Loosening Visa/MC/AmEx's grip on e-commerce is a Good Thing, and this might represent a way to yet again improve the flow of services (more likely than goods, since shipping costs remain).
But, anyway, here's the article:
The early days of Internet commerce offered many promises, none of them brighter than the chance for people to set up Web sites and sell inexpensive digital goods like songs, articles and photos.
But most of the pioneering companies that devised transaction systems for low-cost online purchases faded away, dogged not only by the giveaway ethos of the Internet but also by cumbersome technology and fees that ate up the profit on items that often sold for less than a dollar.
Times have changed, though, and electronic micropayment systems may yet be born again. In the past few months, several new companies dedicated to processing small cash transactions on the Web have introduced commercial services, and some older companies, including one inspired by Apple's huge success in selling 99-cent songs at its online music service, have modified their offerings to accommodate some lower-priced sales.
This time around, innovative technology may make the difference for the micropayments market. For example, two highly regarded scientists at the Massachusetts Institute of Technology have founded a company that they say has the technical expertise to let people sell digital content profitably on the Web for prices as low as pennies.
Ronald L. Rivest, the R in the public key encryption system RSA, which he helped invent, and Silvio Micali, whose honors include the 1993 Godel Prize in theoretical computer science, founded Peppercoin (www.peppercoin.com) and introduced it commercially in December. Peppercoin hopes to reduce online merchants' transaction costs substantially, particularly the number of credit card charges they pay. These are typically about 25 cents per sale, said Robert W. Carney, vice president for marketing at Peppercoin.
The company's software uses advanced encryption and mathematical models to avoid charging a seller a fee each time an item is sold. Instead, the system statistically selects a representative sample of the transactions for billing.
For example, the software might randomly select one sale of a $1 song from among 20. It multiplies this one sale by 20 to represent the other 19 sales, and passes along $20 to the seller. But by lumping the sales together, only one transaction fee, not 20, is charged.
"Would you prefer to be paid $1 minus a 25 cent transaction fee each time you make a sale," Dr. Micali asked, "or zero dollars 19 times and $20 minus a 25-cent transaction fee once?"
Algorithms that were developed and refined over the past 20 years are used for the process, Dr. Rivest said. With a large volume of transactions, the errors that derive from the sampling are negligible.
One of the companies Peppercoin has signed up is Smithsonian Folkways Recordings of Washington, which is about to begin offering individual tracks from 33,000 folk recordings for sale electronically. Richard Burgess, director of marketing, said that the organization was comfortable with Peppercoin's complex algorithms. "Probability cuts down on the number of transaction fees," he said, but "there's no probability attached to the purchases - we know who bought what."
Thomas Frey, executive director of the DaVinci Institute, a research organization in Louisville, Colo., recently sponsored a seminar on micropayment systems. While such systems failed in the past, he said, their future now seems brighter. "Having people like Ron Rivest solving problems opens the door for interesting things to happen," he said.
Dr. Frey predicts that one day people might buy low-cost items ranging from ring tones for their cellphones to weapons upgrades for their video games. "They could even buy cool sunglasses and new hairdos for their avatars," he said.
Well, because there are some legitimate reasons to tap communications of any sort (as in, got a judge to OK it), I figure that it was bound to happen at some point. Though it still creeps me out and makes me eagerly anticipate a nice encrypted VoIP client...
Per Thomas Kuhn's theory on the structure of scientific revolutions, real changes in the way we understand science always start out as a crackpot theory. see the Reciprocal Systems website for more. My Uncle is an adherent of this theory, and he has some uncanny evidence for why it is applicable to real physics, large and small.
While conventional thinking won't get you put in a nuthouse, nor will it solve the dilemmas of physics. Even physicists say this.
Perhaps rather than unless things change fast we're going to be up to our necks in corpses. You with us or what?...
It might mean we're considering force; please pass this along quietly to those currently embargoing the US so we can resolve this without force, and everyone can avoid bloodshed. Sort of a private threat passed along by different channels so there's no public threat to carry out or back down from.
Recall that the US during this time was willing to tip our intelligence hand to calm a situation down; nobody knew just how good the SR-71 cameras were (1-meter resolution, IIRC) until the military took pictures of Israeli and Egyptian positions and shared them with everybody to create/maintain the cease-fire. The exact ability of spy cameras was a costly thing to tell the Soviets. I think this proposed seizure of oil wells could have been similarly leaked to carry the message. Nixon had enough trouble at home (Watergate, Vietnam) without going looking for another fight, but he also had little to lose since his fate was in doubt as President.
There have been some rumors about Apple doing much the same thing with the iPods, allowing users to bring a home directory along and log into a given Mac from their own home directory. Very neat. And I think it represents a bridge between the two uberdevice needs we face: first, convergence of the belt-clip devices, and second, convergence of the home computing and media devices.
As noted below, the Treo 600 is the closest thing I've seen to an all-in-one device that I would use, though I wouldn't read ebooks or tech refs on that screen. I'd prefer a larger device with bluetooth headset instead of requiring actual 'phone' form factor.
As for home, I think there's still a difference in the mind of the consumer; I'd look to students for evidence of true convergence; they have the tightest space constraints, and are more likely to pursue a TV-tuner/LCD monitor/media PC option.
Slashdot Mirror
Loosening Visa/MC/AmEx's grip on e-commerce is a Good Thing, and this might represent a way to yet again improve the flow of services (more likely than goods, since shipping costs remain).
But, anyway, here's the article:
The early days of Internet commerce offered many promises, none of them brighter than the chance for people to set up Web sites and sell inexpensive digital goods like songs, articles and photos.
But most of the pioneering companies that devised transaction systems for low-cost online purchases faded away, dogged not only by the giveaway ethos of the Internet but also by cumbersome technology and fees that ate up the profit on items that often sold for less than a dollar.
Times have changed, though, and electronic micropayment systems may yet be born again. In the past few months, several new companies dedicated to processing small cash transactions on the Web have introduced commercial services, and some older companies, including one inspired by Apple's huge success in selling 99-cent songs at its online music service, have modified their offerings to accommodate some lower-priced sales.
This time around, innovative technology may make the difference for the micropayments market. For example, two highly regarded scientists at the Massachusetts Institute of Technology have founded a company that they say has the technical expertise to let people sell digital content profitably on the Web for prices as low as pennies.
Ronald L. Rivest, the R in the public key encryption system RSA, which he helped invent, and Silvio Micali, whose honors include the 1993 Godel Prize in theoretical computer science, founded Peppercoin (www.peppercoin.com) and introduced it commercially in December. Peppercoin hopes to reduce online merchants' transaction costs substantially, particularly the number of credit card charges they pay. These are typically about 25 cents per sale, said Robert W. Carney, vice president for marketing at Peppercoin.
The company's software uses advanced encryption and mathematical models to avoid charging a seller a fee each time an item is sold. Instead, the system statistically selects a representative sample of the transactions for billing.
For example, the software might randomly select one sale of a $1 song from among 20. It multiplies this one sale by 20 to represent the other 19 sales, and passes along $20 to the seller. But by lumping the sales together, only one transaction fee, not 20, is charged.
"Would you prefer to be paid $1 minus a 25 cent transaction fee each time you make a sale," Dr. Micali asked, "or zero dollars 19 times and $20 minus a 25-cent transaction fee once?"
Algorithms that were developed and refined over the past 20 years are used for the process, Dr. Rivest said. With a large volume of transactions, the errors that derive from the sampling are negligible.
One of the companies Peppercoin has signed up is Smithsonian Folkways Recordings of Washington, which is about to begin offering individual tracks from 33,000 folk recordings for sale electronically. Richard Burgess, director of marketing, said that the organization was comfortable with Peppercoin's complex algorithms. "Probability cuts down on the number of transaction fees," he said, but "there's no probability attached to the purchases - we know who bought what."
Thomas Frey, executive director of the DaVinci Institute, a research organization in Louisville, Colo., recently sponsored a seminar on micropayment systems. While such systems failed in the past, he said, their future now seems brighter. "Having people like Ron Rivest solving problems opens the door for interesting things to happen," he said.
Dr. Frey predicts that one day people might buy low-cost items ranging from ring tones for their cellphones to weapons upgrades for their video games. "They could even buy cool sunglasses and new hairdos for their avatars," he said.
BitPass, another new micropayment company, st
Well, because there are some legitimate reasons to tap communications of any sort (as in, got a judge to OK it), I figure that it was bound to happen at some point. Though it still creeps me out and makes me eagerly anticipate a nice encrypted VoIP client...
Per Thomas Kuhn's theory on the structure of scientific revolutions, real changes in the way we understand science always start out as a crackpot theory. see the Reciprocal Systems website for more. My Uncle is an adherent of this theory, and he has some uncanny evidence for why it is applicable to real physics, large and small.
While conventional thinking won't get you put in a nuthouse, nor will it solve the dilemmas of physics. Even physicists say this.
Perhaps rather than unless things change fast we're going to be up to our necks in corpses. You with us or what?...
It might mean we're considering force; please pass this along quietly to those currently embargoing the US so we can resolve this without force, and everyone can avoid bloodshed. Sort of a private threat passed along by different channels so there's no public threat to carry out or back down from.
Recall that the US during this time was willing to tip our intelligence hand to calm a situation down; nobody knew just how good the SR-71 cameras were (1-meter resolution, IIRC) until the military took pictures of Israeli and Egyptian positions and shared them with everybody to create/maintain the cease-fire. The exact ability of spy cameras was a costly thing to tell the Soviets. I think this proposed seizure of oil wells could have been similarly leaked to carry the message. Nixon had enough trouble at home (Watergate, Vietnam) without going looking for another fight, but he also had little to lose since his fate was in doubt as President.
There have been some rumors about Apple doing much the same thing with the iPods, allowing users to bring a home directory along and log into a given Mac from their own home directory. Very neat. And I think it represents a bridge between the two uberdevice needs we face: first, convergence of the belt-clip devices, and second, convergence of the home computing and media devices.
As noted below, the Treo 600 is the closest thing I've seen to an all-in-one device that I would use, though I wouldn't read ebooks or tech refs on that screen. I'd prefer a larger device with bluetooth headset instead of requiring actual 'phone' form factor. As for home, I think there's still a difference in the mind of the consumer; I'd look to students for evidence of true convergence; they have the tightest space constraints, and are more likely to pursue a TV-tuner/LCD monitor/media PC option.