Although it’s one of the most popular bitcoin apps currently in existence, there are plenty of individuals in the bitcoin community who have nothing but nasty things to say about Changetip. Some bitcoin purists are not fans of the tipping company’s use of off-chain transactions, and others have even claimed that the company’s customer transaction data could eventually be sold off to the highest bidder. In a recent episode of the Bitcoin Knowledge Podcast, Changetip CEO Nick Sullivan articulated his strong stance on privacy and stated that he is ready to put his money where his mouth is when it comes to finding lower trust options for online tipping via bitcoin.
A reluctance to move to off-chain, centralized tipping
Near the end of Sullivan’s discussion with host Trace Mayer, the conversation moved towards the perceived issues with Changetip that are sometimes brought up by certain members of the bitcoin community. Sullivan made it clear that the current setup implemented by his company is not something that was done by choice. He claimed:
“Ideologically, I’d love for Changetip to be a truely decentralized application that performed all of its transactions on the blockchain; in fact, we started out that way. We had to go off-chain because we realized that in architecutral review there was no way the bitcoin network — at least as it’s conceived today — was going to be able to support the kind of volume that we needed. And then, the transaction fees would be too high.”
Sullivan then compared his service to a gambling website where you wouldn’t have a credit card transaction for every single bet; rather, you’d have larger deposits and withdrawals before the user “takes a seat” at the table. This is similar to how Changetip’s transactions only hit the blockchain when users make deposits or withdrawals. This is what allows tips on Changetip’s platform to be free and instant.
Are sidechains a proper solution?
After providing an explanation of why Changetip uses off-chain transactions, Sullivan went on to claim that the company is willing to “contribute development resources” to finding a solution that brings tipping back to the blockchain. Although he did not give any specifics away as to how it would work, the first possible solution that Sullivan pointed out was the idea of creating a sidechain for tipping. Sullivan said, “[There’s] a tremendous amount of potential [with sidechains], and we’re aligned with [Blockstream] to help execute. We’re willing to donate resources, and we’re willing to use Changetip as a notable first use case.”
What about payment channels?
In addition to sidechains, Sullivan also mentioned payment channels as a possible solution. He explained that sidechains may be possible as an added solution in the future, but “payment channels could happen today.” As a short explanation, payment channels are basically a way to process many smaller bitcoin payments between two parties as one larger transaction on the bitcoin. If this were implemented at Changetip, the tipping service would never have control over user funds.
[Read More: Demo Sidechains to Be Available in ‘A Few Months’]
As one of his final points, the Changetip CEO claimed that the company “reluctantly” moved to an off-chain. centralized system in its early days, but he’d like to bring tipping back to the blockchain. On top of that, he noted, “I’m throwing my money where my mouth is for Changetip and its development resources to make it happen.” It seemed that Sullivan was the real deal as he also mentioned one of Changetip’s employees, Richard Kiss, is being freed up to go out into the bitcoin development community and turn these implementation ideas into reality.
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