From: "Stephan Vladimir Bugaj" <stephan@studioarchetype.com>
Date: Wed, 12 Jun 1996 17:06:12 +0800
To: "Vladimir Z. Nuri" <vznuri@netcom.com>
Subject: Re: Micropayments are Crap
In-Reply-To: <v03006f04ade3579bc415@[204.162.75.169]>
Message-ID: <v03006f00ade3a25564ae@[204.162.75.169]>
MIME-Version: 1.0
Content-Type: text/plain


>... how much data
>mining is starting to catch on and the positive, quantifiable
>returns it is generating.
>
Returns for whom?

>can people "automagically" take money from your ATM card? nope. in the
>same way, your microwallet will be secure. it will be even more secure,
>because less money is involved.
>
How much money is involved would be up to the consumer.  It would be as secure
as a normal wallet, excepting that I don't usually give people permission to
open my wallet and take money out at regular intervals.

[...]
>can ensure that the money is transferred. the data is not delivered
>unless the payment is received. scam artists can be caught with
>"better business bureau" type rating services.
>
Any cryptographic system has ways to circumvent it.  Whether or not they
are practical is the issue.
As for scam artists, perhaps we could have a scam-artist bit along with
the age bit ;)

>the poster clearly suggested payment PER TIME as a limit.  a pretty
>obvious concept, and easy to implement, don't you think? why does it
>figure as one of your major objections?
>
Because the time limit can be set ridiculously low, making the rates
artificially high from the viewpoint of the kind of time periods that
humans work in.

>it won't happen with micropayments either, because it will be *your*wallet*
>that tells you when it is has an opportunity to pay. no one is dipping
>into your wallet, metaphorically. the actions are always initiated by you.
>
The action of going somewhere that charges a metered rate is initiated by the
user, however to make this safe for the consumer it would have to be required
that there be a 'front door' for every site that charged metered rates
announcing that if you proceed you'll be billed (and, at what rate).  If you
let people charge as soon as you hit their URL, that's malarkey.

>somewhat. mainframes aren't totally the mark of the devil. don't you pay
>your internet provider per hour? how many people do? isn't a Sun pretty
>
No, I don't.  I use it too much, so I found an ISP that does not charge metered
rates.  A lot of people pay by the hour for their ISP, but it may or may not
be a wise idea for them.  If it's part of their work and they're online all the
time, they should consider another payment system.  Same thing with charging
micropayments for using software.  If Adobe started charging me $5/hr to use
Photoshop instead of $500 for the package, I'd stop using photoshop.  In two
weeks I'd have already exceeded the price of the whole package.

>much equivalent/similar in processing power & capability to old mainframes?
>you raise all kinds of objections that make no sense to me.
>
Sure it's the same power as an old mainframe.  Big deal.  What exactly does
that
do to stregnthen your argument?  It's certainly not as costly to build, costly
to maintain, or rare as old mainframes...

>the user is always free to go where a better vendor gives him what he
>wants. because the user can now pay in tiny increments, he has enormous
>increase freedom. he can move between different services far more readily.
>no body is FORCING anyone to spend money.
>
The potential for scams exists.  Certainly even a priest in the church of the
free market can see that.  User education is poor, and consumer protection laws
are weakening.  This does not bode well fo r

>uh huh. what if over your lifetime it cost far less than you pay for
>a shinkwrapped package?
>
If that happened, I'd be very suprised.

>what if you only needed a quick compilation on
>a system you don't normally use? I think you will begin to figure out
>some advantages if you use your imagination to find them (instead of the
>drawbacks)
>
That is a good advantage, you are correct in this.  But there are a number of
instances in which I'd still want software running on a real workstation.  If
people make software only available through micropayments, then that would be
limiting to both the user and the vendor.

>you have this concept of "automated billing" that simply doesn't fit. people
>know how much they are being charged. the payment is UNDER THE COMPLETE
>CONTROL OF THE PAYER, NOT THE BILLER. this simple misconception seems to
>underly a lot of the micropayment objections I've been seeing.
>
The payer could set a certain amount of money that is automatically deemed
acceptable to pay, like the $.02/time-unit example.  This could get misused
by a vendor who chooses a unit small enough that a small per-unit charge
quickly
adds up.  The payer essentially loses control of payment.

>or, it may be that entire new industries spring up because the software
>companies are better able to be compensated for their work from skittish
>consumers. people may be more free about spending micropayments than
>buying shrinkwrapped software. psychologically I think micropayments
>are far more appealing in some ways.
>
In some ways.  But those of use who use certain packages heavily would get
shafted for our loyal support of a vendor if they decided to pander to the
skittish masses and charge a rate that was psychologically more appealing
to
those who wouldn't otherwise use it.  I only hope that vendors who choose to
use micropayments (since they're inevitable) take the small but loyal power
user segment into consideration when making the decision about whether or not
to stop selling full packages altogether.

>admittedly some things have to be in place: a high speed network, and
>other infrastructure ideas. it isn't totally feasible today in cyberspace,
>but large parts of it are and are already being implemented (chaum's
>digicash)
>
The best model is not the mainframe model promoted by the idea of the "internet
computer" (aka. Mutant X-Terminal), but a truly distributed system.
Workstations and PCs can contribute their substantial processing power to a
distributed system.  The other problem I have with the mainframe model and
centralized resources is storage.  It's bad enough to have to wait in line for
a CPU, but the idea of having no direct access to my work is unappealing,
and for a number of industries impossible.  I doubt designers, for example,
would
be willing to leave client work on the big Illustrator server cluster at Adobe.
Fat pipes connecting fast PCs to even faster servers is the best route.


>false, imho. imagine that I can buy only the shows I want to watch, and it
>>out to less than my $20 monthly cable bill. economically this is perfectly
>sensible. people want to pay for what they watch. you seem to think that
>
I was looking at this from a vendor viewpoint in this particular instance.  The
TV old guard may not be willing to give up all that big, fat (and reliable) ad
revenue to the whim of John and Jane Q. Tvwatcher.

>micropayments means "everything costs more". a strange assumption. what if
>I assume, "everything costs less" because billing costs, which other
>posters have pointed out are so enormous, are vaporized?
>
I'd like to see them vaporized.  Billing costs are the swindle of the decade.
I'm quite tempted to cut up both my credit card and ATM card because of the
bullshit administrative fees involved with using them.  Internet transaction
fees are even worse.

>it is true that some industries will change and meld into other forms
>with this new revolutionary form of payment.  welcome to the concept of
> an economy in which anything that is stagnant tends to die.
>
Yeah, but the old tends to cling on for dear life.  Welcome to the concept
of people and institutions that are unwilling to change and do their best to
postpone those changes.

Change doesn't bother *me* personally, I just wish more people would *think*
about whether or not changes are *appropriate* instead of just *possible*.

>right. shows that are not watched are going to go extinct. why should
>advertisers fund them? you think that advertisers have to be fooled
>to pay money to a show?
>
They are now.  It was a pragmatic point.

>that's correct. why do you suggest it would be an infeasible apocalypse?
>it might be an apocalypse of old concepts, but it isn't infeasible.
>
That's not infeasable.  I didn't say anything was infeasable, I just think
some of the current models of how things might work are bad ideas and encourage
debate.  Both consumers and resistant old-school vendors will have issues to
address, and ramming change down people's throats because it's inevitable or
'the market dictates it' is a crappy attitude which I don't encourage.  Also,
note for the record that I don't believe that "the market" is a one-to-one
mapping on to "the people" or even "the consumer".

>false, imho. again the consumer maintains complete control. in a sense
>they have far greater control. if they don't like a company they
>can go somewhere else after only spending a micropayment instead of
>a macropayment. you may find that companies increase their level of
>service and customer satisfaction. but there will probably bogus uses
>that apparently you will gravitate towards, based on your seeming
>preference for them.
>
Ha ha ha.  Yeah, looking out for consumer interests is just doom saying and
negativism.  The current education level of the general public about computers
is low, and about transactional security is even lower.  It can have benefits,
but there are also serious issues which need to be considered.  Another thing
about the paying a micropayment instead of a macropayment and leaving if
you don't like it - a lot of companies offer free trial time with their
service, or a free consultation, etc.  The effects of charging for these
trial offers is
unclear - how would that be good for the consumer?

>imagine shareware authors getting cash for their programs based on their
>actual use. imagine artists and writers bypassing corporate monoliths
>and marketing their work to the public directly, bypassing the enormous
>scrape-off that these self-perpetuating bureacracies snarf.
>
This is a good idea.  It could be a good boon for small businesses (unless
the transaction providers charge prohibitively large fees for their
services...).  I hope you're right and I'm wrong.  That would be much better
for all involved.

>you seem to start from the assumption, "businesses are out to shaft the
>little guy". well, that can be true whether you have micropayments
>or not. I doubt micropayments would make it any worse. it won't solve
>the problem (I agree there is a great greed in places) but it may actually
>make it far more difficult for companies to shaft people, once you think
>about it. remember, the consumer has total control. how can you get
>shafted when you have total control?
>
Your argument works provided the consumer really maintains control.
You can lose that control.  There do need to be safeguards in such a system
that ensure this control.  $.02/nanosecond is, after all, $1.2 billion/minute.
If such a setting were allowed and people habitually allowed $.02/unit
metering as being automatically acceptable, that could clean out a number
of digital
wallets very quickly as unsuspecting customers entered the paid area and
instantly got dialogue boxes announcing that their wallets were empty.

ttl
Stephan


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