by Joseph Young
Instead of using banners and sidebar ads to fund projects and websites, Chris Ellis of ProTip.is has developed a simple and open-sourced browser extension application which enables browsers to automatically search for Bitcoin addresses for users to fund.
Upon visiting a website for example, the Chrome browser with the Protip.is application will alert the users when it recognizes a Bitcoin address. Once the bitcoin address is highlighted in green, users can click on it, add it to the application and fund it using Bitcoin.
“What we put together was, now that you don’t have an intermediary, you don’t have a bank or a third party to settle transactions. You don’t have a middlemen and you can have very small payments. We had the idea of putting an extension on the Chrome browser or any browser that would look for bitcoin addresses of websites. The advantage over other centralized models was that you didn’t have to be running your own websites and as a content producer, you didn’t have to install anything,” said Chris Ellis.
Moreover, Protip.is has an edge over existing established online tipping platforms like ChangeTip as both users and content providers do not have to register for anything or integrate a complex API into the website to receive funds.
Disrupting Traditional Content-funding Models
Currently, the world’s largest advertising networks such as Google Adsense or AOL advertising still use conventional payment networks and remittance outlets such as Western Union, bank wiring, and checks to send payments to their subscribed content providers.
Because of the integration of these traditional payment systems, the majority of users in the network are required to meet a relatively high threshold before requesting a payout. For example, on Google, digital content providers and distributors can’t request a payout until they meet a US$100 threshold. After the request is made, it can takes anywhere between three working days or even two weeks for bank wiring and checks to be processed and settled by Google and the users’ preferred banks.
The limitations of the payment networks themselves account for these high thresholds. To provide users and content providers with lower thresholds, the payment network used to process transactions must be able to handle microtransactions with substantially lower costs. However, payment systems like Western Union and Paypal charge with the range of 4 to 10% of each transaction.
Thus, digital content providers struggle from incentivizing their content, primarily due to their inability to meet the high thresholds and adjust to traditional methods of payments. Particularly, website operators cannot afford the luxury of delaying their payments because of the strict deadlines of server and database fees.