News Can Facebook Solve Micro-payments With Blockchain?

Can Facebook Solve Micro-payments With Blockchain?


- Advertisment -

It’s a problem that’s long flummoxed media outlets, and also one that’s increasingly frustrating consumers: The inability to pay a small sum, such as 25 cents or $1, to read an article online.

Yet a breakthrough could be near, as big web platforms like Facebook and Kik are building technology that could mean a new revenue stream for news outlets and an alternative to consumers having to hand over their credit card information to read a single story.

Before explaining how Facebook could finally crack the problem of so-called “micropayments,” it’s worth noting this issue has been around almost as long as the web has. As Wired reported this year (ironically, the article is behind a metered paywall), the early world wide web anticipated such payments and even created an error code—similar to “404 Page Not Found”—called “402 Payment Required.” That 402 error code, however, is still “reserved for future use.”

My colleague John Patrick Pullen raised the same issue of micro-transactions in a Fortune article published back in 2010, asking if online media couldn’t copy the casual, social gaming industry, where players easily bought digital loot. That was nearly a decade ago, yet there’s still no easy way to pay for access to a one-off article by clicking a button in your browser.

According to Mathew Ingram of Columbia Journalism Review, the problem with micropayment technology in the early days was that it involved too many middle-men, making it unready for prime time. In an interview with Fortune, Ingram says that media companies dislike collaborating with each other, which means that no one could agree upon a common standard for consumers to pay across different sites, back in the day.

But things have changed in technology since then, most notably the arrival of blockchain has begun offering an easy way to spend and keep track of digital money. The most famous blockchain is Bitcoin but, for a bunch of reasons, it’s not the best candidate to solve the online payment problem.

Enter Facebook. The social network has been working on a not-so-secret plan, Project Libra, to build a blockchain of its own, which will come with its own currency—something that will likely be called Facebook Coin. The company is being coy on how exactly this will be distributed, but it’s a good bet every user could receive a small batch for free, and then be able to buy more coins or else earn them by doing tasks like watching ads (which, admittedly sounds like something out of a Black Mirror episode).

If this is what unfolds, it could finally solve the problem of micropayments by giving everyone something they can easily spend and, on the other end, provide online publishers with an easy way to get paid. For practical purposes, this means that a year from now, those obnoxious paywall pages will give you an option to subscribe with a credit card—or just click to pay for a one-off read. Meanwhile, websites could slide prices up and down in hopes of converting casual readers into paying subscribers.

Facebook declined to comment for this article, but Kik, recently issued its own blockchain-based coins for its millions of users to spend. According to CEO Ted Livingston, the idea of using Kik’s currency for micropayments isn’t just technologically possible—it’s a matter or time.

This suggests a time, not far off, when consumers might hold a number of online currencies that can be easily spent around the Internet—not just for news stories, but for videos or creative works like poems.

As for media companies, there’s reason to be wary, given how Facebook has previously, repeatedly burned them by promising a source of revenue, and then taking it away. Nonetheless, the prospect of getting some money rather none when a casual reader encounters their paywall should be a powerful incentive to at least try it out.

Ingram, meanwhile, says he is unsure if easy blockchain payments for news will catch on, in part because there will likely always be a free version of any given news story, and because of a “psychological friction” that impedes people paying for content.

“Someone once told me that micropayments was an idea ‘that has a lot of potential — and always will,’ meaning of course that it will never actually happen,” he says. “I would love to be proven wrong though.”



Please enter your comment!
Please enter your name here

Latest news

Using Blockchain to Fight Climate Change, MOSS is changing the Narrative

The effects of global climate change are not undeniable. From glaciers shrinking to flooding, temperature rise, and...

DeFi Tokens Still Bullish with Triple-Digit Prospects Amidst the Bitcoin Rally

The Decentralized Finance (DeFi) market seems to have reclaimed its bullish status in the ongoing crypto market...

Bitcoin Security Lessons from The KuCoin Cryptocurrency Exchange Hack

It is a recent but not new happening that a hot wallet from a crypto agency has...

Facebook’s long-awaited Libra is Coming in January 2021

In a more limited form, the Libra Association's projects are being implemented. It will only launch a...
- Advertisement -

Polkadex Enhances the Cryptocurrency Trading Experience

The global economy has not entered the modern era as of yet. Luckily, there are tools to...

Ethereum Price Sees $500 for the First Time in Two-and-a-half Years

First launched in 2014, Ethereum or Ether is one of the oldest altcoins and probably the most...

Must read

- Advertisement -

Read Next
Recommended to you