Podcasting 2.0 introduced a new way for your audience to support your podcast by sending micropayments. This is usually measured by satoshis (abbreviated as “sats”), which are one hundred millionths of a Bitcoin. As such a small portion of cryptocurrency, many people might wonder whether the effort is even worth the return.
The following is not financial or investment advice!
What is a micropayment?
As you can probably guess from the word itself, micropayments are very small transactions. The business world often considers any transaction below $20 to be a micropayment. But where our personal finances are concerned, we might think of micropayments closer to $5 or below.
With a Podcasting 2.0 podcast app, audiences can stream satoshis (“sats”) to Podcasting 2.0 compatible podcasts by automatically sending small amounts (such as 100 or 1,000 sats) for every minute of listening. Another way is to send a “boostagram,” which is a one-time payment that can include a message—the “gram” part comes from the idea of a telegram, and the “boost” part (a term often used in podcast apps) comes from the idea of boosting how much you're supporting because you liked something you heard at a particular point in the episode. Perhaps even boosting beyond the amount you normally stream to the podcast.
You might hear some podcasters mention their boosts or streams from only a couple hundred sats to a hundred thousand or more. While these numbers seem large, they still convert to small amounts in USD (at least as of March 2023).
But that's actually a good thing! And before I can explain that, we need to look at a current big problem.
The legacy problem with micropayments
PayPal and Stripe are popular methods of receiving payments. It's now quite easy to put a button on your website, allowing your audience to support your podcast through one-time or recurring donations, even with a credit card.
It used to be that the only way you could take credit card payments was with a “merchant account” that would have its own monthly fees. But PayPal, Stripe, and other services have made it far more affordable and accessible to receive payments, including ACH transfers, paying from a balance, or debit/credit-card payments.
Even though there's no monthly fee for these modern payment methods, there are transaction fees. As of March 2023, those fees are usually about 2.9% of the transaction plus a flat fee of 30–50¢.
You might already see the problem: if your audience wanted to donate $1 via PayPal, you would get less than half of that after PayPal's 2.89% fee and the 49¢ flat fee. Even worse, those fees will likely be even higher outside the USA!
Losing around 50¢ might not seem like much, but multiply that by how many people might be willing to give you $1 donations per episode or per month. At that small of an individual donation, you would lose half your income in payment fees!
Even worse, this makes 50¢ donations impossible!
Podcasting 2.0's “value” feature makes micropayments possible
The “value” feature in the Podcasting 2.0 standard (added with the <podcast:value> RSS tag) allows you to receive sats from your audience via a Podcasting 2.0 podcast app. They can choose to send any amount of satoshis, and you will probably pay only a small percentage in fees—but no additional flat fees!
Consider the $1 example again. Legacy payment systems would take around half of that. But receiving the equivalent amount in Satoshis would cost you only around 3–5¢, depending on the small fees in the payment chain. While that 3–5% could obviously be higher than other payment methods, that percentage is all you pay!
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