We publish the article of Walter Isaacson, former editor-in-chief of the Time magazine and the author of The Innovators: How a Group of Hackers, Geniuses, and Geeks Created the Digital Revolution.
Micropayment systems reward abstract notions - such as creativity and exceptional content - with real money.
The success of Bitcoin, the digital crypto-currency, has resurrected the hopes for easy micropayments in buying or selling content online. Sandy Ressler has written in Bitcoin Magazine: “Using Bitcoin micropayments to allow for payment of a penny or a few cents to read articles on websites enables reasonable compensation of authors without depending totally on the advertising model.”
This system will lead to a whole new era of creativity, just like 400 years ago, when the Statute of Anne gave people who wrote books, plays or songs the right to earn a royalty for the copying of their works. An easy micropayment system will provide today’s content creators, from major media companies to amateur bloggers, with an opportunity to sell digital copies of their articles, songs, games, and other art content. Serving as the warrant of royalty, the system encourages the authors to produce unique content which will be purchased by other users, rather than wasting time collecting visits for the advertisers.
Walter writes that he advocated this position in Time cover article in 2009. He summons everyone to save journalism. He says: “The key to attracting online revenue, I think, is to come up with an iTunes-easy method of micropayment.We need something like digital coins or an E-ZPass digital wallet – a one-click system with a really simple interface that will permit impulse purchases of a newspaper, magazine, article, blog or video for a penny, nickel, dime or whatever the creator chooses to charge.”
This idea was not technically feasible back then. However, today, thanks to Bitcoin, we have services such as ChangeTip, BitWall, BitPay and Coinbase. Micropayments are really simple to perform, the software interface is extremely user-friendly, the transaction fee is minimal. Unlike clunky PayPal, these services provide great possibilities for impulse purchases and immediate transactions.
While working on the presentation of his new book The Innovators, Walter found out that most pioneers of the Web believed in enabling micropayments. In the mid-1960s, Ted Nelson coined the term hypertext and envisioned a web with two-way links, which would require the approval of the person whose page was being linked to.
Had Nelson’s system been given the green light, it would have been possible for content writers to get small payments for their work, providing journalism and blogging with entirely different development perspective. Instead of that, the Internet became a place where aggregators make more money than unique content producers.
An English computer engineer Tim Berners-Lee, who created the protocols of the Web in the early 1990s, considered including some form of rights management and payments possibilities. However, he realized that such kind of options would have required central coordination and made it hard for the Web to expand rapidly. That’s why he put this idea aside.
In 1994, when the Internet was on the rise, Walter Isaacson was the editor of new media for Time Inc. This media was paid by the dial-up online services, such as AOL and Compuserve, to supply content, market their services, and moderate their bulletin boards.
When the Internet became a viable alternative to proprietary online services, Time Inc. decided to expand and to take over control of their subscribers. Initially they planned to charge a small fee or subscription, but ad agencies were so happy with the new medium, the Internet, that they lined to buy the banner ads Time Inc. had developed for their sites. As the result, the company decided not to charge the content free, but build up audiences for advertisers.
Such kind of business model turned out to be not that rational or sustainable. It spawned virus content with the headlines specifically designed as clickbait. Instead of promoting the idea of quality content worth being paid for, the consumers were taught to believe that the content must be free. t took two decades to reverse this noxious tendency.
In the late 1990s, Berners-Lee tried to implement new web protocols that could embed on a page the information necessary to process a small payment. That would allow banks or entrepreneurs create electronic wallets and use electronic payment services. The idea was never implemented, partly due to the complex banking regulations. In 2013 Berners-Lee revived the effort. He wrote: “We are looking at micropayment protocols again. The ability to pay for a good article or song could support more people who write things or make music.”
The micropayment protocols still have not been written. But Bitcoin makes them phase out. Marc Andreessen, who as a student at the University of Illinois in 1993 created the first popular Web browser, Mosaic, and is an ardent Bitcoin supporter said: “When we started, the first thing we tried to do was enable small payments to people who posted content. But we didn’t have the resources to implement that. The credit card systems and banking system made it impossible. It was so painful to deal with those guys. It was cosmically painful.”
Nowadays Andreessen is a major investor in companies that are creating Bitcoin transaction systems. “If I had a time machine and could go back to 1993, one thing I’d do for sure would be to build in Bitcoin or some similar form of cryptocurrency.”