This is a standard crypto-hype-venture capital-DRM play. The crypto is cool, the people are the doyens of the cryptography field, and the market is open. What more perfect combination?
But, this is no new money venture. It is striking in its ignorance. Peppercoin ignores all the lessons of the past, in so complete a fashion, that one wonders what they were thinking?
It has been very clear since about the late 90's that the retail model is bankrupt. Both Paypal and e-gold - the two successful money models so far - cracked this problem in innovative ways. Yet Peppercoin decided to ignore their work and go back to the merchant-consumer model.
It's also been more or less clear that the downloaded client model is also a dead loss. I personally have been guilty of belatedly recognising that, and in the late 90s we rectified at least our understanding, if not our technology line. (The XML-X project was our answer to that.) There are ways to make the downloaded client model work, but they require integration with the application in a way that is decidedly absent in the peppercoin model.
A further delito is the micropayments trap. Simple mathematics will show that micropayments don't work. Simply take any given merchant, and calculate the most possible number of transactions, multiple by the low amount of each transaction, then work out how much revenue you got. Digital and IBM already discovered this at a cost of countless millions, and you can too, with a $5 pocket calculator.
The only thing left is that Peppercoin has some sort of secret weapon. Always possible, and always unlikely. Except them to raise another round, and then get absorbed somewhere and quietly forgotten.Posted by iang at September 24, 2003 01:08 PM