Re: Making Money in Digital Money
Robert Hettinga writes:
So, how do you do this? Easy. For software, the first copy is auctioned for cash. Then the second copy, wherever it is on the network, is auctioned for cash, and so on, until nobody's buying any more copies, across the whole network. This is the oldest model of trade there ever was. It's how red ochre from Maine ended up in Neolithic tombs in Ireland. It's how Homo Habilis traded raw rocks for finished hand axes across hundreds of miles of African savanna. The Agorics guys called it the "digital silk road" for obvious reasons.
I hate to get into this, because I tried to educate you on this last year and you were totally impervious. As usual you started firing invective in all directions in an attempt at misdirection. Let me explain it so simply you can't miss it. This system does not work, because by the time the content is in the hands of just a few people, they will be bidding against each other to sell it on the net. Such a state of competition will quickly drive the prices down to the cost of reproduction, which is effectively zero. Therefore you can't sell more than a dozen-odd copies of the software at a non-zero price. If most of the people buying this software are doing so with the expectation of recouping their costs by re-selling, then no one will buy after the first few, since they will not be able to make any money selling at zero. But this means that even those first few buyers won't be able to sell at non-zero, since these second-wave potential buyers were their customers. Try to follow the logic here, Bob. The inability to make a profit after there are a dozen sellers *implies*, logically, that even the very first seller can't make a profit, because his potential buyers will see that they have no profit opportunities. Therefore the only motivation anyone would have here is to buy the software for what it is worth to them, and not to redistribute it. So we are talking about a private-contracting, custom-built software model. But it's not a software sales model.
For most digital goods, you just need to digitally sign the copies, and you're done. Look Ma, no lawyers. Okay, no legislators and regulators. No intellectual property attorneys. No "is a person", or "know your customer", or other mystifications of identity. Funny thing about this is, you'll notice the people who make the most new stuff the most often get the most money in a single product's value chain. Which is, oddly enough, exactly what we do now -- ask a movie star -- only we'll be doing it cheaper.
This is even more stupid. So someone signs the software. What difference does that make? It doesn't stop redistribution, it doesn't stop piracy, it doesn't keep it from being used in any way. It's irrelevant.
On Thu, 1 May 2003, Anonymous wrote:
Robert Hettinga writes:
So, how do you do this? Easy. For software, the first copy is auctioned for cash. Then the second copy, wherever it is on the network, is auctioned for cash, and so on, until nobody's buying any more copies, across the whole network. This is the oldest model of trade there ever was. It's how red ochre from Maine ended up in Neolithic tombs in Ireland. It's how Homo Habilis traded raw rocks for finished hand axes across hundreds of miles of African savanna. The Agorics guys called it the "digital silk road" for obvious reasons.
I hate to get into this, because I tried to educate you on this last year and you were totally impervious. As usual you started firing invective in all directions in an attempt at misdirection.
Let me explain it so simply you can't miss it. This system does not work, because by the time the content is in the hands of just a few people, they will be bidding against each other to sell it on the net. Such a state of competition will quickly drive the prices down to the cost of reproduction, which is effectively zero. Therefore you can't sell more than a dozen-odd copies of the software at a non-zero price.
If most of the people buying this software are doing so with the expectation of recouping their costs by re-selling, then no one will buy after the first few, since they will not be able to make any money selling at zero. But this means that even those first few buyers won't be able to sell at non-zero, since these second-wave potential buyers were their customers.
Try to follow the logic here, Bob. The inability to make a profit after there are a dozen sellers *implies*, logically, that even the very first seller can't make a profit, because his potential buyers will see that they have no profit opportunities.
Therefore the only motivation anyone would have here is to buy the software for what it is worth to them, and not to redistribute it. So we are talking about a private-contracting, custom-built software model. But it's not a software sales model.
Exactly! It is what the whole point of Open Source software is supposed to be about. Give the technology away and sell the brains on how to use it to solve somebody elses problem who doesn't have the drive/self-confidence/ whatever to do it themselves. One of the great missed opportunity of most Open Source development is to re-sell -specific versions- in a closed source model to individual buyers to fulfill -local- goals. More Open Source licenses should have a clause that states that if you want to use this software in a closed license model please contact the author for special pricing". It continues to amaze me the way many believe that because the software is 'free' the access and utilization of those who know how to apply it should also be free. Ignorance of market dynamics; pure, plain, and simple. -- ____________________________________________________________________ We are all interested in the future for that is where you and I are going to spend the rest of our lives. Criswell, "Plan 9 from Outer Space" ravage@ssz.com jchoate@open-forge.org www.ssz.com www.open-forge.org --------------------------------------------------------------------
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Jim Choate