From: "Vladimir Z. Nuri" <vznuri@netcom.com>
Date: Thu, 1 Oct 1998 18:20:04 +0800
To: cypherpunks@cyberpass.net
Subject: microcurrency proposal
Message-ID: <199810012320.QAA27969@netcom13.netcom.com>
MIME-Version: 1.0
Content-Type: text/plain




recently James Donald wrote some well-thought-out/reasoned comments
on digital currency and microcurrency.

I've been talking about microcurrency for many years on this
list, and am quite chagrined lately at how long it is taking
to actually materialize. I would have thought it would be
available, for web pages especially, by now.

the new scaled-back goals of Digicash are disappointing, but
a good reality check.

musing over all this is leading me in the following direction.

a few months ago or so I posted info about a company that
was doing a plugin for netscape that allowed some small currency
transactions. I don't know what happened to this company--
does anyone remember who it was, or their web site?

but I think this is a very promising approach. a company
can create a plugin that would support microcurrency charges
for web page hits very easily. 

here's how: the plugin interacts with any site that has
enabled it. it sends a code to the site using a protocol.
the site returns pages only upon a valid transaction request.
for regular browsers without the plugin, the message is,
"sorry, this page costs $.01, please download so-and-so
plugin".

people are very willing to download plugins to look at pages.
people download plugins just to look at animation boxes.
surely they will be willing to download them to serve up
entire pages/content.

how would the cash charge work? when the person gets the 
plugin, they give the plugin company their credit card
number. the company takes care of the problem of accruing
micro charges, keeping track of transactions/bills, and 
billing the credit card in large amounts.

contesting a charge would tend to happen very rarely (because
of the small charges, it is barely worth the effort), but
the system could still support this.

the problem is trying to transfer money to various individuals
if their microcharge accounts have a net positive value instead
of negative (in which case they would be charged their credit
card at the end of the month). how do you transfer this money?

one possibility is sending a check at the end of every month,
or quarter, somewhat similar to the Amazon associates program.

another possibility is figuring a way to credit a credit card
account. this can be done, but from what I understand it is
"frowned upon" by the companies. I have always wondered if
the "powers that be" have intentionally tried to enforce this
so that credit cards cannot turn into a cash transfer mechanism.

of course, I'm leaving the issue of taxes out of this, but
the microcharge company could be a point of collection for
them.

notice that none of what I am proposing above requires any
new infrastructure whatsoever, except a little programming
into a plugin. the distribution of the plugin is partly solved
in that plugins are already distributed all over the net
and understood by end-users.

such a plugin could rapidly become the standard for
"microcurrency" and be a wedge that might be the creation
of a whole new industry within an industry. i.e.
microcurrency on the web, very much the way Netscape virtually
singlehandedly created the entire industry of the web within the 
existing internet.

the door is wide open. such a company could be a very lucrative
endeavor if handled very delicately and carefully, navigating
the minefield of glitches that are surely to be present (many
of which have prevented it from happening to date)

as I understand, the digicash software was not in fact
in plugin form for a browser. this is a pretty serious
handicap imho. the technique of turning it all into a 
browser plugin based on the existing credit card system
seems to me to be the crucial element that could make
it happen.