March 19, 2004

"Micropayments for Peer-to-Peer Systems"

"Emerging economic P2P applications share the common need for an efficient, secure payment mechanism. In this paper, we present PPay, a micropayment system that exploits unique characteristics of P2P systems to maximize efficiency while maintaining security properties. We show how the basic PPay protocol far out performs existing micropayment schemes, while guaranteeing that all coin fraud is detectable, traceable and unprofitable. We also present and analyze several extensions to PPay that further improve efficiency."

I wouldn't normally bother with a micropayments scheme, as the economics are generally woeful. This design would be in the same basket of microeggs ("even if they hatch, they ain't worth counting") as it has a fairly impractical hack in it to achieve scaleability where other micropayment schemes allegedly fall short (!!).

Ricardo does much better, as it scales down to all known applications, as well as up. But, there is one aspect in there that Ricardo afficionados will recognise, and, dare I say it, drool over, so I'm adding FTR ("for the record").

Posted by iang at March 19, 2004 07:02 AM | TrackBack

What is this aspect? I guess this means I'm not a Ricardo afficiando. Anyway, I wonder if Ricardo would scale down to the p2p packets that PPay (and Mojo Nation, and Digital Silk Road) were about.

Posted by: Zooko at March 19, 2004 09:54 AM

The aspect is the p2p issuance. Ricardo scales down to a tenth or a hundredth of a penny, happily, and has done so from time to time. The main difficulty is that there isn't really an economic case for a payment as small as a hundredth of a penny. Consider - someone or some thing has to make a thousand of them, just to send a buck. And, that's without considering profits!

I wish I knew more about Mojo Nation ...

Posted by: Iang at March 19, 2004 07:31 PM