Responding just because it's a pet peeve of mine: Cixin Liu did not invent the dark forest hypothesis. People were discussing it, and writing science fiction books about it, for decades before the 3BP books were published. Nothing against him, and he definitely helped popularize the concept, but I think it's incorrect to refer to it as "Cixin Liu's hypothesis".
Was curious as a lover of the 3BP series, google gave me this:
"We've been sitting in our tree chirping like foolish birds for over a century now, wondering why no other birds answered. The galactic skies are full of hawks, that's why." (The Forge of God, Legend edition, 1989, pg 315).
The Forge of God and its sequel, Anvil of the Stars, are amazing books for anyone interested in the dark forest theory, by the way. A bit slow and contemplative, so you have to be in the right mood, but they're one of my favorite reads of the last few years.
I think there's a passage that even uses an analogy of a forest, though I'm not sure.
Just like Amerigo Vespucci put the name "America" on a map and people starting referring to the New World as such, although he didn't discover it himself.
> I feel the more of these services come to being, the more likely it is that every website starts putting up gates to keep the bots away
That's why we need microtransactions, because I'd rather be able to have both nice AI services and useful data repositories that they pull from, than have to choose just one. (and that one would be AI services, because you can't stop all the scrapers, so data sources will just keep tightening their restrictions)
All financial transactions have a fraud risk. Microtransactions are no different. But any microtransaction system faces a choice: continually pop up payment confirmations (unusably annoying), or automatically accept charges (vulnerable to fraud).
Click fraud on adverts is a form of microfraud, and pay-per-click is the existing form of microtransaction.
There's zero evidence that this exists, if only because there's very few examples of working microtransactions systems at all. Adverts are not micro transactions. (I don't care how you want to use that word - nobody else uses it like that)
But, all of the systems that I've seen (Blendle, video games) have had no problem at all with fraud, and a very small amount of annoyance to value delivered.
There's simply no reason to believe that this will be a problem, either empirically or theoretically.
"I'm going to build a system for transferring money, and I am confident that nobody will ever try to defraud it" -- someone who is about to lose all their money
- pay before viewing: how do you know that the thing you're paying for is the thing that you're expecting? What if it's a rickroll or goatse?
- so do you give refunds a la steam?
- pay and adverts: double-dipping is very annoying
- pay and adverts: how do you know who you're paying? A page appears with a micropayment request, but how do you know you've not just paid the advertiser to view their ad?
- pay and frame: can you have multiple payees per displayed page? (this has good and bad ideas)
- pay and popups: it's going to be like those notification or app install modals, yet another annoyance for people to bounce off
- pay limits: contactless has a £30 limit here. Would you have the same payment system suitable for $.01 payments and $1000 payments? How easy is it to trick people into paying over the odds (see refunds)?
- pay and censors: who's excluded from the payment system? Why?
> If it was that easy, it would have been done.
Part 2: business model problems!
- getting money into the system is plagued by usual fraud problems of card TX for pure digital goods
- nobody wants to build a federated system; everyone wants to build a Play/Apple/Steam store where they take 30%
- winner-take-all effects are strong
- Play store et al already exist, why not use that?
- Free substitute goods are just a click away
- Consumers will pirate anything no matter how cheap the original is
- No real consumer demand for micropayments
=> lemma from previous 3 items: market for online goods is efficient enough to drive all marginal prices to zero
- existing problem of the play store letting your kid spend all the money
- friction: it would be great if you didn't have to repeatedly approve things, such as a micropayment for every page of a webcomic archive. But blanket approval lets bad actors drain the jar or inattentive users waste it and then feel conned
- first most obvious model for making this work is porn, which is inevitably blacklisted by the payment processors, has a worse environment for fraud/chargebacks, and is toxic to VCs (see Patreon and even Craigslist)
- Internet has actually killed previously working micro-ish payment systems such as Minitel, paid ringtones (anyone remember the dark era of Crazy Frog?); surviving ones like premium SMS and phone have a scammy, seedy feel.
- accounting requirements: do you have to pay VAT on that micropayment? do you have to declare it? Is it a federal offence to sell something to an Iranian or North Korean for one cent?
> "I'm going to build a system for transferring money, and I am confident that nobody will ever try to defraud it" -- someone who is about to lose all their money
You seem to have conjured the impression that micropayment systems have to be radically different than current payment models, which is wildly mistaken.
You can build an effective micropayment system using only currently available tools (digital wallets, microcurrencies, digital storefronts, review systems) that have most/all of the nice properties of existing platforms, which invalidates almost every single point you make.
Few of these points seem very well thought-out - they're mostly relatively easily refuted by using logic and/or pointing to what the industry is already doing.
> pay before viewing: how do you know that the thing you're paying for is the thing that you're expecting?
In the exact same way as current digital storefronts.
> How easy is it to trick people into paying over the odds
What are "the odds"? Are we betting now?
> so do you give refunds a la steam?
Yes, exactly like current digital storefronts.
> - pay and adverts: double-dipping is very annoying
Exactly like current digital platforms (e.g. Spotify, YouTube premium).
> - pay and adverts: how do you know who you're paying?
What does this even mean - how do "adverts" factor in to "how do you know who you're paying"??
> pay and frame: can you have multiple payees per displayed page?
What does this mean??
> - pay and popups: it's going to be like those notification or app install modals, yet another annoyance for people to bounce off
A theory that is trivially dispelled by empirical evidence of the tens of billions of dollars in microtransactions that US players spend on free-to-play games. You create a microtransaction wallet currency that is roughly equivalent to normal money, and then you pay for things by clicking on them, like in a normal game with microtransactions. Empirically, people get used to this very quickly and the friction becomes unnoticeable.
> - pay limits: contactless has a £30 limit here
What does any of this have to do with contactless payments???
> Would you have the same payment system suitable for $.01 payments and $1000 payments?
It's pretty easy with a few seconds of thought to think of systems that handle both of those cases well. For instance, you can make it so you have to hold down a button to purchase something with your microcurrency, with the duration of the hold (nonlinearly) proportional to the cost of the item.
> - pay and censors: who's excluded from the payment system? Why?
Exactly the same as current platforms - the platforms/wallet providers determine that.
>> If it was that easy, it would have been done.
Objectively false. There are many good ideas that have failed because of market factors or poor marketing. In this case, the prevalence of ads, and people's generosity at a time before scraping has truly taken off, is subsidizing the market. The generosity will decrease and doesn't scale, and I shouldn't have to point out the problems with ads.
> - getting money into the system is plagued by usual fraud problems of card TX for pure digital goods
So you handle that exactly the same way as current platforms - you use a payment processor.
> - nobody wants to build a federated system; everyone wants to build a Play/Apple/Steam store where they take 30%
I have to pay 30% already. I'd rather pay directly than with my eyeballs and brain (through ads). This is a problem, but it's better to implement a solution, and then lobby for regulation requiring an open, interoperable payment protocol.
> - winner-take-all effects are strong
Sure? We have the same problem for ads and platforms currently.
> - Play store et al already exist, why not use that?
This was already answered by vlehto in a response[1] to your comment you linked above, which you conveniently left out here. I'll quote:
> Play store does not have the content I want. And it seems overly difficult to post the content I want to make. And if I want to pay for engagement with the content, that's not an option.
> Patreon is lot closer to what suits my needs. But even that is too inflexible on how to use payments and to what you should pay. So far everybody seems to be making their micro-transaction payment models "flexible" by making the amount paid flexible. But that's exactly the one thing I want to be fixed. I'd like to host my entirely own webpage and patreon just to handle the money from exactly the kind of transaction I want.
Patreon is obviously not a micropayment platform and grossly inadequate for, well, almost anything - it's run by bad people who take large cuts and screw over creators, the friction to use it is incredibly high, and the payment model (subscriptions) does not scale well and isn't fair to smaller creators.
> - Free substitute goods are just a click away
...and yet, somehow people still pay for things online. This is quite the non-argument.
> - Consumers will pirate anything no matter how cheap the original is
Piracy is obviously evil and I'm doing my best to fight it. But this isn't an argument. In fact, the commonly-touted line "piracy is a service problem" logically implies that low-friction micropayments will make piracy less prevalent, not more.
> - No real consumer demand for micropayments
See above points about the market being subsidized by ads.
> => lemma from previous 3 items: market for online goods is efficient enough to drive all marginal prices to zero
...and yet people still pay money for things.
> - existing problem of the play store letting your kid spend all the money
This has nothing to do with microtransactions at all. This is just a platform permissions problem.
> - friction: it would be great if you didn't have to repeatedly approve things, such as a micropayment for every page of a webcomic archive. But blanket approval lets bad actors drain the jar or inattentive users waste it and then feel conned
It's trivial for someone to break up their webcomic into chapters and have users pay for the bundle. If a particular comic creator doesn't, then they'll very quickly implement that as their readers get incredibly annoyed and leave. And the vast majority of comic creators will use an existing platform to host instead of rolling the microtransaction system themselves. As for being conned? We handle that in exactly the same way as current digital storefronts.
> - first most obvious model for making this work is porn
And? I don't see how this is relevant.
> - Internet has actually killed previously working micro-ish payment systems
See above points about the market being subsidized by ads, systems being launched before their time, etc.
> surviving ones like premium SMS and phone have a scammy, seedy feel
That's purely a function of those things, and is not intrinsic to microtransactions, as evidenced by F2P games.
> - accounting requirements: do you have to pay VAT on that micropayment? do you have to declare it? Is it a federal offence to sell something to an Iranian or North Korean for one cent?
We handle this in exactly the same way as current platforms/payment processors.
> You seem to have conjured the impression that micropayment systems have to be radically different than current payment models, which is wildly mistaken.
His claim is that the existing system has fraud, therefore micro-transactions will have analogous thing he named "micro-fraud" — so you agree with him now?
As a Harper's and Lapham's Quarterly subscriber, I have been a huge fan of his quirky editorial style.
Specifically, I'd like to call out his podcast ("The World In Time"). Its past episodes remain treasure troves of wisdom, with LL's resonant voice asking the kind of engaging questions that are a rarity these days. Highly recommended.
> in Oshiro, i had met a guardian of time, a man who, year after year, preserved a slice of japan's essence, ensuring that even in the heart of its busiest city, the song of the bush warbler would never fade away.
There was a lump in my throat as I read your comment out loud to my wife. Thank you for sharing this beautiful vignette!
Of course, that's far from saying that they're the worst, or even headed that way. Just not the best (those would be a couple of fully opensource models, including those of the Instructor family, which we use at my workplace).
A few months ago, I wrote a post [0] talking about my experiences designing and building an ML-powered stock picking engine for my startup - the post went viral on HN, and it led to many fascinating conversations, valuable connections, opportunities to speak, and job offers (tech/ML, tradfi, and crypto). In fact, it quite directly led to my new job, as a team reached out with an opportunity that ticked off all the boxes I was looking for.
Finally, thanks to my blog, I have made many new friends who I hope to engage with productively[1] going forward, and I feel more firmly embedded in the intellectual milieu of the Bay Area than I ever did. As a consequence, I am much more relaxed now and feel in control of the overall direction of my life.
