BitcoinFax: a Simple and Efficient Use Case for Bitcoin Micropayments

While Internet citizens find it strange that fax machines still exist, everyone still needs to send faxes at times – often to large legacy organizations, banks and public administrations that still live in the 20^th century. Sending faxes is difficult because almost nobody has a fax machine at home anymore, and going to a post office seems a waste of time to those accustomed to living at Internet speed.

There are, of course, Internet fax services that allow using a PC connected to the Internet to send and receive faxes. But Internet fax services require a subscription, which can be expensive. For example eFax.com, probably the best-known Internet fax service, charges $17 a month for a basic subscription, plus 10 centers per page after the first 150 pages. That seems far too expensive, since most people don’t need to send more than one or two faxes per year.

Reasonably priced pay-as-you-go plans without subscriptions would be ideal for sending faxes when the need arises, but the overhead costs of traditional payment systems make that difficult to implement. The problem is that paying costs money – bank wires, credit card payments, and even PayPal have fixed transaction costs. If sending a fax over the Internet costs, say, half-a-dollar, it doesn’t make sense to pay one dollar to cover transaction costs. Therefore, most Internet fax service providers use subscription-based pricing, but buying a subscription doesn’t make sense to casual users.

BitcoinFax has now entered the market as a new Internet fax service that allows sending faxes anywhere in the world with no sign-up required. German developer Simon Males announced the service on Reddit saying, “Thought I would support the Bitcoin economy by helping those who still need to send faxes from time to time.” Many posts to the Reddit discussion are enthusiastic.

The user interface is very simple: The user needs only to enter a fax number anywhere in the world, upload a PDF document, and send. Payment is in bitcoin, with fees that range from 11 cents USD to send faxes to Japan to $7.58 to send faxes to places such as Afghanistan. Most countries in Europe and the Americas are priced at 17 cents per fax.

According to user feedback on Reddit, the service works well, and sends faxes a few minutes after the payment has been sent.

BitcoinFax seems a very good Bitcoin business model. The developer has identified a simple need and a market – the casual users who still need to send faxes every now and then – and provided a solution based on a unique advantage of bitcoin payments – fast and cheap micropayments.

In a recent blog post, Coinbase offered ideas for Bitcoin micropayments applications and business models.

Internet pioneers such as Ted Nelson, Marc Andreessen and Tim Berners-Lee thought that the Internet should have a built-in framework for micropayments. Berners-Lee tried to include micropayments in Web protocols, but the idea was never implemented. Now Bitcoin provides an ideal framework for Internet micropayments, which enables new, simple and efficient business models.