174 lines
7.7 KiB
HTML
174 lines
7.7 KiB
HTML
|
<!DOCTYPE html>
|
|||
|
|
<html lang="en"><head>
|
|||
|
|
|
|||
|
|
<meta http-equiv="Content-Type" content="text/html; charset=UTF-8">
|
|||
|
|
<style>
|
|||
|
|
body {
|
|||
|
|
max-width: 30em;
|
|||
|
|
margin-left: 2em;
|
|||
|
|
}
|
|||
|
|
p.center {
|
|||
|
|
text-align:center;
|
|||
|
|
}
|
|||
|
|
</style><title>Net Money</title></head><body>
|
|||
|
|
|
|||
|
|
<p><a href="./index.html"> To Home page</a> </p>
|
|||
|
|
|
|||
|
|
<h1>Net Money</h1><p>
|
|||
|
|
|
|||
|
|
Net money. Net money that is reasonably liquid, that many
|
|||
|
|
people acquire, that many people spend, money that is
|
|||
|
|
readily convertible to worthwhile goods and services. Don’t
|
|||
|
|
worry about blinding and all that. Once any sort of net
|
|||
|
|
money is flowing in large amounts, all that stuff then
|
|||
|
|
becomes possible and desirable. If there is no liquidity,
|
|||
|
|
nobody cares about blinding, and if you have blinding it
|
|||
|
|
does you no good anyway without liquidity. </p><p>
|
|||
|
|
|
|||
|
|
Once we get that, we will shortly get it all. As long as we
|
|||
|
|
do not have that, we have very little. </p><p>
|
|||
|
|
|
|||
|
|
Digicash failed because it was proprietary. For net money to
|
|||
|
|
be a success we need a standard for transferring promises to
|
|||
|
|
pay that is separate from the software issuers, and thus
|
|||
|
|
separate from the issuers of promises to pay or deliver. It
|
|||
|
|
has to be a standard such that anybody can play, anyone can
|
|||
|
|
write software that will interoperate with software written
|
|||
|
|
by others, and anyone can issue promises to deliver anything,
|
|||
|
|
so that Ann, Bob, and Carol can transfer and exchange
|
|||
|
|
promises between each other subject only to the need to trust
|
|||
|
|
each other, without needing permissions or licenses from
|
|||
|
|
anyone else. </p><p>
|
|||
|
|
|
|||
|
|
And it has to have software that is competitive with existing
|
|||
|
|
methods of transferring value. </p><p>
|
|||
|
|
|
|||
|
|
Credit cards are very competitive for transactions of modest
|
|||
|
|
size, because of the additional services, in particular
|
|||
|
|
dispute arbitration and resolution provided by the card
|
|||
|
|
issuers, and because of their large installed base. Smaller
|
|||
|
|
players cannot hope to compete in that area. </p><p>
|
|||
|
|
|
|||
|
|
We have however no adequate means for small payments, five
|
|||
|
|
dollars to fractions of a cent. This offers a fertile
|
|||
|
|
opportunity for the development of net money. </p><p>
|
|||
|
|
|
|||
|
|
We also have no entirely satisfactory means for large low
|
|||
|
|
margin payments. </p><p>
|
|||
|
|
|
|||
|
|
The large payment problem could be addressed by some system
|
|||
|
|
that provided a tight connection between internet money and
|
|||
|
|
US dollars in US banks, or, better, a system that provided a
|
|||
|
|
tight connection between internet money and US dollars in non
|
|||
|
|
US banks, or, if we had a large and liquid micropayment
|
|||
|
|
system, it could be provided by a tight connection between
|
|||
|
|
micro and macropayments. </p><p>
|
|||
|
|
|
|||
|
|
If several banks in some moderately popular banking haven
|
|||
|
|
allowed people to transfer funds instantly and cheaply from
|
|||
|
|
one account to another within the haven, through digitally
|
|||
|
|
signed messages passing through https protocol, this would
|
|||
|
|
make it possible to readily solve the large payment problem
|
|||
|
|
by offering the means to create a tight connection between
|
|||
|
|
net dollars and offshore dollars. If this were done then the
|
|||
|
|
revolution would ensue within a few years. So far none have
|
|||
|
|
been willing to do this, perhaps out of fear of reprisals,
|
|||
|
|
more likely out of sheer inertia. </p><p>
|
|||
|
|
|
|||
|
|
The offshore dollar system is probably larger and more
|
|||
|
|
liquid, and is certainly considerably more free, than the
|
|||
|
|
onshore dollar system, but it is inconvenient for modest
|
|||
|
|
payments. People use it primarily for transfers of many
|
|||
|
|
thousands of dollars. Also the connection between the
|
|||
|
|
offshore dollar and the onshore dollar is weak, because it is
|
|||
|
|
inconvenient, slow, and costly, to transfer dollars between
|
|||
|
|
the offshore and onshore banking systems. </p><p>
|
|||
|
|
|
|||
|
|
I see no possibility that anyone will be permitted to create
|
|||
|
|
a strong connection between an internet dollar and the
|
|||
|
|
onshore dollar, whereas it is quite possible that someone
|
|||
|
|
will get away with creating a strong connection between the
|
|||
|
|
internet dollar and the offshore dollar. </p><p>
|
|||
|
|
|
|||
|
|
Alternatively, (and perhaps more likely) a satisfactory
|
|||
|
|
solution to the micropayment problem automatically brings in
|
|||
|
|
its train a solution to the large payment problem, since the
|
|||
|
|
software must accumulate many small promises into a few large
|
|||
|
|
promises, and provide means to transfer these large promises
|
|||
|
|
through numerous intermediaries, thus a large volume of
|
|||
|
|
micropayments will create the liquidity for macropayments.
|
|||
|
|
We do not need the banks to win this one, though they would
|
|||
|
|
be very handy. </p><p>
|
|||
|
|
|
|||
|
|
Large promises to pay could acquire value not through a fast
|
|||
|
|
and cheap connection to the banking system, whether onshore
|
|||
|
|
of offshore, but through a fast and cheap connection to the
|
|||
|
|
micropayment system, resulting in an internet dollar that
|
|||
|
|
derives its liquidity from the internet market, and is
|
|||
|
|
coupled to the US dollar no more strongly, and no less
|
|||
|
|
strongly, than the offshore dollar is coupled to the onshore
|
|||
|
|
dollar. </p><p>
|
|||
|
|
|
|||
|
|
Of course for this to work, we will need a large and liquid
|
|||
|
|
market for aggregated micropayments. The existing finance
|
|||
|
|
systems for self publishing, dirty pictures, and gambling,
|
|||
|
|
really do not work very well, so there seems an obvious and
|
|||
|
|
large market for micropayments. </p><p>
|
|||
|
|
|
|||
|
|
One cent, or half a cent, is probably the sweet spot for
|
|||
|
|
pages and dirty picture, with quarters being the sweet spot
|
|||
|
|
for games and gambling. </p><p>
|
|||
|
|
|
|||
|
|
Obviously pay pages cannot and should not be searched by
|
|||
|
|
search engines, so the typical design would be a free,
|
|||
|
|
searchable, index page containing lead in paragraphs and pay
|
|||
|
|
links to the non free pages on the site, or a collection of
|
|||
|
|
free summary pages each containing a pay link to the
|
|||
|
|
corresponding non free page, or (better) both a free index
|
|||
|
|
page and also a collection of free summary pages. </p><p>
|
|||
|
|
|
|||
|
|
We want the payment system to introduce no additional delays
|
|||
|
|
when we click on a link, so the index page should cause any
|
|||
|
|
necessary negotiations between the browser and server so that
|
|||
|
|
the server is ready to accept the coins of this particular
|
|||
|
|
user, so that the user can get the pay page with a single
|
|||
|
|
message, a single URL containing a coin. The server then
|
|||
|
|
immediately starts downloading the page without waiting for
|
|||
|
|
any further messages to complete, and simultaneously attempts
|
|||
|
|
to deposit the coin. </p><p>
|
|||
|
|
|
|||
|
|
Suppose you are browsing dirty pictures, and both you and the
|
|||
|
|
server are clients of the same token issuer. Then the token
|
|||
|
|
issuer knows that you are browsing the dirty picture pages,
|
|||
|
|
and knows how much money the dirty picture issuer is making.
|
|||
|
|
</p><p>
|
|||
|
|
|
|||
|
|
But for the scheme to be successful, we need many token
|
|||
|
|
issuers, and the means to transfer aggregated token values
|
|||
|
|
between issuers, so that in general the entity that takes
|
|||
|
|
your bank money and provides you with net money, and the
|
|||
|
|
entity that takes the dirty pictures servers net money and
|
|||
|
|
provides it with bank money, will be very different entities,
|
|||
|
|
probably in very different jurisdictions, separated by a
|
|||
|
|
chain of intermediaries, who have an economic incentive to
|
|||
|
|
aggregate transactions, thus obscuring individual spending
|
|||
|
|
and getting. </p><p>
|
|||
|
|
|
|||
|
|
If any creditworthy person can issue tokens, privacy is not
|
|||
|
|
such a big problem, and if the aggregated values representing
|
|||
|
|
large numbers of tokens are readily transferable in a large
|
|||
|
|
liquid market intermediary market, it is not a problem at
|
|||
|
|
all, since the dirty picture issuer and the guy looking at
|
|||
|
|
the dirty pictures are likely to be anonymous to the token
|
|||
|
|
issuer. </p><p>
|
|||
|
|
|
|||
|
|
Micropayments have not failed. They have not yet been tried.
|
|||
|
|
We still have not seen a scheme attempted that had all the
|
|||
|
|
requirements that real net money will need. It is simply
|
|||
|
|
quite a bit of work to design these things, and to get them
|
|||
|
|
deployed in a form that ordinary mortals can use. </p>
|
|||
|
|
<p style="background-color : #ccffcc; font-size:80%">These documents are
|
|||
|
|
licensed under the <a rel="license" href="http://creativecommons.org/licenses/by-sa/3.0/">Creative
|
|||
|
|
Commons Attribution-Share Alike 3.0 License</a></p>
|
|||
|
|
|
|||
|
|
</body></html>
|