At 3:25 AM -0400 5/12/00, Anonymous wrote:
>Recently I saw at comment on slashdot suggesting how to pay for
>MP3s. Suppose you know 100,000 people like a particular artist. If
>they all aggree to pay $1 upfront for the release of the next album
>then it is released. If the artist does their job - and keeps
>turning out good albums people will keep buying. Payment is based on
>reputation. It turns out that there is a site set up to do stuff
>like that - loudvoices.com.
>It looks like this could be used for any IP and most anything that
>government does - and could essentially replace the tax system.
>Immagine funding a space program this way !
As others have noted, this sort of "shareware futures" idea has come
up many times. We used to discuss it several times a year on the
Extropians list, back around '92-93. The main context was collecting
voluntary payments which would be placed in escrow to incentivize
someone to produce some product (software, music, etc.).
There are bidding protocols where N parties make a firm bid for some
service. I think the commercial instantiation of this is ubid.com, by
the way. Usually these bids are for real products, with delivery to
the N winning bidders.
Economics is about the allocation of scarce resources. Voluntary
payments usually don't do well, for the usual game-theoretic and
human psychology reasons:
* "I was planning to send in my $5 contribution...maybe next week."
* "Why pay anything for something that is free?"
[This is the killer.]
* "You expect me to bid $1 so that a band will deliver an MP3 in six
months? Get outta here." (Lack of robust dcash and escrow services,
unenforceability of contracts...)
* amount of money put upfront is trivial (in the MP3 example cited
above, collecting $100K, even if unlikely, is also a trivial amount
for a major band to think about...barely pays for studio time, etc.,
etc.).
* "I like buying my music anonymously...I heard that Metallica plans
to get the records of all those who offered money to Siliconica and
sue them." (Absent robust dcash many schemes fall apart.)
Anyway, I'd love to be proved wrong on these points. But the
shareware experience lo these many years is not encouraging for the
"voluntary donation" model. While there were some shareware
developers who went on to achieve financial success, mostly it was
because their shareware products exposed their names to others.
Linux may be cited as a counterexample. I don't think it is, for
various reasons. But this would be a long discussion.
(And certainly no one is going to fall for this logic: "A young
student in Finland is asking for donations for an alternate operating
system he plans to develop. If enough people send him $1 he'll
deliver something he plans to call "Linux" in a few years.")
Economics is about the allocation of scarce resources. Resources may
be kept scarce by metering them suitably. Crypo allows some secrets
to be kept secret and/or metered properly. Crypto also makes some
secrets widely available, untraceably.
--Tim May
--
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Timothy C. May | Crypto Anarchy: encryption, digital money,
ComSec 3DES: 831-728-0152 | anonymous networks, digital pseudonyms, zero
W.A.S.T.E.: Corralitos, CA | knowledge, reputations, information markets,
"Cyphernomicon" | black markets, collapse of governments.
