Hashcash is the digital money of online publishing
Micro-payments for viewing media… micro-minted on the spot.
I’m pretty sure now that we can, very easily and cheaply indeed, build and host a decentralized, secure digital money network such as the Bitcoin network but that is also scalable (processes 10,000+ transactions per second versus the 10 TPS of “blockchain” systems). I wrote an article a couple days ago that has back-links to the other ten or so articles I’ve been writing on the subject — this should take care of giving some weight to this claim of mine.
I propose that deployed digital money systems, that is, specific, running digital money networks with specific software, have to choose between two “game genres”, or two different types of rule-sets for money economies. I name these two genres the scarce money genre and the democratic money genre.
Scarce money is any money that is not free for all users to mint (issue). In scarce money systems, the smarter traders — the pro-league players — end up with all the money, while the amateur trader base (or people who aren’t really aware that a scarce money system is a zero-sum game) will end up with nothing, having to be constantly re-seeded in-game by those who will always, naturally and effortlessly, end up with all the money.
A democratic money is any token-swapping system where people can produce the tokens they need without having to transact, bargain or sell something (or themselves) to someone to get that money. That is, if whatever the person has to do to get the money from others is degrading — which is often the case when it is scientifically shown that the best traders in a scarce “real money” game (one that is used to regulate social power in a real society) are sociopaths with high probability — then that person has the option to mint (issue) that money herself, an operation that doesn’t need to be free of personal cost, but one that is free of humiliation and, if we’re talking about open digital money systems, probably free from bureaucracy.
My preferred way for a person to mint a democratic digital money is through proof-of-work, and have that person be rewarded an amount of tokens that is directly proportional (1:1) to the computing power spent. That way of using proof-of-work as an “1:1” reward mechanism was pioneered by the Hashcash system, a system originally intended to fight email spam. Our “democratic” digital money network will be, essentially, a way to solve the double-spending problem for the original Hashcash system of decentralized and secure value minting. We are taking the original Hashcash system, making it a Transferable Hashcash system and calling that a democratic online money system.
Now, if I can build a scalable, secure, decentralized digital money system that can handle tens of thousands of transactions, approaching what the VISA network can do (the usual benchmark used to troll the Bitcoin network), I can customize the “game rules” of the money that is to run in that software to be a democratic money game and solve micro-payments for online publishing, assuming democratic digital money has non-zero trade value.
The solution is trivial: whenever a person wants to view some media, they are handed out a micro-bill of, say, $0.001. That micro-bill is paid on the spot by having the client “mine” a Hashcash token locally. The generation of that token will take the time and electricity cost that approaches $0.001, that is, the time and energy needed to make your computer spend $0.001. The cost to the client is much lower than if they had to mess with “real money” or even “Bitcoin” or its alternatives. A micro-transaction in a server-cluster-based digital money system is a possibility, as the “fees” will be several orders of magnitude lower.
Problem solved. And what’s even better, the user can let her computer generate money whenever it is idle. Whenever it is time to use that money, she will not have to waste any time before being able to use it, unless she is completely out of it.
What if people don’t want to generate that money at all? They can buy it. You can enter your credit card online to purchase $10 in digital money, and then view 100,000 pages with that $10, instead of having to enter your credit card details many times, or watch ads, or “register” your e-mail address for newsletters, etc.
Oh, yeah. It is the end of ads in content. As a publisher you can stop melting the brains of your customers with ads.
Here’s some quick math showing the transactions don’t cost anything. “Unmetered bandwidth” servers of the sort that we need cost around $100/mo each. With 200 of these servers the whole system will cost $20,000/mo to maintain. Assuming it does 10,000 TPS, the system can do 25 billion transactions per month at peak, where each one will then cost about $0,000001. So if my transactions are to the tune of $0,001, each one just needs a 0,1% fee on it which is actually unheard of in the world of “real world” payments.
Did I mention it is trivial for the servers of this digital money system to charge fees? They cost nothing to assess, and the servers can’t cheat — you can check out the other articles to see why. If the digital money used to charge the fee has itself trade value in the “real world” that pays for the physical servers, then it seems we have a “business case” for the entire system — it doesn’t need to raise donations like Wikipedia, etc.