It’s a bit of a truism that you can’t do micropayments to cover the true marginal cost of serving a webpage, adding a user to your service, or other Internet activities, because the gap between free and epsilon is psychologically larger than the gap between epsilon and a dollar. It occurs to me that this curious psychology seems to map onto a logarithmic utility in money: Clearly the difference between lim(x to zero)[log(x)] and log(epsilon) is larger than the difference between log(epsilon) and log(1) for any finite value of epsilon. I’m not sure if this actually explains anything, but I thought it was kind of neat.
Incidentally, I’m confused over the fact that so few sites or people seem to use Flattr, despite it basically solving this problem. (Well, it’s microdonations rather than micropayments, so you can’t really require your users to pay anything, but still.)
so you can’t really require your users to pay anything, but still.
Can you tell where the microdonation comes from? It seems to me that you could pull a kickstarter-like business model and promise goods/services in exchange for a donation up front.
The interesting thing about that observation is that it’s very much about how the internet get’s used in the West.
In China where a lot of internet use happens in internet cafés where uses pay the internet café by the hour micropayments for virtual goods are used more frequently than in the West.
Additionally transaction costs are a big deal when it comes to micropayments. Paypal’s micromayment fee is 5% + $0.05 per transaction.
If we would have cheap micropayment there a chance that a greater ecosystem of services that need micropayments can grow.
Bitcoin did promise being cheap but still have some substantial transaction costs. On the other hand Ripple (https://ripple.com/) provides the opportunity of a cost of $0.0001 per transaction.
Regarding Ripple, I thought that in the United States, financial institutions were required to know their users’ identities. I don’t see how this isn’t blatantly illegal.
It’s a bit of a truism that you can’t do micropayments to cover the true marginal cost of serving a webpage, adding a user to your service, or other Internet activities, because the gap between free and epsilon is psychologically larger than the gap between epsilon and a dollar. It occurs to me that this curious psychology seems to map onto a logarithmic utility in money: Clearly the difference between lim(x to zero)[log(x)] and log(epsilon) is larger than the difference between log(epsilon) and log(1) for any finite value of epsilon. I’m not sure if this actually explains anything, but I thought it was kind of neat.
Incidentally, I’m confused over the fact that so few sites or people seem to use Flattr, despite it basically solving this problem. (Well, it’s microdonations rather than micropayments, so you can’t really require your users to pay anything, but still.)
Which came first, the massive user base or the many clients? Looks like a classic chicken-egg problem to me.
Edit to add: Which being said, I just signed up for it as a creator. :)
I’ve not noticed websites I like using flattr, so I have no reason to sign up for it.
Very few people use it, so it’s not worth it for sites to sign up for it.
Can you tell where the microdonation comes from? It seems to me that you could pull a kickstarter-like business model and promise goods/services in exchange for a donation up front.
People can choose to donate either anonymously or non-anonymously, so I guess that it could work.
The interesting thing about that observation is that it’s very much about how the internet get’s used in the West. In China where a lot of internet use happens in internet cafés where uses pay the internet café by the hour micropayments for virtual goods are used more frequently than in the West.
Additionally transaction costs are a big deal when it comes to micropayments. Paypal’s micromayment fee is 5% + $0.05 per transaction. If we would have cheap micropayment there a chance that a greater ecosystem of services that need micropayments can grow.
Bitcoin did promise being cheap but still have some substantial transaction costs. On the other hand Ripple (https://ripple.com/) provides the opportunity of a cost of $0.0001 per transaction.
Regarding Ripple, I thought that in the United States, financial institutions were required to know their users’ identities. I don’t see how this isn’t blatantly illegal.
Two nodes in the Ripple network that trade trust each other know their identities. The actual trade happens between those two nodes.
But even if they need to do more know-your-customer formalities I don’t see why that should push the price much higher.
Google Ventures does invest in the company behind Ripple, so they seem to believe it’s legal.
The inconvenience of setting up a payment method may play some role.