What is a streaming payment?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 4 min
In short
A streaming payment releases funds continuously as time passes — salary accruing by the second, or paying only for the minutes actually watched. It reduces the exposure created by prepayment or month-end billing, but raises new questions about stopping mid-stream and keeping the balance funded.
Key points
- Funds are released continuously as time elapses
- Reduces the exposure of prepayment or month-end billing
- The rules for stopping the stream become the key term
- The stream halts when the payer's balance runs out
Definition
A payment method in which a total amount is spread over a period and becomes withdrawable in proportion to elapsed time, with a smart contract tracking the balance and the clock.
The mechanism is straightforward: the payer deposits funds into a contract and the recipient can withdraw whatever has accrued. A month's pay divided across thirty days becomes withdrawable second by second, on whatever schedule the recipient chooses.
The benefit is that neither side builds up a large unpaid exposure. The recipient can always draw what they have earned so far; the payer recovers whatever was never streamed. It suits ongoing services well.
In practice the sticking point is how the stream stops. If the payer can cancel unilaterally, the recipient bears the risk of income ending mid-period. If nobody can stop it, payment continues even after the service does not. Which way to lean depends on the contract.
Watch out for
- · Payments stop the moment the payer's deposited balance runs out
- · Starting without checking the cancellation terms risks income ending abruptly
- · Each withdrawal costs a fee, so frequency affects the net amount