SatoshiPay has existed since 2014 and have been focused on developing a nanopayments system since April 2015. In Febuary 2016 they launched their (bitcoin) nanopayments platform and in 2017 have switched from Bitcoin to IOTA as the payment token on the platform. The reason for the switch is due to Transaction Fees. With Bitcoin transaction fees used to be low enough to be a non-issue, however with increased use, limited block size and no ‘lightning network’ yet available the fees have grown to be significant for this use case (micropayments).
SatoshiPay have transitioned to the IOTA platform due to IOTA’s attractive 0-fee architecture. Today (16th October 2017) they released their demo for an IOTA enabled SatoshiPay. The main advantages of using IOTA are listed from the get go!
Fast, Trustless and Feeless?
- Fast – IOTA transactions over a lightning network are bound to be quick. The lightweight platform uses flash channels which are high speed and don’t require broadcasting each intermediate tx to the network (the tangle). This allows for a slick user experience.
- Trustless – This is contentious. Though we are strong supporters of the IOTA network it cannot be argued that the network is currently Trustless. The Coordinator ensures the network is not gamed in these early stages of adoption. This is a perfectly reasonable implementation of early stage 51% (33%) attack prevention but it does mean that the current IOTA network relies on the Coordinator. Not much is known about *exactly* how the coordinator works and it is operated by a known group (the developers of the IOTA platform) so this trust is acceptable at this stage. Once the network grows to a reasonable size the coordinator will be removed and the network will indeed be trustless. (IOTA Dev’s – please let us know if you feel this is inaccurate and we will consider rewording.)
- Feeless – This is accurate. IOTA has 0 tx fee. The demo uses an IOTA testnet so funding the demo is as simple as clicking a button to get test IOTA. When the platform goes live we expect that a qr code (corresponding to your SatoshiPay IOTA wallet) will be displayed for funding. We also expect that Paypal / CreditCard / Shapeshift integration will be adopted by all micropayment websites in the future as the target demographic moves from the cryptocurrency community to a wider, less technologically savvy audience.
Blue Star Capital PLC (LON:BLU) is an investing company with a focus on new technologies. Blue Star’s investments include a 31% holding in SatoshiPay, a nanopayment software and blockchain company.