First, I'm not very convinced that probabalistic payments are needed. And I'm mostly convinced that most users of digital money will be skeptical too. A few comments: At 9:18 PM 7/4/96, Steve Reid wrote:

Suppose someone is surfing the web or whatever, and various sites are charging, say, 0.1 cents per web page, via probabilistic payments. Suppose there is a 1 in 10 chance that the person will pay 1 cent.

The person wanders around the web, acting as though he's perfectly willing to pay, and participating in the fair coin tosses. Except, he really has no intention of paying. He will gain free access to 9 out of 10 sites, and on the ones that he loses the 1/10 gamble, he just backs out of the deal and doesn't pay anything. The end result is that instead of seeing all of the web at 0.1 cents per page, he sees 90% of the web completely for free. If everyone does this, the sites will go broke.

I cannot imagine _any_ protocol for probabalistic payments which "allows" someone to back out of the deal once they've seen the outcome of the coin toss (or whatever). That just makes no sense. Exactly how the deal works to force completion is another matter (maybe escrow, maybe the symmetric payment scheme described here recently, etc.).

The obvious solution would be to require that the person pay the 1 cent, then if he wins the 9/10 bet, he gets the 1 cent back. But that will just move the problem from the user to the server- the site can welsh on the bet and refuse to pay back the one cent. They will get ten times the payment that they are supposed to get.

Reputations matter, too, so sites or customers who renege will have their reps diminished, in the ways we talk about so often here. (Analogies in the physical world today: casinos who fail to pay off winnings, customers of casinos who fail to pay off their markers, etc.) I don't believe probabalistic payments have any special problems with renege rates. However, I also don't think this is a promising area. --Tim May Boycott "Big Brother Inside" software! We got computers, we're tapping phone lines, we know that that ain't allowed. ---------:---------:---------:---------:---------:---------:---------:---- Timothy C. May | Crypto Anarchy: encryption, digital money, tcmay@got.net 408-728-0152 | anonymous networks, digital pseudonyms, zero W.A.S.T.E.: Corralitos, CA | knowledge, reputations, information markets, Licensed Ontologist | black markets, collapse of governments. "National borders aren't even speed bumps on the information superhighway."