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Micropayments and the Future of the Web

For 99 cents each, you can make your cell phone ring sound like such classics as “”Hard Knock Life”” or the theme music from “Scooby Doo.” Cingular plans to add games, logos, and graphics before the end of the year. Of course anyone who has spent a minimum amount of time surfing the Web knows that advertising is the dominant revenue model for commercial sites. Nearly $1 billion will be spent on online ads in 1998, ranging from cars to cold medicine to porn.

It’s worth noting that some of these in-game purchases are larger than 소액결제 미납 and that a ‘Paymium’ model is emerging, where both up-front and in-game purchases are required to unlock all features. It’s worth noting that this is definitely not universally agreed as a good thing, even by the game developers/publishers who use it – something we’ll discuss in more depth later. Even the most cost-effective online payment facilitators, such as Stripe, charge $0.30 plus roughly 3% of the transaction. But I believe it doesn’t make economic sense for an end user to pay pennies for each article consumed when the transaction itself costs $0.30. Flattr is more of a microdonation system than a micropayment system launched in 2010.

Even if authors and search engines do link to a subscription site, users will never go there because the cost of signing up for a subscription and the time needed to do so cannot be justified for the sake of a single desired page. Thus, the site never gets visited by the user; it also never gets the chance to prove its value to that user and convert him or her into a loyal, repeat visitor. Auditing may become really expensive with the expansion of the number of micropayments. Micropayments are also used to distribute royalties, and gratuities through online delivery apps like DoorDash, and freelance income through sites like Fiverr and Upwork. One of the most important roles of markets in a society is to discover the level of demand for goods and, in turn, how much of that good an economy should produce. That’s complicated by the zero marginal cost nature of digital goods , but it still broadly holds when it comes to things like software development.

Displaying, in this context, means finding the content, sorting it, and packaging it in various ways. The problem with subscription-based content is that consumers must pay up front for a set term, which means they can’t be sure of what they’re buying. Although some publications retain the same quality and focus for years, many sites these days are changing rapidly because of the market. What a consumer pays to download today isn’t necessarily what she or he wants to download six months from now. The most interesting example of desegregating traditional bundles and trading them over the Internet lies in MP3 technology that enables compressed music and video files to be downloaded from the Web. MP3 files are roughly one sixteenth the size of a CD file and can be stored on a hard drive or burned into a blank CD with the right equipment.

Analysts have noted that Microsoft’s Passport technology could be used for cash as well as authentication. However, Litan advises enterprise clients to stick to pilots for now, and tells them that they should expect to wait perhaps two to three years to implement production micropayment systems. Some believe that the community lost interest not only in extending the standard, but also in the whole concept of e-wallet plug-ins. Many consumers haven’t reacted well to e-commerce systems that require installing a plug-in. Bill Densmore, founder and VP of Clickshare, a micropayments company, refers to the e-wallet approach as “”a proven failure.””

During working hours, it is easy to calculate the value of a user’s time. If we assume that various overhead costsare about the same as a person’s salary, then somebody making $35,000 per year costs their company a cent per second. In other words, every time you access a Web page, it costs your company ten cents just for having you sit and wait while it downloads (assuming that the page design obeys the 10-second response time limit). Add time to actually read the page, and we are looking at a cost of 25 cents to a dollar every time an employee accesses a Web page (with proportionally larger costs for highly-paid staff). In this context, paying a cent for the content is nothing if it ensures higher-quality pages.

Most of micropayment’s potential lies years down the road, awaiting technical advances in encryption , trusted systems, and bandwidth. As it now stands, almost all Web commerce is conducted with credit cards and are limited by the same minimums that apply to real world transactions. Micropayment pilot programs are hindered by cumbersome registration procedures and markets restricted to companies that have worked out prior contracts with microcash vendors. But technological fixes will undoubtedly emerge that allow vendors to protect their intellectual property from piracy and simple sharing.

This disincentivizes fraud, as it becomes less profitable to cheat than to simply be a legitimate business. Alice and Bob just set the policy for how their computers transact—they aren’t personally involved in writing these transactions, validating them, or talking to the protocol. Suppose Alice wants to open a channel with Bob to pay for fuel over the next month, and she doesn’t want to ever spend more than 100 bits on gas . To start the payment channel for gas she writes a transaction that would put 100 of her bits into a 2-of-2 multi-sig address with her key and Bob’s key. Once she sends that transaction to the Bitcoin network the bits are locked in an account and can only be spent if both Alice and Bob agree. Additionally, charities and NGOs could solicit donations more directly, and with lower transaction costs, more money could get to where it is needed most.

Users of NTT DoCoMo’s wireless service can download a variety of graphics, games, and logos, paying a small fee for each item. Similarly, it’s said that merchants don’t like having to install special software or link their shopping carts to the micropayment provider’s Web site. The investment in time and resources that new software requires does pose a problem. However, we must remember that when credit cards were first introduced to brick-and-mortar businesses, store owners didn’t like buying scanners and maintaining data links to the verification centers. Although pundits have cited various reasons for the failures in the cash-equivalent services market, most of the explanations are theoretical.

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