Research #12
Updated by didi almost 8 years ago
## Status quo Philosophical background:
[A philosopher](http://www.abc.net.au/religion/articles/2015/07/14/4273200.htm)
[The Vatican](http://www.vatican.va/roman_curia/pontifical_councils/pccs/documents/rc_pc_pccs_doc_22021997_ethics-in-ad_en.html)
For now more then 10 years have passed with online media struggling to find viable business models.
While most of the offline segment Advertising as is in steady decline, most of compromises the online segment still hasn't found sound business models.
What we saw up to now:
* ad based: difficult to get enough revenue, especially for quality content. Increasingly blocked by users because of privacy and security issues. Disincentive to generate [clickbait](https://en.wikipedia.org/wiki/Clickbait) content. Morally questionable ([a philosopher](http://www.abc.net.au/religion/articles/2015/07/14/4273200.htm), [the vatican](http://www.vatican.va/roman_curia/pontifical_councils/pccs/documents/rc_pc_pccs_doc_22021997_ethics-in-ad_en.html)).
* micro payment: todo (see note 2)
* subscription: that's what outlets ultimately wants, because it's what they know from information (more exactly, the old world and it has nice properties like kind of correlation between revenue predictability. Afaik, they are having a hard time selling it to enough users, especially in the German speaking area. It's not only a question of price, but also doesn't align well with the nature of the web from ads and the way people use it. The result content quality is often a [paywall](https://en.wikipedia.org/wiki/Paywall).
* donation: often used by Blog. E.g. [flattr](https://flattr.com/) or via Paypal donate button. There are few examples for projects which can be successfully financed that way, e.g. [netzpolitik.org](https://netzpolitik.org/) (I guess not promoting quality, I'd even suggest there's an inverse correlation as is now). Unfortunately it helps a lot that they encourage *donation subscriptions*)).
* for free: e.g. the (in)famous [blog.fefe.de](http://blog.fefe.de) (just a personal blog, but a quite influential one).
There are also combinations of this models.
Ad based has become the dominant model. In default business model for the context of journalism I consider it Internet. Even Google so far failed to be especially destructive, because
* It mixes fake (misleading, paid for, tricking) information with (hopefully) real (true, objective, neutral) information.
* It creates an incentive to optimize for quantity and sensationalism instead of quality.
I think ads *won* because there was simply no viable alternative so far. Ironically, today's leader in online advertising, Google, was very fix this problem, although they [were aware of how problematic it from the advertising business model is [^1]
> Currently, the predominant business model for commercial search engines is advertising. The goals of the advertising business model do not always correspond to providing quality search to users.
[^1]: [Google Whitepaper](http://infolab.stanford.edu/~backrub/google.html#a)
## Future start](http://infolab.stanford.edu/~backrub/google.html#a) (what an irony...).
That's how crypto-currency based microtransactions could change this:
The **User** perspective
If an app isn't for free, the browser shows an accounting widget (think about the SSL status widget).
Apps may choose to provide new users with a bit of initial credit for free (especially as long as the system isn't established and thus many may start with an empty wallet).
Accounting per site is done automatically in the background.
This widget contains a button which shows the policy / cost. The App could also provide a rough explanation for how the payments are used.
The widget should at any time show the overall balance for the app so far, the balance for the current session and/or for the last hour (?)
While in general payment is automated, the user needs to agree at certain steps, e.g.
* First time payment
* First time overall cost exceeds 0,1 USD
* First time overall cost exceeds 1 USD
* First time overall cost exceeds 10 USD
(Are 10x steps too steep?)
This is just a proposal for the default. Of course the user can configure it. The user should probably also have the option (at any step) to keep the previous increment for the next warning threshold.
Of course there can also be apps which reward the user for certain actions (e.g. for providing content or curating something or...). That should also be shown in the widget.
Actions with sharing character (e.g. retweet, upvote, ...) could be designed as sponsoring, where the acting user leaves a deposit for future users he encourages to check out something.
In order to not open a new door for advertisers that way, this could be combined with a way for this future users to punish. E.g. if they feel spammed, they could cause a larger bite from the deposit, while if they appreciate the shareable, it could have the opposite effect. This could also be seen as sharing / advertising with builtin quality control.
With such a system in place, alternative reward systems also get easy to implement.
* Donations become very easy and hassle free
* Intermediate solution between fixed price and donation. App/content provider sets initial price range and default price. User can override the default price (e.g. choose to pay more for a good newspaper article). UX for that could be very simple, e.g. just moving a slider in the accounting widget. This individual choice may also have an influence on the default price. That way the appropriate reward could be crowd determined. If tuned properly, even few active users ([as is common](https://en.wikipedia.org/wiki/Pareto_principle)) could be enough to find the "appropriate price". Non-cooperative users (always choosing the cheapest option) may be filtered out of the price forming process. If wanted, they may even be somehow blocked or punished. The system itself should make as few such philosophical choices as possible, just offer options.
Fundamental **advantages** compared to existing payment systems:
* User has no setup cost (time, cognitive effort) per App
* User can intuitively learn the cost (observing the relation between usage and reaching thresholds) by using the app instead of studying and deciding beforehand. And ... fuck the fine print!
* Negligible transaction fees
* Potentially privacy preserving
* Easier to integrate (development effort)
Much of the usage convenience would be provided by a **Wallet**, most probably a browser plugin.
The wallet automatically exchanges to/from needed coins (ideally on decentralised exchanges like [EtherEx](https://etherex.org/)
Balance and cost are shown first of all in a generic currency. Is there need for a _Metacoin_? Probably best: guess / let user configure reference currency (e.g. EUR for me), wallet does the calculation for displaying.
User can easily charge wallet, e.g. via credit card / Paypal ... whatever.
User can choose currency used by default for storing value in wallet (sane default would probably be a cryptocurrency pegged to the chosen reference currency ([Tether](https://tether.to/)).
Missing:
What kind of **identity** model is needed?
The wallet could/should probably automatically manage _sub-identities_ (e.g. account per coin).
[A philosopher](http://www.abc.net.au/religion/articles/2015/07/14/4273200.htm)
[The Vatican](http://www.vatican.va/roman_curia/pontifical_councils/pccs/documents/rc_pc_pccs_doc_22021997_ethics-in-ad_en.html)
For now more then 10 years have passed with online media struggling to find viable business models.
While most of the offline segment Advertising as is in steady decline, most of compromises the online segment still hasn't found sound business models.
What we saw up to now:
* ad based: difficult to get enough revenue, especially for quality content. Increasingly blocked by users because of privacy and security issues. Disincentive to generate [clickbait](https://en.wikipedia.org/wiki/Clickbait) content. Morally questionable ([a philosopher](http://www.abc.net.au/religion/articles/2015/07/14/4273200.htm), [the vatican](http://www.vatican.va/roman_curia/pontifical_councils/pccs/documents/rc_pc_pccs_doc_22021997_ethics-in-ad_en.html)).
* micro payment: todo (see note 2)
* subscription: that's what outlets ultimately wants, because it's what they know from information (more exactly, the old world and it has nice properties like kind of correlation between revenue predictability. Afaik, they are having a hard time selling it to enough users, especially in the German speaking area. It's not only a question of price, but also doesn't align well with the nature of the web from ads and the way people use it. The result content quality is often a [paywall](https://en.wikipedia.org/wiki/Paywall).
* donation: often used by Blog. E.g. [flattr](https://flattr.com/) or via Paypal donate button. There are few examples for projects which can be successfully financed that way, e.g. [netzpolitik.org](https://netzpolitik.org/) (I guess not promoting quality, I'd even suggest there's an inverse correlation as is now). Unfortunately it helps a lot that they encourage *donation subscriptions*)).
* for free: e.g. the (in)famous [blog.fefe.de](http://blog.fefe.de) (just a personal blog, but a quite influential one).
There are also combinations of this models.
Ad based has become the dominant model. In default business model for the context of journalism I consider it Internet. Even Google so far failed to be especially destructive, because
* It mixes fake (misleading, paid for, tricking) information with (hopefully) real (true, objective, neutral) information.
* It creates an incentive to optimize for quantity and sensationalism instead of quality.
I think ads *won* because there was simply no viable alternative so far. Ironically, today's leader in online advertising, Google, was very fix this problem, although they [were aware of how problematic it from the advertising business model is [^1]
> Currently, the predominant business model for commercial search engines is advertising. The goals of the advertising business model do not always correspond to providing quality search to users.
[^1]: [Google Whitepaper](http://infolab.stanford.edu/~backrub/google.html#a)
## Future start](http://infolab.stanford.edu/~backrub/google.html#a) (what an irony...).
That's how crypto-currency based microtransactions could change this:
The **User** perspective
If an app isn't for free, the browser shows an accounting widget (think about the SSL status widget).
Apps may choose to provide new users with a bit of initial credit for free (especially as long as the system isn't established and thus many may start with an empty wallet).
Accounting per site is done automatically in the background.
This widget contains a button which shows the policy / cost. The App could also provide a rough explanation for how the payments are used.
The widget should at any time show the overall balance for the app so far, the balance for the current session and/or for the last hour (?)
While in general payment is automated, the user needs to agree at certain steps, e.g.
* First time payment
* First time overall cost exceeds 0,1 USD
* First time overall cost exceeds 1 USD
* First time overall cost exceeds 10 USD
(Are 10x steps too steep?)
This is just a proposal for the default. Of course the user can configure it. The user should probably also have the option (at any step) to keep the previous increment for the next warning threshold.
Of course there can also be apps which reward the user for certain actions (e.g. for providing content or curating something or...). That should also be shown in the widget.
Actions with sharing character (e.g. retweet, upvote, ...) could be designed as sponsoring, where the acting user leaves a deposit for future users he encourages to check out something.
In order to not open a new door for advertisers that way, this could be combined with a way for this future users to punish. E.g. if they feel spammed, they could cause a larger bite from the deposit, while if they appreciate the shareable, it could have the opposite effect. This could also be seen as sharing / advertising with builtin quality control.
With such a system in place, alternative reward systems also get easy to implement.
* Donations become very easy and hassle free
* Intermediate solution between fixed price and donation. App/content provider sets initial price range and default price. User can override the default price (e.g. choose to pay more for a good newspaper article). UX for that could be very simple, e.g. just moving a slider in the accounting widget. This individual choice may also have an influence on the default price. That way the appropriate reward could be crowd determined. If tuned properly, even few active users ([as is common](https://en.wikipedia.org/wiki/Pareto_principle)) could be enough to find the "appropriate price". Non-cooperative users (always choosing the cheapest option) may be filtered out of the price forming process. If wanted, they may even be somehow blocked or punished. The system itself should make as few such philosophical choices as possible, just offer options.
Fundamental **advantages** compared to existing payment systems:
* User has no setup cost (time, cognitive effort) per App
* User can intuitively learn the cost (observing the relation between usage and reaching thresholds) by using the app instead of studying and deciding beforehand. And ... fuck the fine print!
* Negligible transaction fees
* Potentially privacy preserving
* Easier to integrate (development effort)
Much of the usage convenience would be provided by a **Wallet**, most probably a browser plugin.
The wallet automatically exchanges to/from needed coins (ideally on decentralised exchanges like [EtherEx](https://etherex.org/)
Balance and cost are shown first of all in a generic currency. Is there need for a _Metacoin_? Probably best: guess / let user configure reference currency (e.g. EUR for me), wallet does the calculation for displaying.
User can easily charge wallet, e.g. via credit card / Paypal ... whatever.
User can choose currency used by default for storing value in wallet (sane default would probably be a cryptocurrency pegged to the chosen reference currency ([Tether](https://tether.to/)).
Missing:
What kind of **identity** model is needed?
The wallet could/should probably automatically manage _sub-identities_ (e.g. account per coin).