THE Bitcoin whitepaper (Wright, 2008, p. 1) refers to a system that provides “small, occasional payments,” allowing transactions to be broadcast over the Internet. Understanding both micropayments and the nature of sending small, occasional payments over the Internet requires describing and analyzing micropayments and referencing Bitcoin and blockchain technology in the same context. In this analysis, the term micropayments will be used to describe transactions that can be done efficiently – for less than 50 US cents. In such a functional specification, the cost of systems, including M-Pesa (Mbiti & Weil, 2013), will be demonstrated to be too high to be integrated into the use of micropayment solutions.
Alternatively, the deployment of digital token systems such as BTC and Ethereum Networks, as offshoots or derivatives of the original Bitcoin concept, will also be documented as not being feasible for a micropayment function. Creating a descriptive framework documenting the requirements for micropayments and the terminology behind them will be necessary to provide robust factual information to businesses and enable them to understand the systems providing digital cash and e-token payment systems as well. as the way they evolve and interact within the global economy.
Karsen, M., Chandra, YU, and Juwitasary, H. (2019). Technological factors of mobile payment: a systematic literature review. Procedia Informatique, 157489-498. https://doi.org/10.1016/j.procs.2019.09.004
In this article, the authors present a review of the literature relating to developments in the mobile payment industry covering the decade following the launch of Bitcoin. The paper also explores the different ecosystems, from regulators to manufacturers, software developers, financial institutions and retail customers. Finally, the article explores the research question “What are the main technological factors using mobile payment?” » In this paper, the authors conducted a literature review covering 54 articles and noted 17 key technological advancements required for mobile payment systems.
The document briefly addresses the topic of micropayments, relating to payments via mobile devices. Despite the different use cases related to micropayments that have been promoted over the years, the authors view mobile payments as a direct cash system with person-to-person payments using mobile devices. Such an approach is neglected and ignores the benefits of global trade at low casual values and the ability of international trade to differentiate itself through the sale of data and information. Likewise, such processing could be disintermediated without requiring large aggregation sites for integrators.
The research presented in this article demonstrates the fundamental disconnect between the global financial sector, the mobile payment industry, and the original concept of micropayments on the Internet. Such an approach fails to integrate advantages of micropayments and provide information on the lack of research and development in the field of micropayments. Likewise, the reviewed articles fail to understand the benefits that can be achieved through small-scale data processing and sales across geographically dispersed distances.
Rathee, G., Gupta, SD and Jaglan, N. (2020). A review of blockchain and its needs in industrial IoT. In HS Saini, R. Sayal, R. Buyya and G. Aliseri (Eds.), Innovations in computer science and engineering: proceedings of the 7th IICSE (pp. 207-214). Springer. https://doi.org/10.1007/978-981-15-2043-3_25
Rathee et al. examine the integration of blockchain technology with industrial IoT (IIoT) devices. The authors note how cloud infrastructure remains expensive and limits the possibility of many potential IoT applications. In particular, the ability to pay for small amounts of bandwidth and storage and correlate and examine data in an ad hoc manner remains outside the realm of current technology due to the need to integrate payments across a large number of machines to make payment. financial services from cloud operators are profitable.
The literature review presented in the paper covers a variety of techniques, including those relating to distributed file systems (DFS) such as IPFS. In this analysis, Filecoin is presented as an example of a system using micropayments for data storage. The process integrates a micropayment system which allows a token to be exchanged for a guaranteed purchase where intermediation costs are limited. Additionally, the file provider may have a reputation-based system providing proof of access, or an integrated escrow methodology may be developed that allows payment only at the end of the storage contract.
It is noted that the development of IIoT systems extends to supply chain management and provides a methodology for disintermediation of complex trade and tracking of components. Each step of the logistics process requires an exchange of documents. Because logistics systems are complex and sometimes have many steps, the cost of storing and exchanging contracts can be high unless the process is managed at the micropayment level. The primary use of micropayments explained in this paper refers to the exchange of tokens for small-scale services such as file storage and processing, but it could extend to logistics-based applications.
Youssef, SBH and Boudriga, N. (2021). A resilient micropayment infrastructure: An approach based on blockchain technology. Kuwait Scientific Journal, 49(1). https://doi.org/10.48129/kjs.v49i1.10578
Youssef and Boudriga emphasize the importance of developing resilient micropayment systems. The authors present an alternative approach to Bitcoin. Rather than creating a system based on the distribution of hash headers and blocks using a distributed auditing system, the paper presents a cautious approach based on the concept that “decentralization” is the primary goal of a blockchain, rather than a blockchain using a distributed audit system. decentralized approach to offering micropayments and reduced fees.
The paper discusses the development of an alternative to Bitcoin based on the block size of transactions and creates the hypothesis that trust requires small blocks and a system beyond regulatory control. Although such an argument is commonly used in the “cryptocurrency” industry, block creation is not assured at the user level and the scope of nodes is limited to a small number of systems that create blocks. The research relies on the flawed concept that trust is only valid if users personally verify all network transactions. Given that people use Visa and Mastercard without this level of validation for higher value transfers, the claim that users must validate everything for lower value transactions fails and should be rejected.
Finally, the article demonstrates a mismatch in the purpose of Bitcoin by arguing that the system was developed to “be decentralized”, rather than having used an approach based on the delivery of “small, occasional payments” (Wright , 2008). The distinction is significant, and the goal of creating a system outside the law, based on providing “censorship-resistant” transactions beyond the reach of law enforcement, is not the same as create and provide a system that can be enforced by regulators and government, but has the primary objective of minimizing fees or costs to users of the system.
Mbiti, I. and Weil, DN (2013). The domestic economics of e-money: speed, cash management and discount rates for M-Pesa users. American Economic Review, 103(3), 369-374. https://doi.org/10.1257/aer.103.3.369
Wright, C.S. (2008). Bitcoin: a peer-to-peer electronic payment system. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3440802
This article has been lightly edited for clarity.
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