28 Feb 2010
The Future of Money

I have a bit of experience in this arena, and I can tell you right now, these folks only have half the equation. Take a look at the conversion chart with it's multiplicity of online "currencies" and ask yourself how conversions between them, much less handling processing of payments, can ever possibly be free...

The short answer is they can't. The real answer is another question: free to whom?

A generation ago, when people made the choice to switch to plastic, credit cards did not just replicate cash; they fundamentally changed how we used money. The ease with which people could make purchases encouraged them to buy much more than they had in the past. Entrepreneurs suddenly had access to easy — though high-interest — loans, providing a spark to the economy. Now, while it may be hard to predict what innovations PayPal’s platform will enable, it’s safe to say that the payment industry is going to change dramatically. As money becomes completely digitized, infinitely transferable, and friction-free, it will again revolutionize how we think about our economy.

(link) [Wired]

12:20 /Technology | 1 comment | permanent link

07 Aug 2005
Top Ten Dot-Com Flops

Curious, indeed, how the more things change, the more they remain the same. I'm now involved in grocery delivery, of a sort, although mine isn't really web driven. The number one flop was Webvan - online grocery ordering and deliveries.

It gets better: I lost a pile of money in 1998-99 on a sort of Internet currency I called iStamps - similar in a lot of way to Flop Number 4, Flooz. The iStamps business plan , websites and logo are still for sale, if anyone's interested... it was the best of times, it was the worst of times.

The most astounding thing about the dot-com boom was the obscene amount of money that was spent. Zealous venture capitalists fell over themselves to invest millions in Internet start-ups; dot-coms blew millions on spectacular marketing campaigns; new college graduates became instant millionaires (albeit on paper) and rushed out to spend it; and companies with unproven business models executed massive IPOs with sky-high stock prices. Of course, we all know what eventually happened to this world. Few of these companies actually made enough money to recoup that cash, and when their investors fled to the hills, these start-ups died dramatic deaths. These are the celebrity victims of the new-economy bust.

(link) [CNet]

00:00 /Technology | 0 comments | permanent link

20 Feb 2003
Probability-Based Micropayments

Ron Rivest Suggests Probability-Based Micropayments [Slashdot]

Ya gotta respect a name like Ron Rivest, but, well, I have some experience in the micropayments arena, and I'd be willing to bet that this particular scheme will never fly. And it has nothing to do with the technology either....

I am sure that Peppercoin could prove, mathmatically, that the sytem would level itself out over time for any particular merchant or consumer. I am equally sure that Peppercoin must have (or thinks it has) some ace up it's sleeve to get the credit card processors to do their own micropayments without breaking them on transaction fees. If they don't, and are planning to hold an account, like PayPal (or my own, personal dot-bomb that we called iStamps) then the patent won't hold water, cause there's plenty of prior art (mine included). They'll also discover, like PayPal has and I did, about banking regulations. It ain't pretty .... And if the ace is simply holding an account until it reaches an acceptable limit for a debit, they'll discover all kinds of minute losses as people use the service once or twice, then lose (or change) their credit card. That could potentially be even uglier than holding an account, especially from an investors point of view.

No, the obstacles to this system will be social, not technological. Try explaining a random distribution curve to a mom and pop gas station owner - "Whaddya mean I get a 'null token' - that kid just left with a candy bar! I'm callin' my lawyer ...."

Good luck, Ron!

00:00 /Technology | 0 comments | permanent link