I did a lot of backpacking around Europe in my early twenties. As a huge fan of fridge magnets, I’d bring a trophy from every city I visited. There was always some extra cash in my pocket: those cost from 2 to 5 euro and the vendors wouldn’t let me pay with a card for anything below 7.
This is an example of micropayment – a small everyday expense, like buying a souvenir, ordering a cup of coffee, or paying a bus fare. So why did tourist shops try to avoid these? The reason was that the fees significantly cut their net proceeds.
Blockchain technology opened up new avenues for micropayments, making them more desirable for the vendors. As mediators are excluded, transactions become faster and cheaper. Besides that, with fiat currencies, one cannot set a fee lower than the smallest monetary unit, e.g., one cent for the dollar. Bitcoin, though, can be split down to one satoshi – a fraction as tiny as 0.00000001 BTC (0,00058$ at the time of this writing).
So, can I pay for my coffee with Bitcoin? Technically, yes. There are a few issues, though, and one of them is practicality. The current fee in the Bitcoin network is around 17 USD/tx, and while that could work for more significant purchases (think Tesla), it’s rather impractical for micropayments. Paying with other coins would be more sensible here.
Another one is convenience. Until recently, one had to use the specific crypto wallet the vendor partnered with. As I mentioned in one of the previous posts, last summer Coca-Cola Amalfi installed 2.000 vending machines where you could buy a Coke through Centrapay’s Sylo Smart Wallet app. According to Forbes, a year earlier, Starbucks was testing Flexa’s Spedn app in their coffee houses. Doable, but not too convenient, right?
However, the big breakthrough seems to be on the way, as major payment systems such as Mastercard and Visa are finally introducing cryptocurrency cards. With that, paying with crypto for your cappuccino may soon become as easy as placing your phone near the terminal. I can’t wait.
