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The Gomer Bolstrood Furniture Will Be A Bonus

One brief thing for you to consider. It’s been more than five years since I unilaterally declared a moratorium on the webcomics internecine pissing match over micropayments (and you know — it’s worked! Nobody gets het up about micropayments anymore). Key points for those on both sides of that one-time debate:

If you think that [micropayments are] crap, please acknowledge that they may eventually come about, but only by piggybacking on other protocols that will establish identity in a manner much stronger than is available today. If you’re in favor of them, please acknowledge that a viable one-click micropayment system won’t be developed until a viable one-click macropayment system is developed (because with the costs of building the damn thing, any developer is going to need to see a return on investment before scaling down). To get to the McCloudian promised land is probably going to require something analogous to a national ID card, linked to your bank account, along with the inevitable unintended consequences (think identity theft is bad now?). [emphasis original]

It all comes down to identity and accountability, and the twin horns of that dilemma got thrown into sharp relief, thanks to a startling claim made by a user of Bitcoin. Bitcoin is not micropayments; it’s much closer to macropayments, but in all honesty it’s less a payment service than an attempt to set up an independent, anonymous, as-untraceable-as-sweet-sweet-untraceable-cash e-currency¹. The user in question claims to have had 25,000 “bitcoins” (which currently trade for US$18 to the BTC or so) stolen from his account.

The problem? Since Bitcoin is set up as a peer-to-peer architecture that makes users independent of central authority, but also provides those running Bitcoin no way to determine if the theft actually took place. The P2P model of Bitcoin certainly has the side-effect of minimizing friction and transaction costs, but those transaction costs (which have a definite lower threshold) are what give you the ability to investigate and resolve cases like this.

Having a robust transaction guarantee mechanism, however, costs personnel and servers, and that sets a minimum on the amount of money that can be practically transferred, leading to the ever-present disclaimer, Feel free to drop a contribution in my PayPal account, but keep in mind that less than ____, I don’t actually get anything because of fees. Right now there doesn’t seem to be any way to build a happy medium between “cheap to use in small amounts” and “we can protect you against bogus transactions”.

In non-technological news, as of this writing, it appears that Hallmark either has a sense of humor, or lawyers that type slowly.

¹ Those of you familiar with Cryptonomicon know what I’m talking about.

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[…] Bitcoin New Micro Payment System Original Source: Fleen […]

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