Free Bitcoin on Zaps experiment — but what are Zaps?August 8, 2023
A Bitcoin advocate based in Canada has “Zapped” 600 people a total of 300 Satoshis ($0.09 or 0.000003 BTC) each in a Bitcoin-inspired (BTC) social media experiment.
To date, marketing executive Michael Degroot has doled out over $50 in Bitcoin to people around the globe. He has since been Zapped back more than 40 times, receiving more than $6.
But what are Zaps, and how is it possible to send money around the world without an intermediary?
Degroot recently signed up to the Orange Pill App, a social media platform that connects Bitcoin users from around the world. The app works similarly to Tinder or Meetups.com: the mission is to connect Bitcoiners in real life.
The app recently integrated Zaps or Bitcoin tips, and according to founder Matteo Pellegrini, 20% of users have added Zaps to their profiles.
Zaps use the layer-2 Lightning Network which runs on top of Bitcoin. Zaps are typically small or tiny amounts of Bitcoin, measured in Satoshis, and they are sent peer-to-peer.
To Zap, users have two choices. Create a non-custodial lightning wallet using a lightning node, or open a custodial lightning wallet. When users opt for a custodial solution, a third party such as Wallet of Satoshi, Blink or CoinCorner manages the Bitcoin. They take care of routing, lightning channels, and liquidity.
Users can then create a lightning address, known as an LNURL, to receive zaps. Think of the LNURL as an email address but for money. By adding this address to profiles on platforms including Orange Pill App, Geyser Fund or Nostr, users can now receive Bitcoin from users all around the world, instantly and at almost no cost.
Crucially, there is seldom a Zapping middleman and it works well with micropayments, such as Degroot’s 300 Sats payment. Money remitters such as Paypal, Western Union or Wire Transfer charge a fee to route money around the world but are ineffective for micropayments due to high fees.
Zapping removes the need for a middleman, which also removes a money-making opportunity. Pellegrini explained: “It doesn’t cost us anything when users Zap each other and we don’t, nor shouldn’t, make any money off it.”
Brian Armstrong, the CEO of Coinbase, the United States’ largest crypto exchange, recently confused a Lightning Address–or Zap address–for an email address. It’s fair to say that Zaps are yet to light up the mainstream crypto conversation.
Back to Degroot’s Zapathon. The Canadian “Messaged and zapped every single person on the Orange Pill App who has a lightning wallet attached to their profile,” he disclosed to Cointelegraph.
“I want to contribute to the community more and I thought this was a way I could contribute and I could increase bitcoiners in my network. A way to find more signal.”
But while Degroot expanded his network, gaining hundreds of X (formerly known as Twitter) followers, the generous act also demonstrated the power of the Lightning Network’s money transfer mechanism. Degroot Zapped 300 Sats (less than 10 cents) to someone living 16,000 km away in South Africa, expressing: “It settled in a second and there was no fee for it.”
“I used to own a business and if someone paid us with a credit card before a weekend it could take up to 5 days for those funds to reach our bank account, and cost ~2.5%.”
Degroot also Zapped me (please note this was NOT a bribe to write this article!). It cost nothing despite that we are separated by the Atlantic Ocean.
Zapping on NOSTR
While Orange Pill App, Geyser Fund (a crowdfunding platform) and Stacker News are Zap-arenas, the tipping feature is increasingly popularised by Nostr, short for or Notes and Other Stuff Transmitted by Relays. In its present form, Nostr is a decentralized alternative to centralized social media platforms such as Twitter or Reddit.
Nostr is a protocol that comes to life by integrating with clients such as Damus (for iPhone), or Snort (for desktop). Nostr recently reached 4 million users while hundreds of thousands of dollars worth of Bitcoin has been zapped across the world. Curiously, the “like” button does exist on Nostr platforms, but Zaps are sometimes favored over likes.
Why are people giving out free money on the Internet?
Zapping is a Bitcoiner behavior that, at first glance, doesn’t make a lot of sense. Why give out Bitcoin to strangers on the internet, knowing that Bitcoin is a scarce asset? There are only 21 million Bitcoin, or 21 quadrillion Sats and it’s highly unlikely that more will be mined.
Jeff Booth, founder of Ego Death Capital told Cointelegraph: “So for people in Bitcoin and on Nostr, that economy is emerging, and it’s really early.”
“For people that aren’t in that world, they wouldn’t see what we’re talking about. If you’re measuring from the existing system, you don’t know what we’re talking about.”
I asked Nostr users why they sent Sats. The responses were light-hearted, fun and moving. BitcoinSandy a Nostrich (a Nostr user), explained that “It is a really good feeling sending instant value to someone likeminded who values freedom.”
Manlikeweks explained that Nostr’s borderless and censorship-resistant properties are awesome, particularly “As a person based in Tanzania and being funded worldwide without any restrictions.”
Zapping also taps into the trend of Value for Value or creator compensation. Digital creators can monetize content directly, without the need for a middleman.
BitcoinBarry explained how it works in practice: “I often try to give answers where I can and am rewarded to give better than suboptimal answers too.” I.e – if you post useful content on Nostr, you may be rewarded with a bountiful Zap — much like you would tip a waiter in a restaurant for excellent service.
Nostrich JoeLibertarian spelled it out: “Sats speak louder than likes.” You can like a post on Nostr, or you can send the post Sats to truly express satisfaction and gratitude.
Nostr is not without hiccups. Apple recently delisted Damus from the App Store due to the Bitcoin tipping feature. Apple said Zaps violate payment policies: “If they [users] are connected to or associated with receiving digital content, they must use in-app purchase in accordance with guideline 3.1.1.”
Nonetheless, Nostr is a protocol, not a centralized service. Clients similar to Damus have since popped up on the Apple App Store, such as Plebstr.
Regarding Orange Pill App, Pellegrini explained to Cointelegraph that there is no risk of being de-platformed by Apple. Why? Pellegrini explains, “We gave Tim Cook [Apple CEO] a free Orange Pill App membership!”
“Joking aside, there’s no feed on the app so the zapping is via profiles, that are not classified as content unlike notes / tweets.”
Apple can continue its crusade of Nostr platforms where content can be easily monetized, but as a popular Nostr-Creator Walker points out, Nostr is“A freedom-loving hydra.” If you remove one Nostr-playground others will pop up:
Meanwhile, Degroot’s quest continues. He hopes to Zap every user on Orange Pill App, buoyed by the enthusiasm he’s met with from fellow users:
“My Favorite response was ‘Thank you for sending me those sats I have never been zapped before you made my day!’”
He concluded the experiment on August 7, telling the Zap-curious to “DO IT”.
Ultimately, Degroot regularly zapped profiles who received their first-ever Sats. Pellegrini summed it up sweetly: “After all, who doesn’t like some sweet sweet sats?”
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