I believe that micropayments will revolutionize business transactions, and that they are entirely feasible, and have written on the subject on cpunks intermittently. NS starts out with some opposite assumptions, which I don't really think are entirely plausible.
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.
dunno what you are talking about here. with micropayments, why would you necessarily have statements? you're using an old billing model on a new paradigm. please establish a *context*. it would be ridiculous if people submitted "microbills" to companies that responded with "micropayments". that's the wrong model. here's how people are talking about micropayments. imagine that you see a link with a little 5c sign next to it. that means when you click on it, you are automatically debited 5c. your own browser can handle keeping your own records. the transaction occurs when you hit the button. the idea of a bill being submitted, that you seem to be suggesting with your idea, doesn't make sense. another example: downloading an FTP file. the whole idea of billing is thrown away in favor of immediate processing. 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.
again, this doesn't make sense at all to me. "statements, bills, summaries"-- these are all things you require for larger size transactions. if after a day of net surfing I have spent $3.16, and my browser kept a record of every case where I paid it out, what's the problem? the browser does not pay unless I click somewhere. nobody submits bills to my browser. all actions are initiated by me.
There seems to lie here a fundamental cognitive bottleneck, creating a limit to the granularity of billable transaction size whether electronic or physical.
"fundamental cognnitive bottleneck"?? not in my brain. perhaps you should check your own equipment <g> One proposed solution to this has been "intelligent
agents". But since these agents are programmed remotely, not by the consumer, it is difficult for the consumer to determine whether the agent is acting the consumers' best interests, or in the best interests of the counterparty -- perhaps, necessarily, at least as difficult as reading the corresponding full statement of charges.
it doesn't make sense at all for one to give autonomous capability to agents to spend money, at least until they have been refined. I don't see where agents fit into this all in the beginning. you're putting the cart before the horse. I've never seen micropayments discussed in the context you are putting them in. (no wonder it is causing you "cognitive dissonance"). the uses you cite may not appear until long into the future. in the meantime the model I wrote about above has no problems you cite that I can tell. By
sleight of hand we may have merely transformed the language of the transaction as it needs to be understood by the party, without reducing the complexity to be understood. Furthermore, the user interface to enable consumers to simply express their sophisticated preferences to an agent is lacking, and may represent another fundamental cognitive bottleneck.
you are tackling a different problem. "how can we get reliable agents that can be trusted with buying decisions". this has nothing or little to do with "the feasibility of micropayments". micropayments are not necessarily tied to agents.
Telephone companies have found billing to be a major bottleneck. By some estimates, up to 50% of the costs of a long distance call are for billing, and this is on the order of a $100 billion per year market worldwide. Internet providers have been moving to a flat fee in order to minimize these costs, even though this creates the incentive for network resource overusage.
imagine a user who controls his own wallet. he knows when he is paying from that wallet. you seem to have this idea that outsiders could make queries to that wallet that would be hard for the consumer to keep track of. this makes no sense to me. the wallet action will always be tied with some other action. the user picks up the phone to dial somewhere, and it says, "that will be .3c-- will you pay"? he says yes.
A micropayments system assumes a solution to the billing problem.
as I wrote, I don't imagine a billing system at all in terms of micropayments. its the wrong model. in a billing system, the bill and the action are not tied tightly together. person does [x] and receives bill 3 days later or whatever. with micropayments, you will have instantaneous transactions.
If somebody could actually solve the this problem, rather than merely claiming to have solved it via some mysterious means ("intelligent agents", et. al.), the savings would be enormous even in existing businesses such as long distance and Internet service -- never mind all the new opportunities made possible by micropayments.
wow, I think I've solved it. you can nominate me for some award now <g>