What Is Microtipping and How do I Make Money off of It?
05.08.2019

Everyone likes tips, right? They’re even better when it’s for stuff you do already. There are only a few Lightning Network use cases out there in beta form for testing. One of these is Tippin.me, a site and browser extension that allows you to microtip anyone with a Twitter account once you secure a Lightning wallet and load it with some BTC.

Tippin.me first came on my radar on February 20, when Jack Dorsey, the founder and CEO of Twitter, announced to the world that he’d set up the virtual tip jar and had already seen the “satoshis”, or Tippin.me’s currency, roll in. Sergio Abril, who created Tippin.me, told Bitcoin Magazine that the day Jack sent out that tweet, he saw 35,000 people come to the site.

We are currently at more than 16,650 users, and that’s mainly because of Twitter tipping,” Abril told BREAKERMAG in an email. “It’s a fun real use case, and that’s only the beginning of a path towards bitcoin adoption.”

From perusing Twitter, I saw that the people using Tippin.me ran the gamut from journalists and crypto entrepreneurs to fans just wanting to try out the Lightning Network. As a journalist at a blockchain publication and one of the people who visited the Tippn.me site courtesy of Jack’s tweet, I thought I should see how it worked firsthand.

It turned out it was a more haphazard process than I thought.

To begin with, the Lightning Network is a second layer protocol built on top of the bitcoin blockchain and meant to handle bitcoin’s scalability issue, (Currently the blockchain can process only about seven transactions a second.) While that may have been fine when there were relatively few people using bitcoin, that’s just not the case anymore.

The result is that transactions in bitcoin can take a long time to process, and the fees can be high.

The Lightning Network was designed to deal with this, based on the idea that each and every small transaction didn’t necessarily need to be logged individually to the bitcoin blockchain.

Think of it as sending a text, rather than using, say, a carrier pigeon.

As texts are always preferable to carrier pigeons, particularly when money is involved, I decided to sign up for Tippn.me and give it a try. At first, all I had to do was go to Tippin.me, and connect my Twitter account. Once I’d done so, the site took me to what is essentially my dashboard, but now what?

The Tippn.me dashboard. 

TheChain: Image

Well, it was abundantly clear I had no money because no one has tipped me. But more to the point, I couldn’t cash out even if I were tipped, because I didn’t have a Lightning wallet.

Tippn.me, conveniently, recommends a few wallets including Elcair and bluewallet.

Lightning wallet recommendations on Tippn.me. 

TheChain: Image

Before I tried to get a wallet, I downloaded the browser extension for Chrome, as there was a little red notice next to it, and I’m told that will let me tip people directly from Twitter. When I opened Twitter in Chrome, the extension showed up as a little lightning bolt on the same part of your tweet as the like and retweet icons. When I clicked on it on one of my own tweets, a QR code came up.

Tippn.me QR code on Twitter. 

TheChain: Image

This is the page I can share with other people so they can tip me, opening up a Lightning Network channel by scanning the QR code from their phone or copying my wallet address.

But again, to do any of this, I still needed a Lightning wallet. After I consulted the internet (Googling) I found that Éclair was supposed to be one of the best and first Lightning wallets, except but it’s only available to Android users.

Unfortunately, I have an iPhone. I tried to use other wallets, like Zap, but to make a long story short, it didn’t work for me, given the jargon and technical aspects of setting it up. So, I went with BlueWallet, which Tippin recommended for iOS devices. If I had done so in the first place, I could have saved myself some time and energy. I downloaded BlueWallet onto my phone, I clicked to add a bitcoin wallet, then added a Lightning wallet. I named both of them, and there they were, right in front of me, but they were still empty.

At this point, I had to purchase some bitcoin. Now, to avoid a 10 percent fee incurred by using Changelly, powered by Simplex through BlueWallet (which I found out when my editor previously tried to order Domino’s pizza using the Lightning Network, and, well, that was an ordeal), I decided to try the Cash App. The Cash App let me purchase bitcoin for no fees, and in the same way you’d add money to your Venmo account from your bank account.

I signed up, then clicked through to the menu, added funds to my Cash App, and then easily purchased $20 worth of bitcoin, by verifying my name, date of birth, last four digits of social, and then adding a security pin for the transaction. That was, until I wanted to enable the withdrawal of BTC from my account.

To do so, I had to upload my driver’s license to prove my identity, then send a photo of my face to the Cash App team, who then let me know they were processing my request and would let me know shortly. “Shortly” turned into one day, then two, then three, then four, then five. Finally, I contacted the Cash App help team, who was apologetic and expedited my verification, which finally went through 10 minutes later.

After that, it was a simple matter of withdrawing my .002 bitcoin (which conveniently came a few days before the most recent spike) and, entering the manual wallet address of my blue wallet. After I confirmed the address, and then entered my confirmation PIN, poof, the transfer was initiated. The transfer can take 30-40 min to complete. The Cash App also texted me to tell me that my transfer was confirmed on the blockchain.

The BTC showed up in BlueWallet about 13 minutes later, with .002 BTC translating to 200,000 satoshis. The first time I tried to transfer satoshis from my bitcoin wallet o my Lightning wallet, I accidentally sent a Lightning invoice to myself, which is the same as requesting funds from someone. After that, I had to look up how to transfer funds, and figured out it was through the re-fill options under “manage funds” in my lightening wallet.

When I went through the re-fill option, I discovered there is a fee to refill from my BTC wallet, and even though I was only moving about $5.41 worth of bitcoin, the fee was $1.17, which was nearly 20 percent. Plus I had to wait a while before the new balance showed up in my Lightning Wallet. Apparently, this process can take one to two hours.

Hours later, I checked again, but they funds were never transferred. I tried again. I waited for a day. Again, they never showed up. The third time’s a charm, so a couple of days later, I tried again, and this time, BlueWallet tells me it registered my request.

The process isn’t as fast as it was made out to be.

“In order to move ‘regular’ bitcoin funds to a ‘lightning network’ wallet, you first need to make a regular transaction in the Blockchain, which could take anything from a few minutes to a few hours, depending on the fee you pay,” Abri told BREAKERMAG in an email. “Once you have your bitcoins ‘locked’ on the Lightning Network, transactions are instant, at least in theory; the whole Lightning Network ecosystem is still in a really early stage, and that means it’s unreliable, and it could fail sometimes… It will get better over time though.”

Finally, an hour after I had initiated the transfer, the satoshis were in my Lightning wallet. After that, it was easy to pull up the QR code of the Lightning wallet and donate some satoshis to Tippn.me. At this point, I’d set up my account to give and receive tips. But instead of tipping someone, I donated a tiny bit to the project, which is the same process as tipping on the Lightning network. In essence, I tipped Tippn.me. While the process isn’t as fast as it was made out to be, and is a challenge to set up for those that aren’t familiar with crypto or wallets, once everything is lined up, it is straightforward. Abril thinks it can only get better.

The truth is that it has been quite reliable so far, but it’s better to be cautious,” said Abril in an email. “It started as a personal side project not so long ago, and I just didn’t want people to risk their funds, that’s the reason behind the beta moniker. Also, even Lightning Network technology itself is in beta, and Tippin depends on it, so I rather not exit this phase until they do!”