A macro-payment is a traditional payment for an entire good or service at once, like a weekly wage packet, a paycheck every two weeks, a monthly rent payment, a taxi ride, buying a book, a month's subscription to a gym, etc.

Fractional payments are transfers of money from the buyer to the seller along the way, not possible using traditional payment methods. There are two main kinds of fractional payments:

  • Micro-payments, maybe a cent at a time
  • Nano-payments, maybe 1/1000 of a cent at a time.

Scaling[edit | edit source]

One of the key promises of cryptocurrency technology is that, eventually, everyone will have the ability to stream money. Micro-payment systems have been researched since the mid 1990s, but viable solutions to process transactions of less than one dollar still elude mainstream payment companies.

The core barrier is obvious: for a micropayment to make economic sense, the transaction fee associated with it needs to be only a fraction of the size of the transaction itself. Traditional payment systems, which rely on centralized third-party servers to process transactions, are inherently incapable of processing transactions at a low enough cost to allow for micropayments.[1]

Micro- and nano-payments are only possible using protocols like cryptocurrency Tier-2 technologies, such as the Lightning_Network, with very fast transactions at almost zero cost per transaction.

Micro payments[edit | edit source]

For example, instead of paying an online newspaper $5 a month for all-you-can-eat access to the articles behind its paywall, you pay $0.01 per article, or $0.05 for an especially popular one.

Nano payments[edit | edit source]

For example, paying for an article by the word.

See also[edit | edit source]

References[edit | edit source]


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