Party A enforces Party B's intellectual "property"
1,691 karma · joined September 6, 2024
Stablecoins, which not decentralized at all (and thus defeat the entire purpose of cryptopcurrency) are allowed to break the rules by wearing the label of "cryptocurrency", with the implication being that cryptocurrencies are just going to break the rules anyways.
The fact that AI agents are involved does not nessisarially tilt the scale towards the configurability of smart contracts. If you have extra cognition, you can probably spend some time thinking about what specialized protocol to use.
I am pessimistic on etherium and similar "open-ended" scripting cryptocurrencies because everything they can do can be replicated with a specialized cryptocurrency. So as soon as some killer app emerges (e.g. ENS) people will realize that it's more cheap/fast/decentralized to do this with a specialized system (e.g. namecoin).
The open-ended systems like etherium can only succeed if there is demand for constantly-novel open-ended scripting that interacts with other open-ended scripts all the time. I really don't think that's the case. If you can capture 90% of the use case with different specialized cryptocurrencies and do atomic swaps between them, that will always be better from a technological standpoint.
The fundamental limit of cryptocurrencies is bandwidth, and how much data you can sync between all nodes: either you have a few high-bandwidth nodes or many low-bandwidth nodes. Splitting different contracts across networks is naturally better than sharing a single blockchain and competing for gas.
People don't want this to be the case because you can't achieve vendor/cryptocurrency lock in, and "competition is for losers". If you have multiple independent blockchains, you pretty much must have multiple tokens. But it's true.
The moat for "utility" smart-contract systems is dependent on the cost of switching, which will be lowered by AI if anything. At the end of the day you can just fork the blockchain if you don't like the tokenomics or even just the fees. Some assembly required, but that is why stuff like litecoin can exist in this market.
This is an aside, but in an ideal world, such a mechanism would also be used to reduce fingerprinting! You would have to accept a popup for a page to use features like WebGL, for example.
>Any legitimate financial tool needs a way to roll back fraudulent transactions.
I strongly disagree. I would even say the opposite: the ability to bureaucratically roll-back transactions threatens the legitimacy of money. Specifically, it makes the money non-fungible.
In cryptocurrency, there are transparent multisignature-based escrow systems that allow you to have a defined window of time where the money is co-managed according to certain rules. But transactions need to be able reach a "finalized" state where they are irreversible. Otherwise you just can't ever have a truly secure method of payment between untrustworthy parties and micropayments become useless.
Also, it does not need to be cryptocurrency. Micropayments just need to be efficient, secure, and irreversible. There are other payment systems based on Chaumian cash, (GNU taler being one example) that this could be built on.
Sites like the internet archive are already funded by donations from viewers like you. I see the scheme as essentially spreading out the donations based on who uses the most bandwidth. It makes it easier for anyone to spin up a mirror of archive.org, and it makes it more secure for sites like archive.org to accept donations.
"Intermediate" micropayment solutions already exist. Anna's archive charges like $5 a month for a "donation" that puts you in a fast lane to download PDFs that you would otherwise have to get from some book site or a scientific journal. I bet they would prefer to charge per-download if they could feasibly do it.
I agree that some (most?) applications of micropayments are really gimmicky. But some applications are naturally suited to micropayments. The advantage of micropayments is that you can interact with ad-hoc vendors without setting up a pre-existing financial trust-relationship. For example, you could be at an bus terminal and have several pop-up vendors for wifi or electricity that charge per MB or per watt-hour. It enables competition.
The more gimmicky applications you mention like hardware subscriptions all involve some element of vendor-lock in that prohibits the advantage of micropayments systems in dealing with ad-hoc vendors. This is more analogous to those in-flight wifi services on airplanes: there is an established financial relationship with the airline and no competition, so there's little use for the low-risk micropayments.
For example, I would say that the credit card system is essentially subsidized through other forms of payment via transaction fees/cashback (I can go into detail why I think this is the case, if you would like). This is a mechanism that benefits the credit card companies at the users of other payment mechanisms (cash, crypto, etc.). So this mechanism of the credit card payment system has the effect of strengthening it against competition.
Secondly, I am not even sure if it's a negative externality. It depends on how fraud is handled in the conventional banking system and who takes the blame. Let's say that the charge-back goes all the way to the exchange, so now the exchange that facilitated the transaction is down both X cryptocurrency and Y dollars. In order to be profitable, the exchange needs to charge more in fees and needs to spend more in surveillance to counteract fraud. So ultimately the users of the exchange would pay for fraud.
Lastly, it is important to differentiate the two sources of fraud. There is the fraud inside of the micropayments system, where I pay 0.01 cents to view a webpage and I don't receive what I want. That's a very low-risk fraud, and by gaining a fraction of a cent, they can lose like 100x that in potential business through micropayments.
Then there is the fraud that happens at the border of "hard" money (cash/precious metals/crypto) and "soft" chargeback-able money in the conventional credit card system. This is pretty much facilitated just by these hard forms of money existing and being exchangeable with soft money. I would argue the weakness lies in the insecurity of the soft money systems (specifically the outdated systems of authentication). But you could still apply some sort of limit to the amount of money a single bank account can exchange for crypto (say, $20 a day) without hurting the micropayments system, because the payments involved are so small. So the risk of fraud at the exchange could be much lower for this specific use-case of cryptocurrency.
1. Ad networks tend to benefit from having more data. There are economies of scale for sites like Youtube vs random pop-up video hosts that would want to mirror youtube videos, for example. The "bottom" may still be a micropayments system because they're easier to deploy.
2. It's possible that the entire ad economy is destroyed anyways through the use of adblockers, which is increasing. Hence google's push for WEI and the general industry push for TC and such. As long as none of these mechanisms of client authentication are able to take over the web, the profitability for ad networks will dry up.
Absent micropayments, there will be other attempts to introduce sybil resistance to the web, due to threats like AI scraping. Currently people are deploying PoW-based solutions, because they are the lowest effort (they can be implemented by polyfill). I imagine a hybrid PoW/micropayments system could emerge where PoW mining shares could be used interchangeably with micropayments. Basically each website acts as a cryptocurrency mining pool, so the website gets some reward in the mean.
I think the main failure of micropayments lies in the integration with the web browser, it needs some sort of plugin where HTTP 402 is effortless to interact with. It goes without saying that if you don't build it, they won't come.
There is not really a "killer app" yet. Some attempts in the bitcoin community like nostr and stacker.news are marginally used (but only to facilitate bitcoin dork-to-dork communication), and there have been some experiments in live-streaming and gaming. But nothing stands out. The barrier to entry of any app that requires putting money in, even a small amount, is naturally very high. A hybrid PoW/micropayment system is promising because it has the lowest barrier to entry.
On the technical side, you have tradeoffs between the complexity of using the app (especially with bitcoin payment channels) and decentralization. I don't regard it as an intractable problem.
The social problem is that most internet users are short-sighted and don't care about decentralization. They are just looking at some new company/service to throw their money into and escape their current service provider, which creates the problem they are running from. See: users fleeing twitter for bluesky, users fleeing streaming services after fleeing cable.
So pretty much any solution with a tradeoff between complexity and decentralization will suffer compared to a totally centralized and simple solution.
The decentralization of the new system needs to enable some new feature to get a foothold. Facilitating piracy is one such example, it could be the "killer app" for micropayments. Sites like Anna's archive already have some sort of cryptocurrency donation mechanism.
As you, I associate the micropayment idea with truly tiny individual payments. Like paying for bandwidth by megabyte, where each payment is much less than a cent.
The risk of fraud due to any individual payment not being fulfilled is low. At most you loose 0.01c of money, and the vendor loses $ of potential business.
The entire field of cryptography is about developing technical solutions to previously intractable social problems.
As I have described earlier, the race to the bottom is a feature, not a bug. It encourages other sites to mirror your content.
I would pay you 0.002 cents before clicking on that link. I already have to expend time and energy reading it, and I already pay for an internet connection to read it. If you put some sort of PoW firewall to deter AI scraping like many sites have been doing, I already have to expend money in the form of electricity to access the site.
It merely reflects the designer's willingness to engage in sci-fi tropes.
The justification for all of the security theatre after 9/11 was that it would stop terrorist attacks. Makes no difference what passport they have as long as you can determine they're not smuggling a bomb up their ass.
Not to mention that you can't take down a plane with a box-cutter anymore. The only way the 9/11 hijackers were successful is that the remaining passengers thought that the hijackers were pirates. It's a burned 0-day.
You could just enact a policy of shooting down all planes within a certain radius of large buildings. I wouldn't be surprised if the annual cost would be orders of magnitude less than the annual cost of TSA. As long as you could ensure that aircraft couldn't be weaponized against major infrastructure, hijacking a plane would be no more dangerous than hijacking a train.
I mean, I know what you are getting at. I agree with you on the current state of the art. But advancements beyond this point threaten everyone's job. I don't see a moat for 95% of human labor.
There's no reason why you couldn't figure out an AI to assemble "the architecture and detailed design work". I mean I hope it's the case that the state of the art stays like this forever, I'm just not counting on it.
Making tiny modifications isn't just a method of circumvention, it's like part of the main workflow of using a 3d model.