Bitcoin could become a very powerful tool for users who are paying monthly subscriptions to certain platforms and companies. One of the main reasons why this is not a major trend in the world of digital currency just yet is because Bitcoin has no automated billing option. Some people might say Bitcoin does not need recurring billing capabilities, but it would be an interesting addition for sure.
Recurring Billing With Bitcoin
Traditional finance has a major leg up over Bitcoin in this regard, as it is very easy to set up recurring billing. Regardless of whether consumers stick with a bank account or credit card, there are tools available to have a subscription fee debited from their payment method at certain intervals, without too much trouble.
As popular as digital currency might be right now, such a solution does not exist for Bitcoin yet. Some people might see this as asign of Bitcoin’s security, as only the end user and wallet owner can sign off on every transaction. Without control of the private key, funds cannot be moved to a different Bitcoin address.
This begs the question as to how recurring billing for subscription services would have to be set up. Companies could send reminders to Bitcoin customers a week in advance, urging them on to manually sign off on renewing the subscription for another month. At the same time, this method is a bit clumsy, albeit it will prevent unwanted recurring billing from taking place.
Even though some companies might be keen on accepting Bitcoin payments, it is difficult to come up with an automated subscription system for digital currency payments. One possible solution to this problem comes in the form of smart contracts, which can be linked to a pre-funded wallet and debit funds from there at certain intervals.
Keeping in mind how smart contracts work, they will still require the wallet owner to sign off on the transaction. But this also means that any remaining funds in the pre-funded wallet will remain in the sole possession of the user, as no funds will be debited without their approval. On paper, this sounds like an idea that could work, although the technical implementation of things might be more difficult.
One thing to keep in mind is whether or not there is enough demand to justify such a service though. Companies are not likely to adopt such payment methods for a handful of customers, but if the community can show an overwhelming desire to use Bitcoin for subscription services, things may look very different in a few years from now.
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