The meteoric rise of the Bitcoin over the past decade has created a whirlwind around cryptocurrencies worldwide. Regardless of whether you’re a ‘miner’ or not, chances are, the dominant public consciousness of blockchain technology has reached your inner-circle.
With the cryptocurrency sensation picking up momentum each day, we’re yet to see the decentralized digital currency successfully integrate in a practical manner with everyday transactions.
Image Source: Statista
The above shows that the number of blockchain wallets hasn’t stopped growing since the creation of Bitcoin in 2009 and the number of blockchain wallet users had reached nearly 35 million by March 2019.
With the number of bitcoin wallet addresses growing each year, progressive companies are working towards creating a seamless and secure economy of mobile crypto microtransactions. It was believed that cryptocurrencies were merely something that trades for thousands of dollars, simply inaccessible for ordinary workers.
There still exists a gap between those investors in cryptocurrency and the general public. A number of crypto organisations have pinpointed microtransactions to be the cement that will eventually bridge this gap.
Typically, a micropayment refers to a payment of US$5 or less. So, the first thing crypto micropayments has done is introduce the average spender to the realm of crypto payments for goods and services of relatively low value.
Such small value payments were once practically impossible due to third-party transaction fees. Only in a truly decentralised system of peer-to-peer payments performed on a blockchain will no fees be necessary. Consumers are more inclined to use this system given the secure nature of the blockchain upon which it is built.
Some have been sceptical of the role micropayments will play in delivering significant growth in the crypto -market without complete decentralisation.
This is because of the typically small monetary value of a microtransaction, of which transaction fees often exceed the value of the product or service being purchased. Hence, negating any true benefits of a crypto microtransaction economy.
However, it seems that a future where crypto-transactions, micro or otherwise, become daily practice isn’t too far ahead. And the offset of the micropayment will play a critical role in getting there.
Crypto microtransactions and the developing world
South African startup, Wala, has embraced the belief that cryptocurrency will drive a financial revolution in Africa. Throughout Africa, people are spending, on average 27 cents for their mobile airtime using crypto tokens.
Amidst its political and economic instability, South Africa has shown the most interest in the trading of Bitcoin. In 2018 Bitcoin trading in South Africa increased by 13 per cent.
It has essentially allowed the movement along the blockchain millions of microtransactions across Africa. What has emerged is a clear success story for wide-scale blockchain microtransactions and demonstrates that cryptocurrency is a better means of exchange for people in developing countries.
Wala now facilitates 6,300 daily microtransactions on the blockchain for more than 57,000 cryptocurrency wallets across Central and South Africa- each of which transaction is a microtransaction of less than US$1.
This cryptocurrency facilitates payments across a peer-to-peer network with lower fees than those that are associated with the traditional financial system. The small-scale circular economy enables over 100,000 merchants of goods and services to operate and sell data, airtime, utilities and education.
The future of phone crypto microtransactions
Thanks to the accessibility and scalability of cryptocurrencies, micropayments can be set up for just about any cause. This makes for a bright and exciting future of its application. Both business owners and consumers are inherently more inclined to utilise eWallets that automatically deduct fractional transactions as content and products are consumed.
The next generation of smartphones is anticipated to incorporate built-in cryptocurrency wallets and decentralised reward systems to promote the use of peer-to-peer microtransactions. Ambitious crypto and blockchain companies have already set in motion plans to develop solutions for a completely decentralised cellular network which will provide free calls and phone services.
Mobilink-Coin is already exploring the potential of this by distributing cell phone voice and data services to its users, provided they participate at a sufficient level on the Mobilink-Coin Network.
As we settle into the era of private communication, crypto microtransactions find their true calling. Miniature, safe and secure payments for services, content and goods as and when you need them on demand, provide the ultimate safety net against security threats. Companies like Irbis Network (SafeCalls) are currently exploring the gap on the market by developing a decentralised mobile network that offers secure communication.
Crypto-vending machines have supported the use of digital wallets to securely and automatically purchase relatively low-cost goods. With the assistance of blockchain technology, the machine is capable of identifying whether a customer is of legal age to buy its goods.
Some age-restricted items, like alcohol, might be the future content of crypto-vending machines- allowing the monitoring of age restrictions with no human input. This was the goal of San Francisco based startup, Civic who showcased its Crypto Beer Vending Machine at a 2018 tech summit in New York.
Image Source: CoinDesk
This has the power to welcome emerging markets and boast a range of consumer discretionaries. Based on a peer-to-peer blockchain network with no meddling middlemen insight – Adam Smith would be so proud.
Also Read: 5 companies set to drive blockchain adoption in Asia
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Image Credit: NASA