Here in Vietnam you don't get free water in restaurants. You would not *believe* how irate this makes Americans. There's even an American comfort food restaurant here, Eddie's Diner, who make a big marketing point out of how everyone gets a free glass of water.
I guess that's just my roundabout way of agreeing with your point.
Micropayments are awesome for people above the threshold of caring about a small payment. If you are a blockchain software engineer, this world makes sense, as you make 500K and fifty cents to use the bathroom isn't going to rise above your "give a shit" threshold. In fact, you welcome it, explicitly because it excludes freeloaders from shared services.
Highways in CA have microtransactions to use the fast lane today - no blockchain needed. Most of this could be done with merely efficient transaction processing, which ironically, blockchains are very bad at.
I want to shout to the heavens: The Blockchain is just a database. We already have databases! It's no more portable than any other database. If you're Noahpinion on Twitter, well, it's already the case that other service providers can utilize your authenticated twitter login and connect your accounts. Now, another social network might not use that login and instead another system (say Google's) - they could let anyone take the name Noahpinion. This is the status quo and will exist on the blockchain just as well because there's no limit to the number of blockchains, just like there is no limit to the number of databases or social networks.
It's just a secure, verifiable database. As to which one you trust, that's like asking if you trust Google or Apple or Facebook: Opinions will vary, you'll ultimately not trust any of them, and it'll be just like today.
I agree with your point in general. Drilling down though, I wonder how many of your specific points resonate because they're what a Georgist would call "land". We should sit down and drink water freely because we have a natural right to the land on which we live.
Noah, I’m not sure whether it’s a good thing or a bad thing, but I feel like I can just outsource my opinions on everything to you. Or at least economics.
One of the problems with blockchain is there have note been, "Stuff that blockchains can do more naturally and easily than normal protocols," yet.
More than a decade on, and we've yet to see any quirky applications from the community. There is a good chance that this is just a solution that will never find its problem.
This is the second time I see Noah doing good Coasean thinking and I love it.
I thought about this exact problem, but in terms of roads. The way we presently pay for roads is by tying a substantial share of it to gasoline consumption. This is a pretty decent way to assign excludability to roads, but it's highly imperfect. It doesn't price congestion, route optimization, time of day, out-of-state travel, and other things we might be interested in factoring in. But we're finally getting to a point where charging for road use is actually becoming somewhat technologically feasible, at least in theory. We could theoretically have cars hooked up to GPS systems where algorithms aggregate all the data, and spit out rates Uber-style.
To your point, people hate the transaction costs associated with this stuff, but I was thinking we actually do deal with this transaction cost everytime we go to the gas stations and fill up. We then use the fuel gauge in our cars as a reference point against which we make economic decisions, and it doesn't seem to present much of a cognitive load on us. So why should a little road tax gauge that sits in your car dash be different? And in the same vein, what about a Web3 browsing "tax"? What if the funding model for browsing the internet was, say $40 as your monthly broadband fee, where $10 of which is goes toward your "Web3 fuel gauge" for your exclusive Web3 content consumption. Or you'd have ad-based or cash-back "frequent flyer" style business models pop up where your "fuel gauge" gets topped up whenever you make purchases or watch ads. That browser plug-in Honey, that finds and applies coupons to your online purchases, could be retooled to reward users with Web3 cash. I feel like there are quite a lot of possible solutions to your Web3 transaction cost problem.
Microtransactions don't necessarily mean having to authorise and make a decision for every transaction. Entirely possible and most likely IMO that the experience will be more like filling your car with gas every so often. You just authorise a platform to deduct a certain amount per action and rely on periodic notifications to tell you how much you're spending.
To a certain extent, web3 is already here (and you are part of it): Lots of stuff on the web has teasers out for free and "extended content" or whatever behind a paywall. Everybody screams "Join my Patreon" or some sort of monthly payment. I keep thinking of signing up to a couple of them that I'm fans of, but can I really get US$10 a month worth of stuff from a site I may not check out for months at a time (juggling) or that already has way more stuff for free than I can consume (Go). And if I did five or six sites (you, Brad, Taylor Tries, Adam Neely, Go), it'd start adding up.
Since playing this game is so common, and seems to be still going, I guess it's here to stay...
I disagree that there are inevitable psychic costs that accumulate with each microtransaction you meet.
I too once went to Japan on a shoe-string budget, agonizing over whether to purchase various amenities that cost under $10, but my distress was entirely caused by the strict budget constraints I faced at the time, not by the fact that there were so many opportunities to spend money. I was young and hadn't built up any savings. Now that I'm not so young and have looser budget constraints, tapping the magic brick and receiving amenities doesn't tend to cause me any distress (recent vacation to South Beach, Miami not withstanding).
Surely most of these psychic costs are a matter of conditioning. We live in a world where most of the information we process comes to us in written form and most people are highly literate. For us, reading things is as natural as breathing. It wasn't always like this though. The literate used to be a minority. I could easily see someone from the past claiming that conveying more information in writing is going to inflict psychic costs on the semi-literate every time they have to try to read something. They'd be right! But over time, we've been conditioned such that psychic costs of reading just aren't a thing for most people anymore.
Video games provide the best evidence that psychic costs of transactions don't have to be a thing. There are entire genres of games where the whole point is to engage in a huge series of transactions, considering trade-offs, and staying within a budget. People do this stuff for fun! We could probably take some lessons from video games to ease the transition to a world where real life microtransactions are more prevalent. The whole trend of gamification is an example of smart people working on this problem.
If microtransactions are exacting a psychic toll on you, what would you say if instead of just unlocking the door, that paid toilet also flashed some pretty lights, played a triumphant sound, and sprayed perfumed mist into the air when you tap your credit card?
I wrote the above Medium years ago responding to the stale arguments against Micropayments, and will likely write a new update to respond to some of your fresh arguments against micropayments.
Really all anyone has to do is go back to the reasoning behind royalties in project Xanadu. Ted’s parents were both screenwriters and knew how easy it was to steal words and not pay the creatives behind them. Web 2.0 is either (1) keep stealing those words and/or (2) mostly steal the words, but encourage people to write things that will maximally annoy the out group and righteously outrage the in group… then pay them a fraction of what they would have made otherwise.
That’s is the dystopia. Micropayments are a way out.
We already live in a world of ubiquitous micropayments. You just pay with your data. Data that Facebook undoubtedly shares with the CIA, FBI, NSA, you name it.
Here in Vietnam you don't get free water in restaurants. You would not *believe* how irate this makes Americans. There's even an American comfort food restaurant here, Eddie's Diner, who make a big marketing point out of how everyone gets a free glass of water.
I guess that's just my roundabout way of agreeing with your point.
Micropayments are awesome for people above the threshold of caring about a small payment. If you are a blockchain software engineer, this world makes sense, as you make 500K and fifty cents to use the bathroom isn't going to rise above your "give a shit" threshold. In fact, you welcome it, explicitly because it excludes freeloaders from shared services.
Highways in CA have microtransactions to use the fast lane today - no blockchain needed. Most of this could be done with merely efficient transaction processing, which ironically, blockchains are very bad at.
The transaction cost must also be kept at a minimum. No Bitcoinish calculations requiring a personal nuclear reactor and a farm of GPUs.
I want to shout to the heavens: The Blockchain is just a database. We already have databases! It's no more portable than any other database. If you're Noahpinion on Twitter, well, it's already the case that other service providers can utilize your authenticated twitter login and connect your accounts. Now, another social network might not use that login and instead another system (say Google's) - they could let anyone take the name Noahpinion. This is the status quo and will exist on the blockchain just as well because there's no limit to the number of blockchains, just like there is no limit to the number of databases or social networks.
It's just a secure, verifiable database. As to which one you trust, that's like asking if you trust Google or Apple or Facebook: Opinions will vary, you'll ultimately not trust any of them, and it'll be just like today.
I agree with your point in general. Drilling down though, I wonder how many of your specific points resonate because they're what a Georgist would call "land". We should sit down and drink water freely because we have a natural right to the land on which we live.
Noah, I’m not sure whether it’s a good thing or a bad thing, but I feel like I can just outsource my opinions on everything to you. Or at least economics.
Great article! Continue to help us neophytes to stay informed.
One of the problems with blockchain is there have note been, "Stuff that blockchains can do more naturally and easily than normal protocols," yet.
More than a decade on, and we've yet to see any quirky applications from the community. There is a good chance that this is just a solution that will never find its problem.
Imagine if you had to spend a $.000001 SMTP token every time you sent an email.
Or some random group of people who own all the SMTP tokens got to choose how email worked.
That's the web3 vision.
This is the second time I see Noah doing good Coasean thinking and I love it.
I thought about this exact problem, but in terms of roads. The way we presently pay for roads is by tying a substantial share of it to gasoline consumption. This is a pretty decent way to assign excludability to roads, but it's highly imperfect. It doesn't price congestion, route optimization, time of day, out-of-state travel, and other things we might be interested in factoring in. But we're finally getting to a point where charging for road use is actually becoming somewhat technologically feasible, at least in theory. We could theoretically have cars hooked up to GPS systems where algorithms aggregate all the data, and spit out rates Uber-style.
To your point, people hate the transaction costs associated with this stuff, but I was thinking we actually do deal with this transaction cost everytime we go to the gas stations and fill up. We then use the fuel gauge in our cars as a reference point against which we make economic decisions, and it doesn't seem to present much of a cognitive load on us. So why should a little road tax gauge that sits in your car dash be different? And in the same vein, what about a Web3 browsing "tax"? What if the funding model for browsing the internet was, say $40 as your monthly broadband fee, where $10 of which is goes toward your "Web3 fuel gauge" for your exclusive Web3 content consumption. Or you'd have ad-based or cash-back "frequent flyer" style business models pop up where your "fuel gauge" gets topped up whenever you make purchases or watch ads. That browser plug-in Honey, that finds and applies coupons to your online purchases, could be retooled to reward users with Web3 cash. I feel like there are quite a lot of possible solutions to your Web3 transaction cost problem.
Microtransactions don't necessarily mean having to authorise and make a decision for every transaction. Entirely possible and most likely IMO that the experience will be more like filling your car with gas every so often. You just authorise a platform to deduct a certain amount per action and rely on periodic notifications to tell you how much you're spending.
To a certain extent, web3 is already here (and you are part of it): Lots of stuff on the web has teasers out for free and "extended content" or whatever behind a paywall. Everybody screams "Join my Patreon" or some sort of monthly payment. I keep thinking of signing up to a couple of them that I'm fans of, but can I really get US$10 a month worth of stuff from a site I may not check out for months at a time (juggling) or that already has way more stuff for free than I can consume (Go). And if I did five or six sites (you, Brad, Taylor Tries, Adam Neely, Go), it'd start adding up.
Since playing this game is so common, and seems to be still going, I guess it's here to stay...
I disagree that there are inevitable psychic costs that accumulate with each microtransaction you meet.
I too once went to Japan on a shoe-string budget, agonizing over whether to purchase various amenities that cost under $10, but my distress was entirely caused by the strict budget constraints I faced at the time, not by the fact that there were so many opportunities to spend money. I was young and hadn't built up any savings. Now that I'm not so young and have looser budget constraints, tapping the magic brick and receiving amenities doesn't tend to cause me any distress (recent vacation to South Beach, Miami not withstanding).
Surely most of these psychic costs are a matter of conditioning. We live in a world where most of the information we process comes to us in written form and most people are highly literate. For us, reading things is as natural as breathing. It wasn't always like this though. The literate used to be a minority. I could easily see someone from the past claiming that conveying more information in writing is going to inflict psychic costs on the semi-literate every time they have to try to read something. They'd be right! But over time, we've been conditioned such that psychic costs of reading just aren't a thing for most people anymore.
Video games provide the best evidence that psychic costs of transactions don't have to be a thing. There are entire genres of games where the whole point is to engage in a huge series of transactions, considering trade-offs, and staying within a budget. People do this stuff for fun! We could probably take some lessons from video games to ease the transition to a world where real life microtransactions are more prevalent. The whole trend of gamification is an example of smart people working on this problem.
If microtransactions are exacting a psychic toll on you, what would you say if instead of just unlocking the door, that paid toilet also flashed some pretty lights, played a triumphant sound, and sprayed perfumed mist into the air when you tap your credit card?
Micropayments are awesome and will change business incentives to make things affordably entertaining instead of addictively engaging. There will be new economies for creatives. https://craigtalbert.medium.com/responses-to-common-criticisms-of-micropayments-544cd2cedf19
I wrote the above Medium years ago responding to the stale arguments against Micropayments, and will likely write a new update to respond to some of your fresh arguments against micropayments.
Really all anyone has to do is go back to the reasoning behind royalties in project Xanadu. Ted’s parents were both screenwriters and knew how easy it was to steal words and not pay the creatives behind them. Web 2.0 is either (1) keep stealing those words and/or (2) mostly steal the words, but encourage people to write things that will maximally annoy the out group and righteously outrage the in group… then pay them a fraction of what they would have made otherwise.
That’s is the dystopia. Micropayments are a way out.
We already live in a world of ubiquitous micropayments. You just pay with your data. Data that Facebook undoubtedly shares with the CIA, FBI, NSA, you name it.
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