Why would you use counterparty instead of the micropayments channel in bitcoin?
Thanks for the feedback
If you want to send small amounts of bitcoin around, your best bet is to use something like Coinbase or Changetip. If you don’t mind the network fees of $0.04 or around there, then you just use Bitcoin. Counterparty would only start to make sense if you wanted to distribute dividends to existing holders of some Counterparty tokens. In that case, you would pay the Bitcoin network fee for a very small transaction and 0.0002 XCP per recipient.
Counterparty can’t send small amounts of bitcoins around in some special way.
Only bitcoin can do bitcoin tipping.
You could create an asset or tip with XCP but that wouldn’t be bitcoin tipping.
Weex, how is using Coinbase and and Changetip any different from using bitcoin? Are you saying they get around the fee, and if so, how are they able to do this?
Something, why can’t Counterparty send small amounts of bitcoin around?
Well I said Counterparty cannot send small amounts in some special way - it’s just bitcoin. You don’t need Counterparty for that and there’s no role for Counterparty in that operation.
By using Counterparty to create a tipping token you could have your own tipping app and create some innovation around that, but that wouldn’t be tipping in bitcoin (although transactions would have to be paid in bitcoin).
Maybe an easier way to understand this is that Counterparty is Bitcoin+. (and not 2.0 as many say)
Bitcoin = Lets you send and receive money
Counterparty (Bitcoin+) = Adds features to Bitcoin that let you do more complex things, like assets, smart contracts, games , financial instruments, etc.
@xuxu just to answer your follow up questions, Coinbase and Changetip can do it more cheaply because they just have to change numbers in their own databases and do not have to carry out internal transactions on the Bitcoin blockchain. In that case the incremental cost per transaction is minimal. They probably spend much more serving queries to read data out to users and interact with other APIs and services.
@weex Coinbase charges 1% to withdraw (https://support.coinbase.com/customer/portal/articles/1277919-what-fees-does-coinbase-charge-for-merchant-processing-). Changetip also charges 1% to withdraw (https://www.changetip.com/fees).
Internally they certainly aggregate stuff around but incoming charges cannot be avoided.
Personally I don’t think Changetip’s approach is sustainable (as long as they’re using bitcoin). Coinbase may be better, but I don’t quite understand why not send BTC directly to the owner rather than use an app.
Counterparty tokens are actually a better method in terms of approach, the only (and large) issue is one needs to create a token and make it popular, which is solving the famous chicken and egg problem.
The reason I mention those other platforms is because microtransactions are mentioned. Long-term, I expect Bitcoin fees to go up as billions of dollars worth of value are transacted daily. The general consensus is that low cost will be maintained by having lower value transactions be done off-chain with Bitcoin (and Counterparty) being the high-value backbone.
They do charge for withdrawal but that at least allows users to transact in cents and fractions of cents as long as they keep the value in those systems. Eventually those cents add up or grow and the service can become sustainable. Otherwise, they may need to charge some storage fees to discourage large amounts of value needing to be held and secured with no business reason to do so.
The reason I mention those other platforms is because microtransactions are mentioned
I understand, fair enough, I was just “branching out” giving unsolicited opinion on their business models.
You’re right about the need to move those off-chain.
I like the token approach (what Let’s Talk Bitcoin has done) because it’s decentralized and enables all that plus the ability to spend tokens to pay others on the same site. Of course bitcoin does the same thing and it’s not limited to one site/token combo, but the token approach is more local and most likely (if they store balances in a DB and settle them weekly or monthly) deals with the “too many transactions” problem.