Micropayments have long been one of the most hotly-anticipated use cases for bitcoin, but similar tech may be coming soon to Ethereum, the decentralized blockchain network that has recently rejuvenated outside interest in the cryptocurrency space.

While payments that cost fractions of a cent have historically been prohibitive on the Internet, supporters of the use case believe it could one day enable everything from alternative ways of paying for art and journalism to promoting tipping on social media.

ADVERTISEMENT

Market observers have forecasted that there could also be a lucrative market for the businesses that enable this future. Financial services firm Wedbush Securities, for example, has predicted bitcoin micropayments could be a $925bn market by 2025.

One of the earliest projects seeking to use the Ethereum platform for micropayments is Raiden Network, spearheaded by developer Heiko Hees, founder and CEO of Brainbot, a German-based smart contract and blockchain consulting company.

Hees believes the Ethereum network could prove to be the biggest enabler of micropayments, and that such transactions would cost less than they would on the bitcoin blockchain and be settled faster. A common annoyance for users of bitcoin, is that blocks on the network take 10 minutes to be processed, and to complicate matters, the standard practice by those who use the blockchain is to wait six confirmations until considering such transactions settled.

Ethereum, by contrast, has set its target on 12-second block times (though current block times are closer to 15 seconds), presenting perhaps the most notable possible solution.

But, Hees doesn't exactly see consumers interacting with micropayments. Rather, he is about machine-to-machine asset transfers, where machines, whether factory machines or drones, are the ones transferring value.

Hees called this ability a "building block" of the Internet of Things and offered the example whereby a machine could purchase resources, like the temperature in another room, based on predefined instructions. The vision is by no means unusual, even for an industry prone to big ideas.

Bitcoin's best-funded startup, 21 Inc, has been heavily focused on machine-to-machine payments, recently revealing Sensor21, a proof-of-concept for how machines could use its platform to buy and sell data related to the weather.

"This can spawn a whole new economy if you allow these very tiny transfers," he said, adding:

"Machines will do many, many transactions – probably more transactions than humans will ever do."

Scaling up

And then there's the "future of blockchain architecture" consideration.

The Raiden network, when implemented, might help boost overall capacity of Ethereum. Hees said that Raiden network and will scale up the Ethereum network from 25 transactions per second to more than 1 million transactions per second. And Raiden Network aims to increase the availability other powerful Ethereum abilities, including some types of smart contracts.