Coinbase Launches a ‘Tips Button’ with Micropayments

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by Zhanna Lyasota · 4 min read
Coinbase Launches a ‘Tips Button’ with Micropayments
The promise of virtual currencies is that they can facilitate transactions with substantially lower fee structures. Photo: Coinbase

Coinbase has released its own Tip Button, which can be added to any Web page and enable micro-payments across the web, using Coinbase or any other bitcoin wallet.

Different kinds of tipping has seen particularly rabid adoption in recent weeks, aroused by ChangeTip and an enthusiastic r/Bitcoin community on Reddit.

Stimulated by the creation of “Tipping Tuesday” and later an r/FreeBits sub-reddit, tipping expression has exploded across the Web.

No wonder that the biggest bitcoin payments company wants in on the action: Coinbase has recently released its own Tip Button, which can be added to any Web page and enable micro-payments across the web, using Coinbase or any other bitcoin wallet.

Nick Tomaino, the company’s business development manager, said that the Coinbase Tip Button has been in the works for a while, and the decision to launch it this month is a huge coincidence.

“We’re huge fans of ChangeTip and have no intention of competing with them – in fact, they’re built on the Coinbase API,” he said. “They’re focused primarily on social and have done a great job there. Were focused primarily on content creators – publishing platforms, large publishers, individual bloggers and podcasters. We think all these people need a way to get paid other than ads.”

At launch, the Coinbase Tips Button will be used by Daslee, Adam Carolla, Zapchain, Beacon Reader, AVC, The Morning News, Jupiter Broadcasting,, The Gongshow, BK’s Two Cents, Dustin Curtis, AroundTheCoins, Crypto101, Haywire, AstonishingLegends, and StartupManagement.

The Coinbase Tips Button could be considered an SMB offering, which is evident by the above list. If the New York Times wanted to adopt it, the company would need to do an enterprise scale custom integration. If Coinbase is interested in this segment of the market, it will consider building out a fully productized enterprise offering. Tomaino noted that the company is already communicating with multiple largest publishing platforms.

The cost structure of traditional payments channels, often a minimum of $0.35 per transaction, have made micro-payments under $1.00 economically unsupportable. Bitcoin’s zero, or low fee nature, changes this and opens up entirely new types of expression, like paying $0.05 to deviate from a paywall and read a single news article or $0.25 to make an in-app digital purchase. In the case of tipping, think of it like a slightly stronger version of “liking” or sharing online content.

“Going from paying $0 to consumer content to $0.01 is a big leap – we’re all irrational by nature,” stated Tomaino.

Building up in an entirely new currency and payment channel to that operation won’t necessarily make that mental leap either. However, as stated above, it will make possible transaction sizes that were otherwise impractical.

Coinbase doesn’t consider its Tip Button as a key offering or one that will arouse meaningful revenue to the business, in and of itself, according to Tomaino. Comparatively, it is like a gateway drug that could lead customers to more regular non-micro-transaction usage.

More than 30 percent of all transactions processed through Coinbase have been for $1 or even less. In addition, the Coinbase’s two highest-volume merchants, Wikipedia and Humble Bumble, both see the majority of transactions fall under this level.

“We’re really interested in enabling new consumer behaviors and finding ways to drive both engagement among existing users and bitcoin adoption by new users,” Tomaino said. “We think tipping and micro-payments could certainly be a killer use case that drives everyday consumers to start using bitcoin.”

That actually creates one advantage that Coinbase will have over ChangeTip: flexibility. If a customer chooses to load $25 into their ChangeTip account, which, unexpectedly, is the upper limit: the only thing they can do with those funds is use them for tips. Buying bitcoin through Coinbase, customers can spend that monetary value anywhere bitcoin is accepted, including but not limited to, via its Tips Button.

Tipping is free, as all transactions through Coinbase. Customers only pay when purchasing or selling bitcoin (1 percent each way) and merchants only pay (1 percent as well) when choosing to convert instantly from bitcoin to dollars at the time of each transaction.

“We hope that tipping will encourage merchants to hold onto bitcoin longer rather than converting instantly,” Tomaino noted. “Since they’re not selling a good or service, there’s no need to recoup costs, so they shouldn’t be as incentivized to convert immediately.”

According to Tomaino, tipping is just one of the new bitcoin-enabled expressions that Coinbase is looking to encourage. It’s likely that the company will introduce additional products aimed at arousing engagement and showing bitcoin use cases that are impossible or impractical with existing payments infrastructure.

“We think of it as being at the cutting edge and as being good stewards of bitcoin technology,” Nick Tomaino said.

Bitcoin News, Cryptocurrency news, News
Zhanna Lyasota

Zhanna has a background working for an American multinational food and beverage company as well as at a number of translation agencies serving similar top multinational corporations. She enjoys discovering new cultures as well as learning new languages. She is also a lover of all things fabric and floral ,especially if they are design-related. Zhanna is a graduate of Belarusian State Economic University with a major in Intercultural Business Communications.

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