Bitcoin Micropayments on Twitter
Back in 2015 I joined a startup called ChangeTip.
ChangeTip allowed novel new interactions on social. Sending a tip is more than a like, it’s more than a favorite, it’s the next level of support/engagement.
How it worked: While it worked across a wide variety of social platforms, on Twitter the user would generate this string:
“Send @bob a $1! @changetip”
“Send @bob a beer on me! @changetip” where beer was a predefined amount created by the user.
We had tons of new sign-ups as folks oauthed (used their social accounts to log in) with their social accounts to redeem the free money that was tipped. However, retention was super low. We never found Product Market Fit (PMF). Why?
It’s been almost 6 years, so I struggle to remember some of the specifics, but here’s why I think it failed:
Too early (not enough TAM)
Not discovering the make magic moments for long term engagement (Retention)
Mental costs of transacting (@nicszabo).
Nic has argued extensively that the mental costs of micropayments, or the moment of the consideration required when choosing to spend is prohibitive to widespread adoption due to decision fatigue.
Nic considers this a difficult, if not insurmountable problem. However, I’m a bit more optimistic, I think there is a threshold of UX that hasn’t been achieved yet.
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Lightning Tipping on Twitter
For long-term engagement (aka retention) of the Twitter tipping feature, Twitter will need to find the “make magic” moments around tipping. Likely that means reducing the mental friction when making a tip. Here are some ways they could do that:
Being able to tip on an individual tweet
Set a default amount, or automatically tip if I like a tweet (ex: set $0.05 default, max limit $1 a day)
Displaying tips in the replies, or on the tweet (showing off a different type of engagement)
Subscription tipping: I want to tip $5 every month to my favorite creators, spread it out amongst them stack ranked based on who I interact with the most
It’s all about content creators
Creators ultimately want to have consistent recurring revenue. We’ve seen this monetization method sweep across social platforms like Substack, Twitch, YouTube, etc.
Micropayments need to be merged with a subscription function in order to satisfy both the mental cost threshold for the transactor and ROI (on their efforts) for content creators.
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Note that I am not an investment professional, and this is not investment advice.