Online tipping and funding platform Patreon is planning to accept bitcoin “hopefully soon”, allowing fans to make regular micropayments to their favorite online artists.
Founded in 2013, Patreon has to date raised more than $2m in seed funding, and is one of a host of recent startups looking to help content creators recoup revenue otherwise lost to online middlemen like YouTube.
The announcement comes courtesy of an email the company sent to reddit user ‘camponez‘, who wrote to Patreon to enquire about bitcoin integration, and received the following reply:
“Thanks so much for your note! We are actually exploring bitcoin integration right now.”
“Be sure to follow us on Twitter @patreon because we will be making the announcement of when it is live on there!”
Patreon co-founder, musician Jack Conte, confirmed the message in a reply to the thread:
“It’s true, we’ve been talking about bitcoin for months. my co-founder, Sam, already built most of the code, but it’s not pushed yet. We’re fixing some bugs and tweaking. don’t know when it will happen. hopefully soon.”
How Patreon works
Patreon is different to other project-funding sites like Kickstarter, focusing instead on creators who release a stream of smaller, regular works. Rather than raise a large sum of money for one big project, Patreon allows donors to set up payments closer to $1-10 to be paid out whenever their favorite artist or creator releases a new work; such as a YouTube video, podcast, web comic or even a news article.
Patrons have full control over the regularity and size of their payments, with monthly maximums. The system also allows creators to set rewards and perks for their patrons, such as tutorials, Google Hangouts or concert tickets.
Conte demonstrates how the system works in a video here, which also shows he gets over $4,000 in tips for every video he releases from his 1,200+ ‘patrons’.
He said he was motivated to build Patreon after realizing the millions of views his YouTube catalog received was only earning him about $100 a month.
“Surely my community thinks I’m worth more than that, right? Monetization of digital media is entirely broken. I don’t know who decided that we should turn the internet into a billboard, but it doesn’t even work that well,” he said.
Bitcoin advantage
To use Patreon either as a Creator or a Patron, you need to sign up for an account (or use a Facebook login). Currently, Patrons must have either a credit card or a PayPal account, limiting the number of potential tippers.
Then there are fees. Patreon itself charges 5% for its service, but credit card fees bite into that. Payment processor Stripe gives Patreon a discount due to the large number of transactions, making fees about 2.1% plus 30 cents per transaction. Payments are aggregated into larger ones, eg: if a Patron makes eight $1 payments to different Creators, the card is only charged once rather than $1 eight times.
Of course, any artist with a web presence can simply publish a bitcoin address or QR code image to collect 100% of all tips. This technique is probably only better for one-off payments, since it requires a benefactor to actually visit your site and enter each tip manually.
“With Patreon, payments can happen regularly and automatically without the need for a special visit, so if you make regular releases, signing up might well pay off. More of the money would go directly to creators. The goal of Patreon is to send as much money to creators as possible. So the idea of Bitcoin is super aligned with our mission,” Conte concluded.
Tip jar image via Shutterstock