This work is licensed under a Creative Commons Attribution 3.0 License.
"Like so many in Silicon Valley in the 1990s, I thought the Web would increase business opportunities for writers and artists. Instead they have decreased. ...
"We could design information systems so that people can pay for content -- so that anyone has the chance of becoming a widely read author and yet can also be paid. ...
"Affordable turns out to be much harder than free when it comes to information technology, but we are smart enough to figure it out."
Jaron Lanier, "Pay Me for My Content" New York Times, November 20, 2007
Imagine online financial accounts that could reproduce -- creating children, grandchildren, and family trees of new financial accounts. Each one could inherit dozens, hundreds, or thousands of potential services, options, security features, and other settings and characteristics -- instantly, just by being born, with no tedious setup required. Since each owner's changes (if any) will be inherited by future generations, these accounts will evolve in everyday community use, through popular selection of the most useful accounts and services.
We have published one design on this site -- rights-free for anyone to use. Clearly some form of reproducing accounts (not necessarily ours) will have important uses in online commerce. Many new business models will become feasible, with this easy, responsive, and very flexible ways to collectively shape and share complex service environments.
Sorry, no software yet. In three years of looking we have never seen any hint of financial accounts that can reproduce. If you have, please let us know.
If a band, writer, or other artist wants to charge a low price like 25 cents per download (or per view), there's no good way to do it today. PayPal etc. cost too much for small transactions. Micropayment systems haven't worked well because of "mental transaction cost" and other reasons (for example, buyers won't sign up if 99.99% of sellers aren't there yet, and vice versa).
But suppose an artist could sell bulk, prepaid copies to sponsors (meaning anyone who wants to buy them for any reason). For example, if a song were priced at 25 cents, a sponsor might buy 100 copies for $25, or 1,000 for $250 (or less with quantity discount) -- using PayPal, or a credit card, etc. like any other ecommerce.
Sponsors will receive their prepaid copies in a smart URL, which they can partly name if they wish. This smart URL will look exactly like an ordinary Web address. But it will keep count of the downloads, and let the next 100, 1000, or whatever number of people click to download free. These free end users won't need to have any account, log in, read any instructions, or prepare in any way. Yet their click will instantly pay the artist, by the act of free downloading itself.
Smart URLs can keep track of much more than the number of prepaid copies remaining. Sponsors can add their own messages about anything, to everyone who uses a download they paid for. Sponsors may want to be recognized for their contribution; to meet people with common interests; to support the artist, the art, or the cause; to promote other causes; promote their own or other Web sites; to publish targeted ads; or simply offer greetings or encouragement to their networks. Sponsors and anyhone can share this prepaid, free access through private or other networks, or with the public at large; thanks to social networks, it will make sense to buy thousands of copies without needing to know thousands of people to give them to. All will be welcome to freely share the art they like, since sharing both promotes and pays the artists.
And anyone so inspired can pay to recharge the smart URL at any time -- instantly recharging all copies throughout the world. So these URLs need not expire but can circulate indefinitely through social networks, paying the artist as long as people care about the work. These URLs can transact business in the user's choice of any number of supported human languages -- and do much, much more.
An accidental discovery led to an idea that looks revolutionary -- allowing online financial accounts to reproduce (meaning that the owner of an account can have it create any number of new "children" accounts, which are mostly copies of its parent, and may or may not inherit some of the parent's money). The owner of the original account will own the new ones, and may give or sell them to others. Each of the new accounts can also reproduce, through any number of generations -- creating family trees of ancestor and descendant accounts.
The advantage of reproduction is that each new account can inherit dozens, hundreds, or any number of options, permissions, services, available applications, and other properties from its parent. So new accounts can be born ready to go, with any number of features already set up as desired -- to provide a template for an online business or other project, for example. A new account can reflect the knowledge and experience of many previous owners of its ancestors -- since each owner's changes are inherited by future generations, like mutations in biology.
These accounts will evolve in practical community use, toward becoming more useful and attractive to people, since the "fittest" features and environments (most valuable to the users) are most likely to reproduce and spread. Ordinary (non-reproducing) accounts cannot offer hundreds of services gracefully and cannot easily evolve -- because setting up so many options individually for a great many new accounts would be difficult.
Reproducing accounts could prove to be a natural way to use money online -- opening many doors. New business models that would be difficult today will become feasible. Independent artists, small organizations, and nonprofits could benefit most.
"Smart-accounts" is our design for financial accounts that can reproduce without limit; we believe it is the first such design. No software has yet been written. We have no proprietary claims, and these ideas are rights-free to our knowledge. A small, proof-of-principle test could be run anywhere and made available worldwide. Any number of new capabilities can be added later to existing accounts at any time, even while they are "live" in public use, so the test itself could grow into a practical system.
Musicians, writers, and other artists need better ways to earn a living from their work online. If reproducing accounts can help, this project's goals will be fulfilled.
For distributing art and other information online, smart-accounts will create special accounts that can circulate widely as "smart URLs." Anyone can click these special Web addresses for whatever access and services the account owner chooses to offer to the public (or to whatever group that has the smart URL). Each of these clickable accounts can be owned by an artist; and each account can offer downloads of (or other access to) a particular song, video, picture, poem, statement, or other art or information. URLs are easily shared by email and otherwise, through social networks or with the public at large; and these smart URLs can circulate as gifts, since they will offer free access to art or information that would otherwise cost money, thanks to sponsors who purchased prepaid downloads in bulk. Sharing this free access will usually be encouraged.
The end users will just click for a free download (if at least one is available), without ever needing to register, log in, or have any account or any money at all -- just like free downloading today. The difference here is that they will instantly pay the artists by the act of free downloading itself.
Sponsors: Anyone who can pay online can be a sponsor, at any time -- adding their sponsorship to the smart URL, which can manage many different sponsorships at once. A sponsor can buy one or a few copies (prepaid downloads) of the art or information provided by that URL -- or buy dozens, hundreds, or many thousands of prepaid downloads with a single payment (there will likely be bulk discounts to encourage large purchases). Anyone who clicks the smart URL will see both a free-download button (faded if no free copies are available), and a form for sponsoring prepaid downloads as well.
Why will anyone pay for music, etc., that others will hear? One reason is that sponsors will be able to provide their own message for delivery to anyone who uses one of the downloads they sponsored -- targeting people who like the particular song or other art, thorough the social networks of the sponsor's choice -- an audience usually reachable in no other way.
Sponsors can choose to receive a new smart URL, for distributing their prepaid copies exclusively to their own social networks -- or choose to use an existing smart URL, in order to reach the social networks where that one already circulates. (Usually sponsors will own their sponsorship, and can change their message or take back the remaining money at any time. But the artists will own the URL, and receive the revenue from all sponsorships within it. The server can enforce these ownership rights.)
The artists may have an option to decrement the count of prepaid downloads only when an end user clicks a URL in the sponsor's message -- thus selling click-throughs to the sponsors, not just views.
Sponsors can use their messages to advertise a product, support a cause the artists are raising money for, support a different cause, be recognized for their donation, promote their own project, find friends with like interests, offer humor, encouragement, or greeting, etc. And even without a message, sponsors may want to create gifts for their friends, or financially support the artists, the art, the art school or movement, or a political, social, or spiritual movement for which the artists are raising funds. (For other motives for sponsors, see list of 16 incentives for sponsors.)
If 2% of users of a smart URL choose to be sponsors and 98% pay no money but only download free, then the average sponsorship will need to be at least 50 prepaid downloads. This number should be obtainable, because:
The following apply to all or most uses of smart-accounts, not just distribution by artists:
This partial language independence could focus attention on international communication, encouraging interested people and organizations to create additions to the international alphabet of buttons, statements, etc. mentioned above, and try various creative ways of getting their meaning across to a multi-lingual audience, when machine translation is unavailable or not reliable.
The changes owners make to their accounts will be passed on to any future descendants, unless changed again -- like mutations in biology. The most useful and attractive accounts and features will tend to survive, reproduce, and spread. So these accounts will evolve through everyday use -- toward providing environments and services that people value and use.
Each company's brand of smart-account could inherit its own collection of dozens or hundreds of software capabilities, options, and permissions. For example, accounts can inherit services to:
Account evolution can also include entirely new services, added by installing software at the account server -- even to accounts that are already in public use. Existing accounts will receive these new services in their "off" condition, to avoid disrupting existing users, while giving them access to the new features if and when they want them. So public demand can drive the evolution of new options unimagined when the accounts were first released.
This effortless inheritance and grassroots, practical evolution will encourage the development and sharing of any degree of internal sophistication in customized, easy-to-use accounts. Owners will give colleagues access to an environment and package of capabilities just by giving them an account. The new owner can change the account name to assure exclusive possession, and of course can change the options and services -- and then use that account to start a new business or other project, perhaps similar to one that somebody else ran successfully using an ancestor account.
Letting anyone create multitudes of financial accounts, each with a mind of its own, will open doors to many new opportunities -- and to potential problems as well.
Reproducing accounts can support unusual security options, recasting the tradeoffs between convenience and security. Examples include one-time use after which the account vanishes and returns any remaining money according to prior arrangements; easy PIN by telephone or other different communication channel, for high-security transactions; an irrevocable list of allowed payees; an optional but absolute inability to pay money to a third parties in any circumstances; and of course the easy creation of many temporary accounts with small values, reducing security needs by limiting both the risk and loss of theft.
Such options will help especially for small transactions, where convenience is king. For example, a public account costing thousands of dollars (and holding thousands of copies of the same download, for example) can be sent freely as a smart URL by insecure email, or even published for anyone to click and use, with no need for encryption or other hassles. All a malicious user could get from it would be thousands of identical copies of the same file -- and even doing that could be made inconvenient.
Suppose criminals set up a fraudulent account that says it supports the artist, but actually just grabs the money? It would have a hard time getting users, since artists who use this system will tell their customers what server to use, and that server will close fraudulent accounts as quickly as they are discovered (and it will not be hard to tell, if that account claims to be collecting money for a known party that says it is not theirs). It will be elementary that one does not use a smart-account name or smart URL from spam or other untrusted email. And only the 2% or so of users who are sponsors will be paying any money -- and they can be especially careful to only pay the legitimate account used and recommended by the artists.
Regarding another kind of transaction, how does one smart-account pay money to another, when the names of both accounts are secret and cannot be revealed -- and there may be no secure communication between the two parties? (The two accounts must either be on the same server, or on servers with a mutual agreement to hand over each other's transactions for processing, and with secure communication with each other.)
In this case the payee must have created a public account, to receive any payments at all; this account can be published, and anyone can pay into it. The payer could then use his or her account's control center (always accessed through SSL or other secure communication) to create a new account for this payment only. This account could be created with one or more of the following irrevocable restrictions. It could only pay once, and then close permanently, or disappear. It could only pay that particular public account (or return money to the payer's account that created it), and could never pay money to anyone else. It could expire after ten minutes or whatever, returning the money to the payer. Or for large amounts, it could only pay on receipt of a code, which the payer could send to the payee through a separate channel, such as a phone call (since it is usually much harder to intercept two communication channels than just one).
Smart-accounts can run entirely on the server, without installing any software on users' computer -- greatly reducing the risk of malware. And any malicious servers that do try to install malware will find few users, as they will not be recommended -- or allowed into trusted compatibility groups, making their accounts unable to work with other smart-account systems.
And once this system grows beyond a test phase and handles substantial amounts of money, the servers will run in financial institutions with their usual controls. Hopefully they will never run operating software received through the Internet -- reducing the risk of compromise. Software might be developed remotely on test systems, but then will be audited and installed onsite by trusted personnel.
Even if criminals somehow stole an entire smart-accounts database and the software to run it on their own, they might still not be able to get any money out. For the server will not have the real account names; instead it will have hash codes that the account names encrypt into. These codes will be worthless for persuading the real server to release any money.
Vigilance will always be necessary, but this technology seems to favor the defense.
We moved this section to the Appendix. It includes the following topic headings (briefly summarized here in parentheses):
* By default, the account name is also the password (like a numbered bank account);
* Account-name formats (e.g. 'name' in a smart URL, www.the-smart-accounts-server.com/name);
* The control center (every account has one -- though most users will never see it);
* Public accounts (they need not be kept secret but can be published, generally as smart URLs);
* Security and convenience (including unusual security options);
* Compatibility with all computers (runs entirely on the server);
* What if an account gets lost? (owners can set up retrieval options in advance);
* Avoiding DRM (pirate copies must compete with free copies that do pay the artists);
* Freeloaders? (we welcome them -- and for distributing art and information, expect about 98% of all users to pay nothing -- supported by sponsors who want to get their message out, help the artists, support a cause, or create gifts for friends, among other incentives).
Assume that smart-account services are available, and a band wants to sell a song this way. Here is how the process might work.
[We moved this section to the Appendix. It's divided into 7 steps: from opening one's first account (which takes about one minute); to distributing music throughout the world and getting paid by about 2% of the end users, to clicking a button to have the account mail a check.]
And if anyone is developing the software, they are probably in "stealth mode" now, so the public would not know about the project.
In addition, this writer is better at designing logical systems than at promoting them -- and has avoided corporations, in order to get these ideas into public discussion rights-free. So if you think the approach is promising, you can still get in on the ground floor.
While small business instinctively supports freedom (because it can be threatened by government), big business does not (because increasingly it is government). We live under government of the persons, by the persons, and for the persons -- where the "persons" that count are corporations.
But online accounts could still test radical financial transparency -- the extreme opposite of anonymity, making everyone's financial transactions and other information open to anyone in the world. This will deny government exclusive access, when refusing access is not an option -- and encourage the development of life strategies that do not rely on secrecy, which is less and less available. Few would use a transparent financial system for all purposes (although some have put 24-hour-a-day video of their bedroom online for any and all to view). Popular systems like Del.icio.us let users publish their bookmarks (favorites); and millions list favorite music, movies, and books in their profiles. Many might use open financial accounts for the same reason: to find others with common interests. The key to acceptability is that the choice be truly voluntary.
We suspect that poverty continues because it is created. Money was never intended to work for everyone. It requires billions of losers in order to maximally elevate the winners.
So while public policy sincerely tries to create prosperity (mostly for those already prosperous), it also creates poverty. One clear example is the traditional remedy for inflation: deliberately causing unemployment so that workers will be desperate and work for less -- resulting in greater inequality. Another example: cities measure the progress of neighborhoods by how much the housing costs, and do what they can to increase prices and rents, causing hardship for millions. But probably the most important creator of poverty is wars -- which, like the other causes of poverty, typically result from destructive competition for status. And it doesn't help that existing financial systems have become infested with predation, inefficiency, and corruption. The average interest you get on savings, money-management accounts, or CDs, vs. the interest you pay on credit cards, roughly estimates the high take of profiteering, waste, and fraud.
Money legitimately exists to establish certain cooperation between multitudes of strangers in very different places, times, circumstances, mind spaces, and value structures. For example, if you travel by plane or vehicle, or buy almost any modern product, thousands of not millions have cooperated to make that possible -- some voluntarily and with dignity, some not -- if you count the miners, transport and factory workers for all the mechanical parts, etc. And thousands of killings and other crimes contributed to your purchase as well. (Note that in traditional Christian imagery at least, Satan often has access to big money, while Jesus never does.)
A better understanding of just how institutions create and assure poverty could help identify ways to intervene -- for example, to strengthen human systems and activities that do not require poverty. These may include hospitality, friendship, community living, some religious or nonprofit activities, peer support, good networking practices, other personal and community disciplines for getting things done, and many tools for empowering cooperation. If it is true that poverty is created by the money system itself and maintained by the authorities, and that this problem has been largely ignored and not researched, then low-hanging fruit should be available.
Could such activities ever replace money entirely? Probably not. So it is important to improve money for its legitimate uses in establishing cooperation through exchange.
We have outlined how online financial accounts that can reproduce could help, especially for artists and others who produce digital information that people want (because it can be part of the living cultures by which human societies operate and develop). Easy, productive empowerment of sponsors (who used to be called "patrons" of the arts) will let artists get paid while all can participate -- whether or not they can feasibly pay online.
A good place to start for background research is an August 2007 entry in Michael Altendorf's blog, http://michaelaltendorf.wordpress.com/2007/08/21/future-of-money/.
Note the separate section on the very popular "QQ Coins" online money used in China. An estimated 100 million or more people are using this virtual currency (maybe fewer today, as the government discourages it, fearing that it might become popular enough to affect the economy by increasing the total amount of money in circulation). QQ Coins, started by Tencent, the company that runs China's largest instant-message service, were also used when other money was not available due to a break in an undersea cable caused by an earthquake. The same QQ Coins are also used in South Africa, despite the fact that the service is strongly Chinese-language oriented.
Smart-accounts are not online money, however, only a means of exchange. QQ Coins have their own traders and market value (which has gone up since the Chinese government restricted supply); smart-accounts never will, because they only keep track of transactions in existing currencies. Tencent seems happy to accept the government's wishes that it not exchange QQ Coins back into the official currency, the yuan. We included the QQ Coins example here to show that innovations in online money can become very popular.
Last year we put together a different list of Related Links, focusing more on classic though recent references on money, rather than on news.
Our previous writeups list at least 15 potential uses for reproducing accounts. (Sponsored free distribution by artists is only one; charging for receipt of one's own email to control spam is another. Other potential uses are very different, including paperless admission to movies or other events -- or creating digital collectables, to assist fundraising by turning an early donation to an important organization into a personal investment as well.) The earlier writeups also explain more details on the smart-accounts design. But note that some of them used terminology differently, and the earliest ones described a much more limited design: a tool for publishers to sell online content in bulk, but not a general system of commerce. Until we rewrite the information in a more organized way, here are places to start:
Or contact John S James, jj (at) smart-accounts (dot) org.
This work is licensed under a
Creative Commons Attribution 3.0 License.
We have no patent or other proprietary claims to the ideas discussed here.