Microtransaction
A microtransaction is a very small-value payment enabled by low fees and fast confirmations, useful for tipping, content, and IoT.
Microtransactions require low on-chain fees or L2 channels to be practical. They unlock new use cases like pay-per-use APIs, streaming payments, and granular incentives.
"Bitcoin Cash's low fees make tipping and small purchases feasible directly on-chain."
"Payment channels aggregate many tiny transfers into occasional settlements, lowering costs."
UX, privacy, and volatility affect adoption. Wallets can batch outputs, use cash accounts, or employ LN-like channel abstractions to improve experience.
"Recurring microtransactions benefit from automated tooling and stable fiat on-ramps."
"Merchants can set minimums or aggregate payments to reduce dust and UTXO bloat."
Related Terms
Fee
→The amount paid to include a transaction in a block; incentivizes miners/validators and helps prevent spam.
Fee Rate
→A fee expressed per unit of transaction size (e.g., satoshis per vbyte) used to prioritize inclusion in blocks.
Lightning Network
→A second layer solution on Bitcoin's blockchain enabling fast, low-cost transactions through payment channels.
Layer-1
→Layer-1 refers to the base blockchain layer that provides consensus, data availability, and settlement for transactions and smart contracts.
All terms and definitions may update as the Cryptionary improves.
