Older blog entries for dinsdale (starting at number 0)

5 Mar 2001 (updated 5 Mar 2001 at 19:35 UTC) »

reply#1 to the "Money Flow" thread: (i sent this to netdancer and mattbradshaw on 3/5/2001 with a bit in italics that i added just now because i realized it wasn't actually a sentence 8^\

hey there

i tripped over the advogato thread you started about money flow, scanning my referrer logs.

a curious coincidence that you posted your article the same day i put up the first draft of a proposed "potlatch protocol" on my site at potlatch.net, designed to provide an open-source decentralized micropayment system. It's phrased in terms of voluntary payments, but in fact the mechanism itself doesn't care if the payments are voluntary or not. I'm simply assuming that, long term, creators will be relying on that portion of their fans/users who actually *want* to support them, as anyone who doesn't want to will be able to get what they want from any number of sources.

The street performer protocol makes a good point, which is that the "audience" needs to be given an incentive to pay, and that the promise of future works provides this incentive. However, there are several problems with this. First, it doesn't help the unknown or unestablished artists, they need to establish a 'track record' of quality work before anyone would dream of giving them money for something they've never seen/heard. Second, it doesn't help the established artists to be properly compensated for work that they have released which is *already* being traded around the various networks. Third, it assumes that an artist knows *ahead of time* how popular something is going to be, and therefore how much to "charge" for it. And finally it assumes that this *predetermined amount* will in most cases be more than the total amount, long term, that an artist will earn by simply releasing all work when it's finished, and soliciting payments on the basis of an *informal* contract that "if you pay us, we'll keep making more of this stuff." (That is, the street performer protocol puts a cap on what a creator may earn.)

Basically, I'm suggesting that you can't force people to pay, and the more you try the more you make it a fun game for them to cheat you. If we put one-tenth of the effort into simply making it easy for people to contribute, actually let the users and fans become partners in the creative process as *supporters*, and dream up ways to encourage this process (eg. advance or discount concert tickets, etc.) - maybe we can come up with an economic system that moves with the tide of technology instead of trying to dam it up.

I'm arguing that a voluntary payment system is not something that needs to be "relied upon" for an artists sole means of support, but that it is an appropriate and necessary mechanism *among others* for artists to get paid. Certainly no-one will partipate if it's too hard/onerous to do so - it has to be easy and fun. And there's nothing in it that says people shouldn't sell CDs , t-shirts and whatever else people want to buy from them.

I'd post this to Advogato, but i guess i need to be "certified" in some way - this in itself is very interesting to me, as it's pretty obvious that my draft protocol depends upon some type of reputation metrics, which advogato appears to be pioneering.

It's a pretty important subject - right now i'm involved with the developers of Espra, a music-sharing client for Freenet (http://espra.net) - they are committed to incorporating voluntary payments into their app. Someone made the point in the 'MoneyFlow' thread that a patent-free open source micropayment system is essential for a functional and efficient digital economy *without middlemen*. The banks and governments have no interest in creating this - otherwise we'd have it already - i'm afraid it's up to us

Jim Carrico http://www.potlatch.net

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reply#2 to the "Money Flow" thread: (i sent this to netdancer and mattbradshaw on 3/5/2001)

"mattbradshaw" wrote: "i believe the system is doomed to failure as a result of the enormous burden it places on the aggregator(s). collecting promised micropayments is so very difficult. especially without a network payment protocol and having to rely on an expensive traditional transaction cost. i'm also not really sure why several different brokers using the same protocol wouldn't be a better form of decentralization. the final nail in the coffin of the protocol is the ease to which is permits attacks on aggregators. the same signed receipt could be sold to several aggregators. it was an interesting read though. and perhaps i've misread the details. "

It all comes down to reputation. - the "burden" on the aggregator is to facillitate a transaction that both parties have an equal interest in. If the payment is voluntary, there is no reason to cheat. What is the advantage of me saying I'm going to give you money if I don't intend to do it. the aggregator takes a risk, but they can define the terms of that risk. For instance if i was running an aggregator i wouldn't accept any of these promissory notes without the stipulation that they would be returnable if the payer didn't actually pay - (eg. the next time i make an aggregate "buy" from that artist - this is the way newstands handle magazine distribution, they buy N magazines, sell M, and return N-M (with the covers removed) to the distributor for credit the next month)

As for a "network payment protocol", this idea can be seen as an effort to bootstrap just such a system. the point is, without banks or governments, with what do we back our payments? I'm suggesting that we develop a currency based on reputation. It has to be decentralized, otherwise we're back where we started, a centrally controlled hierarchy beholden to no-one but a few inside interests - not sure what you mean by "several brokers using the same protocol" or what your point is there.

as to selling the same reciept to several aggregators, yes this would be easy. But it would also be very easy to catch. The artists are after all quite visible in this scenario, and duplication of certificates is plain ordinary fraud, and would be treated accordingly. If you write me a check and I photocopy it and deposit it into two bank accounts, you're going to notice - and there's a trail that leads straight to me. the questions to ask are, 1. can someone cheat without getting caught?, and 2. is it worth the effort?

anyway, thanks for thinking about this stuff. my proposal is only a proposal, and an early draft at that -

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