From: "Vladimir Z. Nuri" <vznuri@netcom.com>
Date: Wed, 12 Jun 1996 17:24:40 +0800
To: "Stephan Vladimir Bugaj" <stephan@studioarchetype.com>
Subject: Re: Micropayments are Crap
In-Reply-To: <v03006f04ade3579bc415@[204.162.75.169]>
Message-ID: <199606112120.OAA29300@netcom2.netcom.com>
MIME-Version: 1.0
Content-Type: text/plain



once again, I am confused why this micropayment thing is
considered so controversial and questionable to some. it
seems at the forefront of sensibility to me. clearly we
are struggling with different conceptions/preconceptions
of something that doesn't yet exist.

>As far as I'm concerned Micropayments as appealing to me as Data Mining. 

an interesting way to start off the essay, considering how much data
mining is starting to catch on and the positive, quantifiable
returns it is generating.

 I
>certainly see how my wallet would benefits from being on the receiving end of
>the money and/or information, but I can also clearly see the detrements of
>being the one whose money and information was "automagically" being
>appropriated.

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.

> but try convincing a vendor who is already suspicious of
>'all this computer stuff' that you really sent them some money and a savvy
>hacker pilfered it all - log or no log.

there is no "convincing someone". people are using the idea of 
handing over money, of bills, etc-- all this makes no sense. it is
all handled at the transaction level. there is no subjectivity. the
vendor either received the cash or not. the cryptographic protocols
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.

>Setting a micropayment enabled web browser to automatically grant approval to
>payments of $.02/action may seem reasonable, but it depends on what the vendor
>has decided constitues an action. 
> If somone charged $.02/nanosecond for
>retreiving shareware from an FTP library, and my browser was set to accept this
>as reasonable based on the fact that it was $.02/action,

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?

>This doesn't happen with phones (well, not as much).  The virtual nomadness of
>wandering the net leaves a lot of people - even otherwise careful people -
>vulnerable to rate traps.

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.

>Micropayment proponents are incredibly fond of the proposition that software
>could be leased on a usage time basis from a centralized server, and people
>could also rent time on the servers' CPUs.  Sounds an awful lot like the
>mainframe days to me. 

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
much equivalent/similar in processing power & capability to old mainframes?
you raise all kinds of objections that make no sense to me.

 I see plenty of ways in which this benefits the
>vendor
>(greater control over distribution, centrailzed revision/upgrade distribution,
>greater profits over one-time sales, etc.), but no ways in which this benefits
>the user.

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. 

  Especially the power user.  I'm certainly not going to rent time
>on a compiler or image editing program every single time I want to do some
>work.

uh huh. what if over your lifetime it cost far less than you pay for
a shinkwrapped package? 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)

> As a
>programmer, I can
>see how I could make a fat chunk of change by bilking people through metered
>software usage, but as a software consumer it seems like a rotten idea. 

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.

 One
>effect it would have, however, would be an exponential increase in the quality
>and quantity of software available from the Free Software Foundation and
>other similar groups as people like myself fled en-masse from commercial
>software to a
>system where we knew what we were getting into ahead of time.

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.

>The other rotten part of this idea, of course, is the irritating lag times
>involved with trying to run distributed software (especially poorly
>distributed
>software, and especially on an overloaded network infrastructure).

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)

>Looking at micropayments from the (economically) conservative element
>viewpoint within certain industries make them seem a lot less appealing, as
>well.  Take television.  If people had to purchase every TV show they
>watched, there would be a lot less TV production going on because there
>wouldn't be as much random TV watching.

false, imho. imagine that I can buy only the shows I want to watch, and it comes
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
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?

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.

   No matter how stupid you may
>think your customers are, if you change their pay structure they think
>about it - even if only briefly.  It would also be harder to sell TV
>advertising, because if nobody was watching a show everyone would know
>because this would be metered even better than current rating systems. 

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?

 The
>nature of the TV advertising industry would change because instead of the
>archetypal/statistical sampling of Nielsen ratings, you'd know *exactly*
>who was watching what.

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.

>Both micropayments and data mining require that the user give the vendor a
>level of trust which most vendors are not willing to repay with similar
>trust and customer satisfaction.  Customer-users are expected to give
>vendors greater access to and control over their money and personal
>information, yet at best they can expect the same poor customer service and
>bureaucratic attitudes encountered when dealing with traditional
>transaction processing companies and at worst can expect to be swindled out
>of piles of money and/or have their
>privacy violated as a matter of course.

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.

>Working where I do, everyone around me is on the side of the vendors - who
>make up part of our client base.  On cypherpunks, of course, I'm largely
>preaching to the converted.  There can be a middle ground, however the
>middle ground that's been offered so far still leaves the consumer with the
>sort end of the stick and
>I'm not convinced they're ultimately what's best for business - especially if
>you cling to seemingly outdated ideas like good customer relations, good
>public/social relations, and long range growth relationships over short
>term
>profit pumping.

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.

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?