Thanks for the great project, it fixes the most egregious problems with bulletin boards - which reddit and hn are just fancier guis for.
There's a lot to unpack about the issues of p2p monetization. Probably a few books worth.
Before we get into the social issues I think the original sin of the internet was that IP did not negotiate payments as part of the fundamental protocol. Every layer above that suffers from the same.
This made sense in a government/corporate/university environment where the protocols were invented, but not for the wider world. I'm not going to try and give solutions because all of them are flawed in some way, but better than the current system where only surveillance advertising and altruistic services are viable business models.
> Before we get into the social issues I think the original sin of the internet was that IP did not negotiate payments as part of the fundamental protocol. Every layer above that suffers from the same.
That isn't really what causes the problem. Payments don't need to be inside the network layer of the internet.
The problem is that a digital payment system that works like IP routing doesn't exist at all, even independent of the internet. Existing banks could implement it trivially -- you walk into the branch with $100 in cash, give them the money and they give you a secret passphrase. Then the banks talk to each other so anyone anywhere in the world who walks into another bank and has the correct passphrase can get the money.
Except that there are laws against that. Know Your Customer laws that require them to know who you are and know who the person you're sending the money to is, even if what you're paying for is both legal and private. "Consumer protection" laws that require them to allow you to reverse the transaction, which means they can't just give the money to the other party, they have to sit on it for a while.
The effect of these laws is to make small transactions between random individuals incur prohibitively high transaction costs and subject honest people to capricious denial of service attacks by risk-averse financial institutions without effective recourse. It also makes people afraid to pay for things they don't want an official record of them consuming, which specifically applies to political speech when your views don't align with the party currently in office -- or the party who may be in office next year.
In other words, it interferes with people actually paying people for creating content on the internet. That leaves the creators with only advertising to support them, which implies central control by the ad network.
Fixing that requires a way to anonymously, irreversibly send small payments with low transaction costs. Which is currently de facto prohibited by law.
Thanks for bringing up these points as they are some of the biggest barriers to developing a modern payments system. The technical issues are complex but the legal and regulatory ones are even more complex.
Shameless plug, we are working on Interledger[1]. Which is designed to be an open-clearing system based on packetised payments. It works really well for low value, low-friction payments. Our initial use-case is targeting web monetisation which doesn't work on existing payment rails due to the costs.
Part of the work coming up this year will to be going after the retail payments space and I think the challenges you mentioned are definitely going to be the ones we are going to have to solve next.
No there are no systems that can deal with the $1e-10 you will need to pay for the usual packet. You don't care if someone scams you a thousand times, you do care when someone scams you a few billion times, or when you're talking to millions of people.
The cost of getting it wrong is so low on the internet that you can use the most blunt statistics to still come out ahead.
> No there are no systems that can deal with the $1e-10 you will need to pay for the usual packet.
You don't need packet-level accounting. You need, for example, to be able to charge $0.02/view for a video while getting to keep almost all the money, so that a creator with 10,000 views/day can make a decent living. Then you offer viewers a deal -- no charge if you host the video. Only a small fraction of the viewers take you up on it ($0.02 is not a huge incentive), but a few have unlimited data and are happy to get any price for something that costs them nothing, or it makes them feel like good supporters to be distributing your work, and that's all you need in order to have unlimited scalability and negligible hosting costs.
> You don't care if someone scams you a thousand times, you do care when someone scams you a few billion times, or when you're talking to millions of people.
This system isn't supposed to be a savings account, it's for small transactions. If there's significantly more money in your account than you typically spend on small transactions in a month then you're doing it wrong, and the amount in your account would be the upper limit on what you can get scammed out of.
People would still keep the bulk of their money in a traditional financial instituion that knows their name and can reverse transactions. But a payments system that works differently than that should be able to exist.
What you don't need is accurate and global accounting of packet transactions. A simple cryptographic local ledger between each pair of routers will be more than enough. The routers can then decide how the data is charged, or if the balance isn't closed somehow, just start dropping packets coming from that link. We are not talking about people doing videos - a largely vapid and useless form of entertainment only propped up by legacy add platforms like google because video adds are much more effective than text based ones - we are talking about people running routers in the center of the network. Once we have decentralized the lowest levels of the internet then we can start thinking about the higher ones.
After all the choice between lord Google or lord Verizon isn't much of a choice.
> Only a small fraction of the viewers take you up on it ($0.02 is not a huge incentive), but a few have unlimited data and are happy to get any price for something that costs them nothing, or it makes them feel like good supporters to be distributing your work, and that's all you need in order to have unlimited scalability and negligible hosting costs.
So again, the main business model is altruism with no way to actually monetize the transport layer. Replacing the kings of layer 4 with the kings of data is not a victory. It's just a different tyranny. One I don't see being much better than the current one.
Only when you can make money in each layer of the network can the internet truly be free (as in freedom).
>If there's significantly more money in your account than you typically spend on small transactions in a month then you're doing it wrong, and the amount in your account would be the upper limit on what you can get scammed out of.
Yes, that's why you shouldn't do it that way.
You don't spend 'money' you have agreements with your peers over how much data they are willing to receive from you. The clearing process is completely independent. Cash, cat pictures, happy feelings, revolutionary zeal. All are acceptable currency if the owner of the router agrees with you.
> The routers can then decide how the data is charged, or if the balance isn't closed somehow, just start dropping packets coming from that link.
At this point you're essentially arguing that network neutrality is bad and what we really need is the opposite of that.
Realize that in your system, it's Verizon and Comcast who have all the power. They're sitting on millions of customers who have no other network path to them, so they would get to charge monopoly prices to anybody who wants to communicate with them, and the customers themselves have no other choice because the incumbent ISP has a local monopoly (or the sort of totally inadequate competition that DSL is now putting forth against cable/fiber).
And if you're paying for sending data but not for receiving it, it would give ISPs all the more incentive to keep doing and increase doing the things like selling highly asymmetric connections that upload much slower than they download, which make it harder to create competitive P2P networks.
> So again, the main business model is altruism with no way to actually monetize the transport layer.
How is the network not already monetized? Is there some alternative to Verizon and Comcast where you're paying no monthly fees, short of building your own network like Google does? Even then you still have to pay for it, you're just paying for land, labor and equipment instead of service.
You pay your ISP to get you to a peering point. That's monetized. The other endpoint pays their ISP to get to the peering point. Also monetized. What's left? The peering link? The actual cost of that is such a small percentage of the total that you can round it off to zero, and people only really try to charge for it when they're rent seeking because they have a monopoly path to a large number of customers.
> Yes, that's why you shouldn't do it that way.
Because occasionally people who make bad security choices will be encouraged to do better after suffering an uncovered loss of something like fifty or a hundred bucks? That seems like a small price for having a payments system that has low transaction costs and protects privacy.
> You don't spend 'money' you have agreements with your peers over how much data they are willing to receive from you. The clearing process is completely independent. Cash, cat pictures, happy feelings, revolutionary zeal. All are acceptable currency if the owner of the router agrees with you.
How is that any different than it already works? Anybody can configure their network to accept traffic or not from whoever they like. What's missing is an efficient method for clearing small payments -- but that's a general problem, not anything specific to internet links.
Payment is far too complex and abstract to contemplate building in at layer 3 (IP) of the network stack. Even in some idealized alternate history it would have never worked, and probably still couldn't work today.
The internet is happily chugging along on routers and switches who know nothing about the global topology of the network.
When you reduce the payment problem to 'how do we get two routers to keep track of the data passed between them' it is a non-problem that even the first generation of imps could have solved).
Why? I don't care that I will need to pay 1e-10 dollars to have a packet sent 10 times. Likewise I don't care if I lose 1e-10 dollars because someone doesn't pay for their bandwidth.
Networking is just not worth lying about until you get to sums for which lawyers can get involved, at which point you have to deal with lawyers.
There's a lot to unpack about the issues of p2p monetization. Probably a few books worth.
Before we get into the social issues I think the original sin of the internet was that IP did not negotiate payments as part of the fundamental protocol. Every layer above that suffers from the same.
This made sense in a government/corporate/university environment where the protocols were invented, but not for the wider world. I'm not going to try and give solutions because all of them are flawed in some way, but better than the current system where only surveillance advertising and altruistic services are viable business models.