From: Hal Finney <hal@rain.org>
Date: Sat, 18 Jan 1997 16:57:14 -0800 (PST)
To: vznuri@netcom.com
Subject: Re: microcurrency: Netscape vs. Microsoft
Message-ID: <199701182228.OAA00244@crypt.hfinney.com>
MIME-Version: 1.0
Content-Type: text/plain


From: "Vladimir Z. Nuri" <vznuri@netcom.com>
> I predict that microcurrency will not catch on in a big way
> until it is integrated with browsers, and when it is, it
> will be adopted in an insanely large rush like the way
> the web itself caught on with the GUI (and was mostly comatose
> before it).  
> [...]
> notice how much crypto really caught on when Netscape 
> incorporated it, and how this action alone did more for
> the proliferation of crypto in cyberspace, almost, than
> all prior efforts combined. I think that microcurrency
> will be unleashed in a very similar way.

I assume you are referring to secure web connections via SSL in talking
about crypto.  In that case there was a very strong pent up demand for
the service.  Customers were afraid to send credit card numbers and
other personal information across the web.  Sellers were pressuring the
net server companies to do something to quell these concerns so on-line
selling could succeed.  Netscape did it, and in the grand tradition of
the net, implementation beat design and SSL defeated SHTTP.  In its early
versions SSL had a lot of problems but it was a good enough solution for
what it needed to be.

The question is whether there is similar market demand for pay per view
web pages.  Do web service operators think they can offer value added
services which will motivate customers to click through the for-pay link?
Maybe porn would be a good initial market.  There are so many sites
where you've got to sign up ahead of time for $20 or so for a month's
membership.  This is a considerable barrier.  But if you could just take
a peek for $.50 there would be a lot of people interested.  Porn is what
started the VCR market before it later "went respectable", so maybe the
same thing could happen here.  I know that a lot of the initial vendors
with First Virtual were selling racy pictures, although I think the
company has taken steps to reduce their association with that market.

This is not exactly the microcurrency that Vladimir is talking about
but it would be a good model for integrating some payment system with
a browser and it could serve as the foundation for other for-pay pages
with lower fees.

There is also the issue of sellers learning to use the various payment
systems which are out there.  Here again if Netscape and Microsoft would
just pick one then everyone could standardize on it, which would
increase acceptance a great deal.

Ecash as it is implemented now has the problem that the customer has to
open a special bank account.  What you need is a payment system where
you can use your existing VISA card and withdraw cash against it into
your electronic wallet.  This is pretty close to the FV model but their
payment system is somewhat clumsy.

I haven't followed the electronic payment market closely for the last
couple of years.  Are there any payment systems which look like good
candidates for integration with browsers?

Hal