"Using 'satoshis' for payments has potential! VISA Cryptocurrency Head: Bitcoin will usher in the era of internet micro-payments"

The head of Visa's cryptocurrency division, Cuy Sheffield, believes that the smallest unit of Bitcoin, called a satoshi (sats), will be key in its journey to surpassing fiat currencies as a leading asset.

The Internet Era of Micro Payments

Cuy Sheffield, head of Visa's cryptocurrency division, pointed out on his personal Twitter account that after reading a series of tweets from Coinbase CEO Brian Armstrong, he carefully considered the changes that Bitcoin, the Lightning Network, and micro payments could bring to the world.

1/ Fantastic thread from @brian_armstrong that got me thinking a lot about the relationship between dollars, cents, and sats and the consumer value proposition of Bitcoin micropayments enabled by the Lightning Network https://t.co/F8iWZuvc2D

— Cuy Sheffield (@cuysheffield) February 16, 2020

Sheffield noted that the volatility and steep learning curve of Bitcoin make it impractical as a mainstream payment tool, as people tend to see it more as an investment vehicle rather than a means of payment. Its speculative nature makes individuals reluctant to sell it to others, significantly reducing its utility and liquidity.

However, the smallest unit of Bitcoin, satoshi, which is worth less than one cent, is perhaps the smallest unit of currency in the world. This feature could potentially lead to its adoption in the micro payment field, as we cannot pay less than one cent online in US dollars.

If in the next 5 to 10 years, content creators profit from fan donations, Bitcoin's micro payment feature could become mainstream. We might see internet users who are unfamiliar with or uninterested in Bitcoin still using "satoshi" to pay for online content such as streaming videos, articles, and music.

Sheffield believes that since 1 satoshi is approximately one hundredth of a cent, holders focusing on micro payments will not "buy out of greed" or "sell out of panic" due to the extremely small amounts involved. Despite high volatility, they can still make small payments, with little impact on purchasing power.

Furthermore, Sheffield suggests that if liking a post costs 1 cent, and a person likes a hundred posts a day, it would amount to $30 a month, which might deter some consumers. However, if liking a post only costs 1 satoshi (approximately 0.0097 cents), it could alleviate the psychological pressure on consumers in this regard.

The Key Technology: Lightning Network

To realize Sheffield's ideal payment world, the development of Bitcoin in the Lightning Network field will be crucial.

Although the Lightning Network is still in its early stages of development, it remains the most viable second-layer scaling solution for Bitcoin in the current crypto market. Lightning transactions do not require miner fees, and the network is difficult to support large transactions, suitable only for peer-to-peer micro payments. This technology is the key to Sheffield's vision of an internet of micro payments.

Despite the current steep learning curve and limitations of this technology, if consumer-facing micro payment applications can be built using this technology, the Lightning Network will undoubtedly become a catalyst for mainstream adoption of micro payments.

Related Reading

• Understanding the Lightning Network in Three Minutes!
• LongHash: Adjusting Bitcoin Units Could Be the Key to Triggering a Bull Market

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