How Do ERC-948 Ethereum Blockchain Subscription Services Work
Some companies that want to create a subscription-based model on the Ethereum’s blockchain are finding it difficult due to Ether’s highly incompatible properties. Consensys unveiled in a blog post that there is a new token protocol proposal that would be able to connect subscription businesses with consumers.
ERC-948 Ethereum Blockchain Subscription Services
Kevin Owocki, the founder of Gitcoin, was the one in charge of initiating the protocol proposal on GitHub. The post released by Consensys makes a summary about how the subscription economy works and how an ERC-948 token protocol would facilitate subscription-based transactions.
A study released in 2018 explained that 15 percent of online shoppers were subscribed to an e-commerce solution in 2017. And indeed, this kind of economy seems very popular among consumers. Unfortunately, there is not a token compatible with this economic model on the Ethereum network. Here is where the new ERC-948 token protocol appears.
Currently a subscription model using Ether seems complicated and stressful for consumers. Moreover, it doesn't seem very scalable for businesses neither. Instead, Owocki suggests an opt-out method instead.
The post reads as follows:
“The ERC-948 protocol proposal provides an opportunity for developers to build a platform off of which companies can leverage an economic model that has proven valuable in the retail and software economy in the past decade. If a common standard were built for subscriptions, it could further attract more consumer-facing companies to blockchain technology. And though much blockchain rhetoric lambasts the old and celebrates the new, we should keep an eye towards the incentive structures that have proven successful in our current economy, the subscription economy is certainly one.”
The ERC-948 protocol proposal seems a very good idea for developers. Additionally, companies would be able to leverage a proven, and existing economic model.