Crypto artist cryptograffiti, who is known for his street art throughout the Bay Area and the Pacific Northwest, recently sold an artwork titled "Black Swan" for 1 millisatoshi (an infinitesimal amount). The "micro auction," as cryptograffiti calls it, took place over an implementation of the Lightning Network (LN), a web of payment channels built on top of the Bitcoin blockchain that enables off-chain transactions.
To conduct the auction, cryptograffiti partnered with Blockstream in using the company's nanotip, a micropayments "Lightning app" built with Blockstream's Lightning Charge application programming interface (API). The Lightning Charge API relies on the company's c-lightning implementation of the LN.
Nanotip, as the name suggests, enables individuals to privately tip content creators in small amounts through a simple web server. Each creator has a tip-bot to receive tips. Blockstream maintains that the tipping process features "stronger privacy than a classic Bitcoin tipjar."
Cryptograffiti told ETHNews about what the auction may mean for the future of micropayments:
"I hope the micro auction inspires others to think about how this tech can be applied to interesting use cases that wouldn't have made sense previously due to the minimum fees of credit cards."
Other organizations are developing their own micropayments-focused projects. Lightning Labs, for instance, released its beta LN implementation on the Bitcoin mainnet back in March. Also, a recent pilot from cryptocurrency payment service CoinGate saw over 100 merchants accept LN payments on the company's demo shop.
Despite the successes and developments related to the LN and micropayments, there are several skeptics. Cryptocurrency research firm Diar reported that a 100 percent success rate for LN transactions would only be guaranteed for payments up to three cents. Further, the report noted that for transactions greater than $5, there would be a 50 percent chance of the transfer failing. Cornell University's Emin Gün Sirer also pointed out that though the number of LN payment routes has increased substantially, the probability of successful payments has not.
Still, folks like cryptograffiti believe in the potential of micropayments. He admitted that "[t]he promise of micropayments was instrumental in [his] becoming an artist in the space." Indeed, he started posting street art in 2013 with a public-facing wallet to allow viewers to tip small amounts of bitcoin. He continued:
"I'm excited about a future where micropayments are omnipresent. Artists paid by the view … writers by the poem … musicians by the listen. Every day interactions complemented by positive monetary reinforcement such as tipping someone who let you merge into traffic."
Although the auction provides a practical use case for LN-related micropayments, the artwork itself is subversive. "Black Swan" sits at 1.44 x 1.75 inches and is made from pieces of a US dollar bill. The swan's beak is filled with ink from a counterfeit detector pen. The appropriation of these details calls into question the material limitations of fiat currency, as well as its susceptibility to counterfeiting.