Re: Micropayments: myth?

[Jeff Barber <jeffb@sware.com>]

Vlad the Imposter writes:

> >Telephone companies have found billing to be a major bottleneck.
> >By some estimates, up to 50% of the costs of a long distance call
> >are for billing, and this is on the order of a $100 billion per year
> >market worldwide.  Internet providers have been moving to a flat fee in 
> >order to minimize these costs, even though this creates the incentive for 
> >network resource overusage.  
> 
> imagine a user who controls his own wallet. he knows when he is paying
> from that wallet. you seem to have this idea that outsiders could
> make queries to that wallet that would be hard for the consumer to
> keep track of. this makes no sense to me. the wallet action will always
> be tied with some other action. the user picks up the phone to dial
> somewhere, and it says, "that will be .3c-- will you pay"? he says
> yes. 

I'm sort of a neophyte when it comes to digital cash, micropayments and
so forth but it seems to me that your example provides a fine platform
for discussing the problem.  How will you know the cost is .3c a priori?
What's to stop me from saying yes to the .3c and staying on the line
forever?  If you disallow that, how?  Will it cost the same amount if
I'm not sending anything as it will if I'm sending a live video + audio
feed?  If so, what's to stop me from bundling my whole neighborhood's
Internet traffic into this call?  If not, how will you tell the
difference without monitoring my usage and requiring me to pay for the
additional bandwidth I use?

Or are you saying that each IP packet will have an appropriately sized
digital cash payment attached?  That seems like too much overhead.
And besides, that contradicts your idea that the user would explicitly
approve each wallet access.

It gets even worse if you're an ISP, you obviously can't sit there
and approve each session that goes by (even if you could distinguish
higher level session boundaries which you won't be able to do).  Are
you just to assume at the end of the day that everything worked
perfectly and you received enough revenue to cover your costs without
knowing anything about the payment/usage profiles of any of your
customers?  And how is the ISP's network provider to know how much to
charge the ISP?


-- Jeff