Micropayments, redux

[David Wagner]

Ed Gerck  wrote:
>For example, in reply to my constraint  #2, you say:
>
> "This is expected to be roughly counterbalanced by the
> number of unlucky users who quite (sic) "while behind"."
>
>but these events occur under different models. If there
>is no prepayment (which is my point #2) then many users
>can quit after few transactions and there is no statistical
>barrier to limit this behavior.

Yes, that's true.  Still, the loss is bounded, even if there is no
prepayment.  Suppose that each transaction is for 1cent, and we set things
up so you pay 1/100 of the time.  Then the most any given user can walk
off by quitting early is about $1.  The costs of customer acquisition
are probably far greater than $1.  For instance, many online payment
schemes were offering $10 coupons just for signing up to the system.

Remember also that this scheme requires strong is-a-person credentials,
so each person can probably pay this game at most once.  This means
there is not much incentive for anyone to bother trying to game the
system on purpose.  And, as you say, it is not hard to tweak the system
to reduce the amount the bank can lose in this way, if you care.

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