From: "Clay Olbon II" <Clay.Olbon@dynetics.com>
Date: Thu, 13 Jun 1996 06:24:35 +0800
To: "Stephan Vladimir Bugaj" <vznuri@netcom.com>
Subject: Re: Micropayments are Crap
Message-ID: <ADE43BCA-8C08F2@193.239.225.200>
MIME-Version: 1.0
Content-Type: text/plain


I apologize in advance for this overly long post, but Stephan had a number
of arguments that I disagree with quite strongly.  In general, I think
micropayments are a good idea that should be tested where it counts, in the
marketplace.

	Clay

----------
Stephan Vladimir Bugaj <stephan@studioarchetype.com> wrote:

>Any cryptographic system has ways to circumvent it.  Whether or not they
>are practical is the issue.

How is this an argument against micropayments?  Lets just throw up our
hands and say that all crypto is theoretically breakable, therefore we
won't encrypt anything.

>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.

Huh?

>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.

Why is this malarkey?  What is wrong with saying "If you want to see my
page, it will cost you $.02?  Why would a "front door" make it any safer
for consumers?  I set my browser so that I spend no more than $1/hour or
$.02 on any one page without asking me.  How difficult is this concept?

>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.

Of course, there is lots of software that I only use once in a while, yet
spend large $$ on to have sitting on my machine metaphorically gathering
dust.  Micropayments would be very useful for this software.  On the other
hand, there is some software that I may want to buy outright.  This is not
an exclusive system.  BTW, any impression that you have that you are
currently buying unmetered software is false.  Don't you spend xx$/year to
run Photoshop in the form of "product upgrades" - or are you still running
version 1.0?

>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

I tend to disagree with most arguments for "consumer protection", so this
argument falls upon deaf ears.  There are lots of scams with every form of
money (cash, credit, even barter - if I trade you a lawnmower that only
runs for an hour afterwards, I have scammed you), how does this make
micropayments any more undesirable than any other form of payment?

>>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.

Name some software that you have used less than 10 times in the past year. 
If you use a computer much, you might be surprised to find that you have a
long list.  I know I do.

>>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.

What is to say that micropayments won't authorize an extended license for
software you have on YOUR machine - i.e. I download some software, to use
it for a day I pay $1 and get a 1-day license.  The software is local.  Of
course, this doesn't preclude you from paying $1 to run it on a
supercomputer that you wouldn't normally have access to ...

>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.

Wrong.  

>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.

Why would you be shafted?  Do you think vendors would be willing to throw
away your business?  Look at your previous example of the ISPs, some
individuals pay a metered rate, others a flat rate - why would software use
be any different?

>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.

Of course, now you can get credit cards thay pay you between 1% and 3% per
transaction ...

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

Why should people think about this?  Let the market decide - if people try
it and fail, it will go away.  If it suceeds, then it is obviously useful
to some consumers.

>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".

Well, the market works.  Sorry you don't believe in reality.

>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?

Those poor consumers, what would they do without you looking out for them? 
I personally could care less if someone gets scammed - let the buyer
beware.  

>>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.

If the fees are too large, NO ONE WILL BUY THEM!  Basic economics.

>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.

Do you really think people don't know the difference between $.02/minute
and $.02/nanosecond?  Do you think software cannot easily distinguish the
difference?  Let's argue from a basis in reality here!

>
>ttl
>Stephan
>
>
>-------------------------------------------------------------------
>This signature has been kidnapped by space aliens.
>If you find it you can call (415) 703-8748.
>I work for Studio Archetype, and they don't find any of this funny.


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Clay Olbon II            | Clay.Olbon@dynetics.com
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