners who are excited about online finance becoming social. Global institutions like Goldman Sachs are also noticing the trend, recently headlining with the “Socialisation of Finance” as a focus in their The Future of Finance report. This is definitely a space to watch.
Today, online content creators such as musicians, artists, or writers rarely make incomes that match the time and effort it takes for their contributions. Of course, for those popular enough, sites like youtube will pay you for your work (approximately $1 per 1000 views), but these are a rare few. For most of us, “going viral” is a distant and unlikely event. Because of this, creative people online are restricted to following their passion part time, usually working other jobs to provide an income stream by which they can support themselves. Tipping via bitcoin offers anyone who produces content an extra channel to be rewarded for their efforts, helping them spend more time making stuff for us to watch,read or play.
Another related space where bitcoin promises to make waves is crowdfunding. Online crowdfunding is already huge, helping raise money for everything from the Oculus rift to supporting those in need on platforms like Kickstarter and Indiegogo. However, crowdfunding does have its drawbacks.
Backers may want to back a project, but do not see a commemorative t-shirt or some other “goodie” as sufficient incentive, startups and backers must trust the third party who manages the campaign, currencies must be exchange for campaigns being conducted overseas, and backers are still (for the most part) unable to get any sort of equity for their contribution. Bitcoin fuelled crowdfunding may have answers to many of these issues, allowing for decentralised campaigns, with coins being rewarded in exchange for backing (these coins behave very similarly to equity), free of the hassles associated with currency exchange.
At the end of the day, these qualities rise out of bitcoins superior properties as a form of “money”. For the first time, we have something frictionless and divisible enough to make a 10c transfer of value anywhere online viable, free of the transaction fees associated with fiat. Companies like Changetip are already laying the foundations of this tipping ecosystem, recently being accepted by live streaming giant twitch.tv whilst other altcoins like Reddcoin also vying to fill the niche. It will take time for the concept of tipping to become familiar to people online, but with enough time I hope that tipping can rise to become something as natural as “liking” content on facebook. In fact, when a like alone isn’t enough, a tip should do the job.
The best part of this is that it is already happening. One of my favourite personalities in the Bitcoin community is a writer know as the Two Bit Idiot (check out his daily bit posts). TBI is using Changetip for contributions from his readers to keep his team financially in the green, and it’s working. Changetip already functions across facebook, reddit, youtube and twitter. The platform is there, now it’s just a question of time before people start using it.