My understanding is that, for $3 the author creates a transaction from some wallet of N bitcoins under the author's control, that has a distribution of:
0.000000001 to <hash of document>
N - 0.0000000001 - <fee> to owner's wallet #2
<fee> to miner
So the $3 doesn't buy you any bitcoins, since the address that is the hash of the document isn't a valid bitcoin address since it wasn't generated from a public/private key that is known.
You understand it exactly correctly. Also, I'm sending those transactions with 0.01 BTC (~$1.3) in fees, which is roughly half the $3 payment (after credit card processing fees).
The user can input whatever address they want, so technically they could use it to buy Bitcoins, but still - the amount is really tiny and insignificant, and it'll be highly non profitable ($3 for bitcoins worth ~$0.0000013).
Comments
My understanding is that, for $3 the author creates a transaction from some wallet of N bitcoins under the author's control, that has a distribution of:
So the $3 doesn't buy you any bitcoins, since the address that is the hash of the document isn't a valid bitcoin address since it wasn't generated from a public/private key that is known.You understand it exactly correctly. Also, I'm sending those transactions with 0.01 BTC (~$1.3) in fees, which is roughly half the $3 payment (after credit card processing fees).
The user can input whatever address they want, so technically they could use it to buy Bitcoins, but still - the amount is really tiny and insignificant, and it'll be highly non profitable ($3 for bitcoins worth ~$0.0000013).
It's a nice touch that such a large percentage of the Paypal price goes to the miners.