Paying with porn
There is a growing need for a currency that is useful on the Internet for micro and anonymous transactions. Both cases are ones where credit cards won't work. Micropayments with credit cards take away all of the profit for the seller because of the transactional fees. Anonymous exchanges, by their very nature, won't use fully authenticated systems like Visa or Mastercard. Yet there are multitudes of examples of small services or digital products that are screaming for a payment system, mostly dealing with content consumption. These range from reading an online newspaper to downloading a cartoon. For an indepth discussion, see the Wikipedia entry.
Most of the schemes that have been tried for micropayments involve token aggregation; the consumer pays, say, $20 in advance, for the right to make 10 $2 transactions. This way the vendor only hits the credit company once in a while, for a twenty dollar hit. This still doesn't solve the anonymity problem, though, because entering financial information leaves an absolute audit trail back to the buyer.
So I have a suggestion: If DRMs (Digital Rights Management) ever really become workable, consumption tokens issued by a DRM system would make an excellent currency. In other words, you could read the New York Times online and pay with porn. Or you could pay with a song, of course. Although porn seems more melodramatic somehow.
The idea is that DRMS could easily issue an encrypted token which would allow a one-time use of the specified content. These tokens could allow a single Amazon.com book download or a song from itunes or some porn. If these were transportable tokens, if I could hand one off to someone else, for instance, and they had a decent expiration time (say a year), then I could barter off that token to someone to make a micropayment.
It's going to have to be something like this because the alternative is to create an online currency that would spit out cash from an ATM. The stakes for that kind of system would be too high, because the availability of ready cash would make it too tempting a target. It makes more sense to have a micropayment currency of "units" where say, one "unit" would buy a song or a newspaper.
Posted on July 26, 2006
