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Critique of YouTipIt.org's Business Model

author: Kiba
published: 2011-03-24 05:36:55 UTC

YouTipIt.org creates an easy way for users to support content creators with bitcoin. You can buy bitcoins using Paypal on their site, in addition to being able to deposit bitcoin from your wallet. Login is easy since the service integrates with many providers requiring no entry of password. There are pre-made buttons for creators to embed into their site.

However, the way YouTipIt.org works deters from accomplishing its goal, which is to help audiences support their favorite content producers. There are two main issues: the way payment is structured and the way tipping is presented.

So how does tipping work? Well, when you tip you must determine the precise amount of bitcoin you want to donate. When you tip more, you spend more, but you're also going to run out of money faster. That creates a mental transaction cost. The higher the cost, the less usage of the service in general.

Flattr, which also aspires to YouTipIt.org's goal, but does not support bitcoin, minimizes this problem by making every user pay a flat fee and then dividing that fee based on which creators they tipped. So, when you click on fifty creators, each creator gets 1/50th of the flat fee. Now they only have to worry about paying a flat fee every month to flattr. No matter how many clicks, they can be confident that they're not going to run out.

The junket, which is the tipping button of the service, is also an issue. It's a nice feature for being able to customize one's payment button, but it also gets in the way of getting users to support creators. It's not easy at first glance that the junket in question is a tipping button from YouTipIt.org. Therefore, the customization feature should be eliminated in favor of creating a tipping button that is immediately recognizable for anybody who's using the service. Flattr's button, for example, is homogenous; so everyone knows what it is.

The tipping button should also not redirect the user to the site unless the user is not logged in or registered. The creators should be the focus of appreciation, not the tipping service.

They should also make the button work anywhere as much as possible. Minimal code is essential to this process. In some forum it is nearly impossible to fit the junket with other items in the signature space because of the character limit. Less code equals more use, which equals more opportunities for creators to earn.

That is not to say that YouTipIt.org is not apperciated. To their credit, they created one of the first micropayment service in the bitcoin economy and it works reasonably well. The execution just needs some polishing.

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