Smartlike uses a pledge system to make micro payments possible. In this article we explain how that system works. If you are new to Smartlike, you might want to watch our intro video first:
Smartlike Pledge System
You know Smartlike allows you to send as little as one penny to your favourite authors and creators. You know that as one of those authors or creators you can earn money directly from your fans. But how does that work?
First here’s how it doesn’t work:
Until now, there was no way to actually transfer pennies. Even with the cheapest payment processor, sending a single penny would cost you 35 cents thanks to transaction fees. Microtransactions are simply impossible from reader to writer, consumer to creator.
The closest anyone gets to microtransactions is to act like a bank. You send 10 dollars to the app and then start clicking all the likes, claps, and hearts to dole out your appreciations for your favourite content and writers. At the end of the month, the app pays the authors from the pot, but only after they take their cut. So out of your ten dollars, your favourite writers only get some of the money you wanted to give them. The app is a business and no matter how wonderful their platform or community, they are in it to make money. They do that by controlling who gets how much, when, and sometimes, even why they get what they get.
App-makers not only control the money, they also control access and can censor authors by prohibiting participation, sometimes with what feels like moving goalposts.
Sound familiar? Of course it does. Because every platform and service you know does it.
Here at Smartlike, we think that this should be different. The app should be serving the community, not controlling it. We aren’t in it to grow the platform. We want to help the writers on it grow, connecting them to fans and fans to them. We think that when a fan wants to appreciate content with their hard-earned money, the content creator is entitled to that appreciation. All of it. Even if it’s just a penny.
But microtransactions are impossible, remember?
Not anymore. We sat down in our proverbial garage and created a system with which we can send and receive money, even just one cent, without Smartlike taking control. It’s what’s known as a peer-to-peer system. This is how it works:
You work hard on your content and put it up on YouTube. Hours of filming and editing has created “Ten Things That Suck About ‘Jurassic World.’ Your fan, Jane, comes to watch. She loves it and wants to support your ability to make more videos. So she gives you an appreciation (or a smartlike) on our app. This is not real money yet. It is a pledge. “I Jane Doe pledge 10 cents to this YouTube video because this creator is amazeballs.” Since she is already on Smartlike, our app helps Jane discover a few other rad videos, a few articles about dino-shaming in Hollywood, and a T-Rex Takes Texas Instagram feed. All the while she is handing out smartlikes. She can do this manually through a click or set it to automatically smartlike her favourite content.
Before long, your fan Jane has pledged 10 dollars through our app. She can now settle by paying ten of her real dollars. As the app is a peer-to-peer network, Jane doesn’t pay Smartlike. She sends the 10 dollars directly to the authors and creators. Smartlike just helps direct her ten bucks to the correct creators.
Let’s see how that works. Your Jurassic Video has already amassed 12 virtual dollars thanks to many appreciations from many fans. Jane’s 10 cents are not on that balance, since she hasn’t yet paid up. The dino-shaming has a balance of $11.50 and the Texas T-Rex Instagram has $27. These balances are still virtual. Now Jane gets to turn that virtual money into real money, paid directly to her favourite folks in the internet.
When Jane clicks on “Settle my pledges,” she gets a list of her favourite creators:
- Your movie reviews (including the Jurassic World one)
- Texas T-Rex Instagram
As we have learned, Jane cannot send real cents to everybody, but she can send her 10 dollars to one creator. She chooses you – yay! She sends her tenner to your Paypal account. That ten is deducted from your virtual balance on Smartlike, leaving you with $2 in virtual currency and $10 in your real wallet.
Next, all Jane’s pledged cents are transferred to the virtual balance of the creators:
Your “Jurassic World Sucks” review: $2 + 10 cents from Jane = $2.10
Dino Shamer: $11.50 + $0.07 from Jane = $11.57
Texas T-Rex: $27.00 + $0.25 from Jane = $27.25
Now, you have to wait a while until you have enough virtual balance to receive real dollars again. More fans, more likes, more virtual dollars earned. In this period, it is very likely that Dino Shamer and Texas T-Rex receive real dollars, either from Jane’s next settling or from another fan.
The more people are using the Smartlike network, the faster every creator will get real dollars.
This peer-to-peer network means Smartlike charges no commission, protecting your privacy and keeping us out of limiting content or censorship.
people have answered