Stepping aside from our usual mining posts, today, as it’s “Tipping Tuesday” as it’s now known on Reddit we’ve decided to focus on one of our new favourite Bitcoin services/features, the tip!
Content is king: that’s a fact. No business can market itself without content. But turning content into cash is still one of the web’s biggest challenges. It’s not uncommon for thousands of dollars to be pumped into content marketing every year, with little or no return for the small business.
As Google pushes for higher quality content and frequent updates to sites, businesses are investing more time and money into content – and still figuring out ways to get a payback. Bloggers are also looking for ways to support their hobby, outside of plastering their site with ads.
By utilising bitcoin, some services are trying to bring content monetization and cryptocurrencies to the mainstream.
Bitcoin Tip Services
ChangeTip is a service that aims to monetise content based on a familiar tip-based system. With a single button, it hopes that bitcoin users will doff their virtual cap to content creators, tipping them for articles they like. This could benefit businesses and individual writers by giving them small returns.
But ChangeTip isn’t the only contender. Coinbase has just launched its own tip feature as well. Coinbase is, first and foremost, a wallet service, so this isn’t destined to be a core feature. But it could be an added bonus for people who already store bitcoins using Coinbase’s site.
How ChangeTip Works
ChangeTip calls itself a bitcoin ‘love button’, and it’s easy to see why it’s so compelling. Simply mention an amount in a comment, and ChangeTip sends it to the author, along with a note explaining where the cash has come from.
The ChangeTip bot understands currencies and literal amounts, as well as concepts – monikers – like “one beer’. You can also create your own monikers, all with different values attached. This essentially makes ChangeTip multilingual and suitable for practically website. ChangeTip limits tips to $25 by default, although this can be changed.
[blockquote]Great shot, @amazingphotos! I always love the pictures you post. Have a beer on me! @changetip[/blockquote] – An example of how to tip on Twitter using Changetip.
Tips have to be claimed by the recipient; if unclaimed, the tip is returned.The tip jar concept is not a new one, and PayPal has also given site owners limited Donate buttons, but ChangeTip uses a powerful additional tool: social sharing. Because the donater has to comment in order to trigger the bitcoin payment, it has viral potential. The tool works on Facebook, Twitter, Digg and a host of other platforms and services; the number will surely grow.
Many tip jar systems are private. There’s no compelling reason to comment. With ChangeTip, the user has to publicly mention the service (and their tip amount) to trigger the bitcoin transfer. Interestingly, ChangeTip is built using the Coinbase API. So how does Coinbase’s own solution compare?
Coinbase: the Alternative Tip Jar
Coinbase is a newer entrant into the bitcoin tipping niche, with the already well established company announcing their foray into
the market last week.It provides users with an embeddable tip button, similar to the tip mention feature offered by ChangeTip. The button can be added to practically any website. It’s not designed for social networks, though, which is where Coinbase differs from its competitor.
Users can tip from their Coinbase account or a third party wallet service. The advantage of using Coinbase is that the default payment is sent with a single click. Coinbase has set this at 300 bits, which is about 10 cents (USD)
The strength here is convenience; Coinbase users can tip without additional signup. Coinbase is also a more established brand, so it adds a little credibility to the concept of bitcoin micropayments.
Bitcoin transactions are saved in a blockchain: a public, but anonymous, way of moving money. ChangeTip is free because its transactions are off-chain – outside the bitcoin system. This also allows ChangeTip to move money around much more quickly. Users top up a ChangeTip account from a third party like Coinbase, and use that balance to tip. Coinbase’s own system is also free, and utilises a Coinbase or other wallet service.
The lack of fees is also something of a game changer. Micro payments are often troublesome in that respect. ChangeTip will be introducing a 1 per cent withdrawal fee in early 2015, though, but it does have to make money at some point.
Will it Catch On?
For an audience that’s used to much higher fees, 1 per cent is unlikely to be a problem, so ChangeTip has a good chance of success in a limited, nerdy way. But ChangeTip’s biggest hurdle is the element of trust, and the hoops users have to jump through. Most tips will be worth a few pennies, and to claim them, users have to sign up for an account with a site they never heard of, to obtain a wallet they didn’t know they needed.
With Coinbase, you don’t need a brand new login. Your Coinbase wallet will work with your tip jar button, and you can integrate different wallets if you prefer to ‘bank’ elsewhere. The button idea is less innovative than ChangeTip’s social mention technology, but it arguably has more authenticity because of the brand behind it.
In truth, there’s room for Coinbase and ChangeTip, since they work slightly differently. There will be a core of content creators and bitcoin enthusiasts who will use both and tip frequently; ChangeTip is investing in gaining traction on Reddit, for example. In order for either service to gain widespread use, users will need to get content tipping into the mainstream, and that means fostering an understanding of bitcoin as a legitimate payment method (for anything – not just content).
Until bitcoin gets away from its risky reputation, security and regulatory concerns could put the brakes on tipping for main stream content monetisation. However, as these concerns are addressed, we’d expect to see more companies jumping on this bandwagon in 2015.
You can learn more about ChangeTip now at https://www.changetip.com. Then, read about the Coinbase tipping feature at http://blog.coinbase.com/post/102957332182/introducing-the-coinbase-tip-button.