Minimizing consumer worry….

I’ve had a decade long obsession with economics, financial technology and digital products. From working with the largest market data company in the world, to building a mobile payment solution for restaurants in 2013, to working with the largest banks, retailers and loyalty companies in the world on digital product development, ranging from mobile payments, to robo-advisors to AI-driven credit approvals — my passion has been transformation of commerce with technology.

This passion was fuelled even more once my brother convinced me that blockchain, and cryptocurrencies, was where the ultimate transformation was going to happen. As with anyone jumping into bitcoin and blockchain, you are bound to come across Nick Szabo, and his countless thoughts on the society and money. Szabo is one of my favourite writers and thinkers of the current time. He is very well researched and thorough in his thinking. It was his paper, Micropayments and Mental Transaction Costs, and one of his shorter blog posts, Estimating and minimizing consumer worry, that rounded out a hypothesis I’ve been working on since 2013.

To transform how the world transacts, we need to take consumers and service providers on a journey from the status quo — which is identity and data-linked transactions — to the promised land of anonymous and pseudonymous transactions through a bi-modal user experience. This bi-modal experience supports today’s payment methods, and tomorrows, so as to minimize immediate learning curves and disruption for service providers, consumers and all the different parties that make up the commerce stack. The importance of this bi-modal approach is that economics and incentives, backed by network effects as a result and broad privacy trends, will eventually move commerce and transactions to the promised land. This happens as both consumers and service providers iterate together on how to pay, consume services and interact with each other.

For this first part, I will focus on summarizing Szabo’s Index-of-Worry calculation, and add another layer to this, which I feel successfully encompasses the average consumer’s experience across all service providers. This is also the first area I feel we’ll see service providers and consumers iterate together on. This is also one of the core focuses of ID.DIRECT, the open initiative behind a new privacy-first sign-on and data exchange smart contract driven by users, wallet developers and payment processors together.


Index-of-Worry (IoW), as defined by Szabo, is a proxy for the worry caused to customers about privacy, theft and value received for money spent. Szabo goes on to define the components of IoW:

IoW = # of lines of a form + # of repeated charges (for content or services of variable value)

Szabo continues to clarify that if a Service Provider is funded by ads rather than consumer payments, then the proportion of screen space covered by ads, or other reasonable estimate of the delay and distraction of the ads, can be substituted for repeated charges.

IoW for a single customer varies from business-to-business, but IoW does not change drastically for every new service or merchant a customer considers, especially where subscription or payments are involved. Below is the IoW for popular subscription services, which I’ll update with more.

One metric, based on IoW, which I argue should be considered is the Marginal Index-of-Worry (MIoW).

MIoW is the IoW for every additional Service Provider or merchant a customer has to register and purchase with. Today, barring a few centralized single-sign on (SSO) solutions, which share personally identifiable data (PII), customers experience an MIoW which is equal to the average IoW of all Service Providers and merchants. We just haven’t been able to realize a better user experience.

Why is this the case? There are plenty of SSO solutions offered by the likes of Facebook, Google, Twitter and countless others, why haven’t they been adopted ubiquitously? The answer is simple. SSOs, for the most part, are centralized services with proprietary datasets controlled by the provider, which tend to be walled gardens that you should expect to limit or throttle the service for their distinct benefit.

Enter decentralized identity solutions.

For those that know me, they know I love, love, love, what public blockchains are going to do for identity, property and commerce. Specifically, the notion of self-sovereign identity, and the ability for a user to control their data, is one of the largest opportunities in front of us. Offerings like Civic are attempting to shift the relationship people have with governments, services and others, to one of an opt-in basis. I truly believe in this mission, and I think this is just the beginning or realizing the wider vision of faster payments and secure login.

Arunan Sri is a husband, father-to-be and very passionate about all things Arunan Sri is a futurist and very passionate about all things technology. He has helped startups and large companies, including some of the largest banks, retailers, manufacturers and loyalty programs in the world, ideate and build digital products used by hundreds of millions of people.