Yet Another Micropayment Protocol - QuickTopic free message board hosting

5

Hal

07-31-2000

08:31 PM ET (US)

The actual proposal is not a micropayment protocol. It doesn't go into any details about how the payment is done. What it does is attempt to provide a framework for how an artist can embed information in the mp3 file which will allow establishing a secure channel to him so that payment can occur.

I don't understand why all the micropayment schemes have failed. PayPal/X.com has been a big success. I frequently use it for small transactions of a buck or two. E-gold had some kind of system where you could send two cents to writers you like. If something like that could be done with PayPal it could become popular. There are so many cases where it would be nice to be able to easily send someone a penny. If there are problems, they aren't technical nor social, they are economic: providing a payment infrastructure with overhead low enough to allow micropayments while still being profitable for the provider.

As far as the MP3 idea, the big problem is that people may substitute their own addresses for payment. The proposed solution is to call the cops. Sorry, that won't work very well on the net.

What you want is a way to say, given an MP3 file, who was the original author of this file? You could do some kind of hash of the file (a "fuzzy" hash so that simple alterations of the file will produce the same hash value), then look it up on Freenet and find the key of the owner. As the initial creator of the file he would be the first person to insert a public key under the file's hash, and no one else could take it over.

The problem with this is coming up with a hash that has the desired properties, given the many ways that digital music can be manipulated without impairing audibility.

Hal

4

Dr. mike

07-28-2000

02:14 PM ET (US)

The first message says it all - people don't pay if they
can get things for free! The first step is to make the
real payment small enough to be acceptable, say $1 to $5.
And that should last a while. You have to solve the
"entry" problem first - how does "real" money enter into
it, and what does the customer get *immediately* in
return?

Understanding human psycology is imperitive here. If
people hand out real money, they want real goods in
return. If this can be set up so people can order a
CD which will have all the software on it, plus their
initial cash, or some other similar combination, it
may be able to fly.

But surely, studying the previous failures is essential!

3

dhm

07-28-2000

01:01 PM ET (US)

I've long thought that you could use the net to set up "barter cycles" that would be more complex than what's typically seen in meatspace. (E.g. Alice has a dog but wants an electric guitar; Bob has a guitar and wants a new piercing; and Carl runs a pierce parlor for which he needs a watchdog.)

You could use "digital wampum" to extend trade cycles like this over time and perhaps even avoid the scrutiny of the "Just Say No to Money Laundering" folks.

2

Ted Anderson

07-28-2000

09:16 AM ET (US)

To contribute a bit of actual input, this morning I saw a CNET report on the internet barter economy[2]. It briefly speculates on the future of all the virtual currencies these barter sites are creating. Could this be another niche for digital currency?

[2] http://home.cnet.com/techtrends/0-1544320-7-2259585.html

1

Ted Anderson

07-28-2000

09:11 AM ET (US)

Jeff Kandt started a discussion on coderpunks@toad.com with the subject "Kill the RIAA: a protocol", pointing to his "Route around the labels" proposal: http://wmf.editthispage.com/discuss/msgReader$1469

Pat Farrell responded with the following message. I suggest we continue the subject here.

Date: Thu, 27 Jul 2000 12:20:49 -0400
To: Jeff Kandt <jeff@scrollbar.com>, coderpunks@toad.com
From: Pat Farrell <pfarrell@pfarrell.com>
Subject: Yet Another micropayment protocol [was: Kill the RIAA: a protocol
Cc: pfarrell@pfarrell.com

At 01:30 AM 7/27/2000 -0400, Jeff Kandt wrote:
>Maybe all we need is a system to make that easy.
>To get the ball rolling, I humbly submit a protocol for a voluntary
>payment mechanism.

I don't see why yet another micropayment protocol is needed.

More specifically, I do not believe that another protocol addresses the real problem behind small and micro payment schemes. There have been many, from CMU's netBill, Chaum's DigiCash, CyberCash's CyberCoin, Mondex, etc. All have failed in the market. All of them. All of them had good to serious crypto protocols, and millions of dollars of venture/investment money.

I bet you could get the rights for some of these for a song, I know CyberCash would love to get something, anything, out of the millions they spent on CyberCoin. A promise of future royalties would probably do it.

Re: coderpunks, I spent three years at CyberCash writing protocols and crypto for eCommerce. It was fun. All the projects failed in the market. None of the code is still in use. I quit CyberCash nearly a year ago to chase after other Internet startup dreams.

Not Re: coderpunkls. But the failures of all the existing micropayment systems was not technical. Not that they were too weak in security, used the wrong crypto code, bad trust models, or weak keys. The problems are that there was no Market of folks willing to pay money for electronic goods. And somehow I believe that the millions of college kids swiping music using Napster and Gnutella are unlikely to be major economic players.

I'd love to continue a discussion on micropayment systems,
their strengths and weaknesses, why they failed, etc.
But this is not under the charter of coderpunks, so lets take it offline and into a email discussion. If you're interested, email me.

Thanks
Pat