Re: Micropayments: myth?

[Brian Behlendorf <brian@organic.com>]

On Wed, 5 Jun 1996, Nick Szabo wrote:
> Consider a feature fairly independent of the particular payment system: 
> the statement of charges.  Here lies a tradeoff here between completeness 
> and complexity.   On the one hand, merely summarizing charges creates 
> the opportunity for salami frauds, allowing widely distributed false or 
> exaggerated microcharges to go undetected.  Furthermore, parties reading 
> only the summaries get no feedback by which they can adjust their behavior
> to minimize costs.  On the other hand, a statement too complex to
> be easily read also allows fraud, error, and inefficient usage to 
> go unrecognized, because one or both parties cannot understand the 
> rationale for the charges in relation to the presumed agreement on
> terms of service and payment. 

When we are faced with a complex set of interactions with which we expect 
the average person to not only be able to understand, but use, then it's 
always helpful to use metaphors.  Consider the following:


  Many people drive cars.  Those cars require gas.  Gas is "spent" in 
very small amounts at any discrete moment in time, but those who use cars 
are used to paying for gas in lump sums and not necessarily fretting 
about the state of their "gas balance" at every step of the way.  People 
who drive cars have two valuable metrics to gauge their usage of gas and 
the rate at which they spend it: the speedometer and the feul tank 
levels.  When people drive fast, their speedometer is high, and they know 
they are burning gas at a faster rate than when they drive more slowly 
(compensated by the fact that they are getting somewhere faster).  People 
are also used to refilling their gas tank when they get low.


Now, let's consider bridging this metaphor into the micropayments world.  
Imagine that surfing the web is like driving a car - you'll dribble out 
small amounts of money over a period of time, but as long as you watch 
your speedometer (the rate at which you spend money) and the feul tank 
levels (the amount of coinage in your wallet), you are in control of your 
spending rates.  Whether you approve every micropayment explicitly, or 
you set a minimum level below which requests for payments are automagically 
granted, is up to you.  Me, I'd probably be alright with just about any 
site I go to asking for less than $.02 for any action I take.  Anything 
above that, I want to be explicitly asked.  My user interface has a gas 
gauge and a speedometer in the upper-right-hand corner instead of a 
throbbing "N".  When my levels are low, I go visit my bank and "refill" 
my wallet.  Voila!

The billing happens, as others have previously noted, entirely at the 
client side.  There's no reason the wallet or web browser can't keep a 
log of expenditures, and there's no chance for spoofery at that point 
(the wallet knows where it sent money).  

And yes, I am presuming a system involving transfers of digitally signed 
tokens of some sort.  I don't think this is a mistaken presumption.  

	Brian

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