Paper 2016/332

Micropayments for Decentralized Currencies

Rafael Pass and abhi shelat


Electronic financial transactions in the US, even those enabled by Bitcoin, have relatively high transaction costs. As a result, it becomes infeasible to make \emph{micropayments}, i.e. payments that are pennies or fractions of a penny. To circumvent the cost of recording all transactions, Wheeler (1996) and Rivest (1997) suggested the notion of a \emph{probabilistic payment}, that is, one implements payments that have \emph{expected} value on the order of micro pennies by running an appropriately biased lottery for a larger payment. While there have been quite a few proposed solutions to such lottery-based micropayment schemes, all these solutions rely on a trusted third party to coordinate the transactions; furthermore, to implement these systems in today's economy would require a a global change to how either banks or electronic payment companies (e.g., Visa and Mastercard) handle transactions. We put forth a new lottery-based micropayment scheme for any ledger-based transaction system, that can be used today without any change to the current infrastructure. We implement our scheme in a sample web application and show how a single server can handle thousands of micropayment requests per second. We analyze how the scheme can work at Internet scale.

Available format(s)
Cryptographic protocols
Publication info
Published elsewhere. MAJOR revision.CCS 2015
Contact author(s)
abhi @ virginia edu
2016-03-25: received
Short URL
Creative Commons Attribution


      author = {Rafael Pass and abhi shelat},
      title = {Micropayments for Decentralized Currencies},
      howpublished = {Cryptology ePrint Archive, Paper 2016/332},
      year = {2016},
      note = {\url{}},
      url = {}
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