Are streaming sats a waste of time?
At the end of the first year of “value 4 value” streaming sats, I reported this link in Fountain saying:
More than $16,500 has been sent to podcasters, in over 6.7m transactions, using Fountain, the company says. The amount of monthly sats paid to podcasters has increased six times since January. The company has also produced a list of the most supported shows using Value 4 Value.
This led to someone on a Discord server I used saying:
Over 6.7 million transactions. .238 cents per transaction, according to my trusty TI-85 Plus. Surely that many transactions ate up more than $16,000 in energy costs alone. I am not good at math, but…this hardly seems worth the effort, no? Can anyone make the case for “satoshis,” or am I just being a curmudgeon?
So, here’s my reply:
Not sure you understand the difference between Bitcoin and lightning payments; nor the fundamentals behind “streaming sats”. And perhaps being a curmudgeon.
Yes, the average transaction here is a fifth of a cent. That’s to be expected. “Streaming sats” will send a tiny amount of sats every minute to the podcast you are listening to. As one example, looking my recent transactions, someone is giving me two sats, or $0.00034, a minute as they listen to the show. (I actually know who this is, given the transaction also includes the name of the listener, though it needn’t - and, say, imagine the stats you can collect).
So, of course the average transaction will be low. But as you can also see, that user will give me $0.0204 - two cents - if they listen for an hour. That’s an equivalent CPM of $20 for the hour; which is quite respectable.
It’s true that a Bitcoin transaction does take up a lot of energy (though it’s a statistic spread by a Dutch bank, and other stats suggest it is actually rather better than a VISA/MasterCard payment). But even though a “sat” is related to a Bitcoin, it isn’t using the Bitcoin on-chain method to make the transaction - so it’s immaterial how much the Bitcoin system uses. (A transaction on Bitcoin is seen by every computer on the Bitcoin network).
“Streaming sats” uses the Lightning Network to make the payments, which doesn’t use the chain; and, instead, uses direct connections: much like email does. At scale, making a Lightning Network payment costs less than an email in terms of energy (though right now it costs a little more).
Within my stats I can also see one person who’s sent a “boost” of 633 sats, which is $0.11 in US money. Were this a MasterCard payment, it would fail: the cost of processing one of those is about $0.20. More often, I get boosts of 10,000 sats ($1.69), which is very similar to the kind of money you’d get from a BuyMeACoffee account.
And this is why it uses the Lightning Network: because the payment costs are so low, it allows for micropayments like this. So the average 0.2c transaction cost is a strength, not a weakness. And, this is why it uses Bitcoin - not because Bitcoin is better than real money (I don’t think it is). You can convert the sats you receive into USD immediately, if you want: you’re not buying into the Bitcoin world and your sats won’t ever go onto the Bitcoin chain unless you want them to.
In reality, this stuff has almost nothing to do with Bitcoin, other than using it as a temporary fairground token - just in the same way as you buy $50 of tokens when you enter the playground and use those for micropayments for the rides: nobody’s telling you that those tokens are a financial investment!
In conclusion: it’s still early days, but no, it’s not a “waste of time”.