Coinbase, a Bitcoin digital wallet provider, has launched a microtransactions feature to allow its customers to transfer small amounts between accounts for free.
Coinbase launched the new feature Aug. 5, shortly before a separate company, BitWall, plans to launch a bitcoin micropayment service with ZeroBlock, an online publication that covers bitcoin-related topics.
Coinbase performs micro-transfers off the public ledger of bitcoin transactions, a process that allows funds to move instantly and without a cost to the end user. Micropayments are a favored use case of Bitcoin, a decentralized virtual currency that is gradually gaining mainstream acceptance.
Although bitcoin payments can be less expensive than conventional transactions, the costs associated with micropayments can still be prohibitive relative to the value being transferred. At the current exchange rate, bitcoin transactions cost the equivalent of five cents each.
"The technology exists to send payments much more efficiently, and it could be eliminated if it weren't generating so much in profit for payment processors," says Coinbase in an Aug. 5 blog post. "Bitcoin has the potential to help this problem by generally lowering fees."