Tipping Bots: Revolutionizing Ecommerce

November the 30th saw Reddit user The_Hox introduce a unique new service, SendGame. The_Hox, who appears to be the owner of a website selling Steam game keys for bitcoin, has introduced this service for sending game keys through website comments.

The SendGame service is similar in function to the ChangeTip service and a few older tipping options. These services allow you to send Bitcoin to another user through a standard internet comment, such as a Reddit comment.

ChangeTip is essentially a system of bots that search for the name "ChangeTip" being mentioned across different social networks. When a bot hears its name, it delivers the indicated Bitcoin amount from the sender’s wallet to the receiver’s. There is no software to run or code to type, and ChangeTip is currently available on Twitter, Reddit, Tumblr, Github, Stocktwits, Google+, and YouTube.

These accounts are simply web-based wallets, similar to a Coinbase, Hive, or a blockchain.info wallet account, albeit with less security. They’re designed to handle small amounts of value. For instance, new users of ChangeTip have a limit of $25 USD. Instead of sending assets out over the bitcoin network, these transactions are sent via centralized servers, which will help reduce the strain on the overall bitcoin network.

Then something beautiful happened

In the very same Reddit thread that introduced the SendGame bot, we got our first taste of two-way commerce through this new method of exchange:

Not only was the product delivered through a comment-bot protocol, SendGame, but the payment for it, the other side of an entire transaction, this same transaction, was done via a different comment-bot protocol, ChangeTip.

This was, to my knowledge, the very first full demonstration of a commercial exchange online that needs no marketplace, or particular exchange software program; Just two people meeting on a 3rd-party website, trading a product for a payment, without so much as even using the same service between them. The buyer used his choice of value sender bot, and the seller used her choice of product sender bot. All done on the fly, on public websites, with only the initial creation of those two accounts required.

This would appear to mean that the digital world is catching up to the physical world as a place to do commerce. Before this transaction, you could only purchase goods online through pre-made storefronts. Now we have the equivalent of walking up to a stranger on the street and saying; “Hey, I like your watch, want 10 bitcents for it?”

The timing couldn’t be better

This discovery comes at a very opportune time for the overall cause of micropayments. Not only has the popularity of ChangeTip started to really take off, breaking transaction records from the Reddit community’s “Tipping Tuesday” drive, but Coinbase has recently opened the doors to its own microtipping service, and this one with a twist: Coinbase “Tip” has introduced a website widget called the “Tip button” that allows you to activate your website to accept tips, all the while holding your funds in their much more secure web wallet.

Although Coinbase appears to have created this button primarily for webmasters to receive appreciation for their content in the form of bitcoin tips, they suggest on their website that it can be used for other ways to “unlock new revenue streams,” including crowdfunding.

It isn’t a very large leap from there to imagine that their tip button could be used to make payments for products sent out automatically by the comment-bot protocol as well. This could allow for a start-to-finish ecommerce shop, that you can embed into your website or blog easily, that supports instant product fulfillment.

While Paypal supports this functionality now, there are drawbacks. Paypal has a long list of Terms and Conditions, requires the use Fiat money, requires the submission of personal information, and of course having to apply for a Paypal account in the first place, which isn’t available in every country. Pakistan for example has very little market penetration for PayPal, due to strict banking regulations.

Last but not least, on December 2nd, we saw an announcement from Pantera Capital venture partner group, awarding ChangeTip with $3.5 million investment, and calling micropayments “Bitcoin’s killer app.”

Where this trend could go next

The ability to send valuable, digital items to other users through website comments is clearly not restricted to cryptocurrency and Steam games; at least not for long. With more and more programmers wrapping their heads around this new protocol for value transfer, it is a safe bet that we will see many other digital wares sent this way by new services in the future.

A Steam game key is a simple 15-25 digit string of numbers and letters that resembles a Microsoft registration code. Such a small chunk of data is obviously easy to send over a variety of methods, and there appear to be few limits on larger digital products that can be sent over a comment-bot protocol too. One can easily imagine a wide array of other digital product downloads, including software, videos, music, ebooks, or even torrents, each having a similar service to SendGame.

Want a service that sends music videos directly from the artist? No problem. This would seem to be an easy way for artists to sell their wares directly on YouTube itself.

But we’re just getting started! Want to create a smart contract or sell a colored coin without a storefront? You shouldn’t even need a website to sell these products. Unlike the ecommerce website that SendGame uses, one could easily load a hypothetical local version of the program selling files directly from their hard drive. Of course they would still need to run the program that watches for the call tag.

Security at all points of this method is still very basic of course; the wallet accounts are less secure than the established wallet services, malware could more easily divert this kind of transaction, and the point of trade has far fewer theft protections for the seller than a typical ecommerce store does today. One should expect to see increased security standards for dealing with these protocols soon, including perhaps a nimble escrow service ensuring both parties of such street sales are protected from any potential theft, fraud or scam.

However, once this fledgling ecommerce protocol does get more fleshed out, it is reasonable to expect an attitude to prevail that we all should be able to buy and sell anything online, from any page of the internet we want to. Sell your merchandise on YouTube? Check. Sell your Car on yahoo news? Hey, why not. You have to strike while the iron is hot! Wherever there is a buyer, someone will want to make a sale, and this comment-bot protocol opens up the rest of the web for them to do so.

Luke Parker. Author, entrepreneur & artist, I’ve been a perennial business starter and a strong proponent of bitcoin since 2011. These days I think about Bitcoin, cryptography, Cypherpunk lore and society. Then I think about putting them all in a blender and setting it to puree.