Cryptocurrency tip system

feature
3

Hi @CryptoRux

We were also thinking on developing some kind of tipping functionality. However we decided to go a slightly different route.

The problem with the standard tipping bot is that the bot essentially acts as a bank. You transfer money to the bot and then you can tell it to tip other users. The bot would keep internal accounting how much each user has, and when the user requests their earnings, the bot would transfer it to an address controlled by this user.
This method has the following issues:

  1. You need to trust the bot operator. If you are running this operator yourself then the users will have to trust you. If you rely on an external service you will need to trust that the service operates honestly and reliably. History shows that there were many tipping services in the past but for some reason they all died out.

  2. The service operator will need to implement protection against money laundering. Normal Bitcoin or Ethereum transfers are public. But the internal transfers by the tipping bot are not and so can be used to launder money. This means that if the tipping service doesn’t want to have problems with the law, they will have to implement at least some of the security features that the current crypto exchanges have. It will also have to keep the history of those internal transactions. All of this would make the service expensive to run and would degrade the UX.

The standard tipping bots have one very big advantage: it’s possible to do micropayments, since you don’t have to pay the transaction fee that you would have to pay if your transactions were made directly on the Bitcoin or Ethereum network.

The plugin that we are developing will avoid the problems with centralized tipping bots because the users will transfer money by performing transactions directly on the Ethereum network. In this way all transactions will be public and the risk of money laundering is reduced. Unfortunately for every transaction you will have to pay a fee, which is not insignificant. So micropayments (i.e. tipping) will be unreasonably expensive.

There is some development which might allow cheap microtransactions in the future. However as far as I am aware we don’t have a working solution yet, especially for the Ethereum network.

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