Smart-Accounts: Paying Artists Online (archived)

Note: We extracted this text (with minor changes) from our previous Drupal website, which was published in July 2008 and is now closed.

Smart-Accounts 1-Page Summary

Online financial accounts that could reproduce (creating "children" which are accounts that can also reproduce, giving birth to grandchildren and family trees of related accounts) could inherit hundreds of customized settings, services, permissions and automatic actions created by many different owners of ancestor accounts -- instantly, just by being born. "Public accounts" with limited privileges can circulate through social networks, supporting mass sponsorship of art and other online content -- and allowing anyone to just click to download free (no registration required), immediately paying the artists from the sponsorships, by the act of free downloading itself. We have no proprietary claims, so anyone is free to use our work for commercial purposes or otherwise. We want to show what you can do with reproducing accounts, to bring this unexpected but amazing opportunity to public attention and use.

These "Smart-Accounts" will evolve through grassroots, everyday use, since each owner's changes will be inherited through future generations, like mutations; and the most popular accounts will tend to have the most offspring. These automatic accounts will make transactions easier, reduce personal hassles, and support new business and fundraising models, including mass sponsorship of online content. This site explains how.

The idea of online accounts that can reproduce when their owner wants may be entirely new. To our knowledge, no such account has ever existed in human history. We show how reproducing accounts could support a financial system more flexible, efficient, secure, transparent, international, and user-friendly than the one we have. It will be easy to test. It could work well even with only a single user, so it does not need to wait for a network effect or critical mass. This is because almost all end users of Smart-Accounts will never need to register, log in, have any account, have any money, learn any new procedure, or even know that this system exists.

For more information see the Design and Examples sections in the main menu (on top of every page).

Note:

"Smart-Accounts" refers to our particular design for reproducing accounts. There could be other designs. Smart-Accounts is not an alternative currency. It could work with any kind of money: mainstream, alternative, or none at all. These accounts will give end users and communities more control over their money and their destiny. At least for now, you can comment without needing to register or log on. Comments are moderated to prevent spam. All of our work on this project is rights-free. For us, developing online accounts that can reproduce, inherit, and evolve is a mission, not a business.

Our goal with this technology is to help independent artists get paid for online work. There is plenty of money in existence even today, and many people want to support art and artists. The key issue is workable social contexts and rituals for making the exchange. Sending a check may not cut it. We show how anybody inclined will be able to support whatever work they choose, any time they are inclined, in any amount, using standard ecommerce -- while sending their own message (about anything) to uniquely targeted groups of their choice, creating gifts for their friends to use and to share -- and restoring free online access to the art if necessary, instantly all over the world.

You could help on this project. If you know people who might be interested, let them know about www.Smart-Accounts.org.

Smart-Accounts Design

1. Reproducing Accounts

Many software systems have a "control panel" or "dashboard" where the user can change management settings. Each smart-account will have a control panel as well. The owner can optionally change account services, settings, and other characteristics that can be inherited (and a few that cannot be inherited, as well).

Online accounts already have simple control centers, often indicated by names like "My Account" or "Account Settings." Reproducing accounts will make it feasible to extend the control panel from the account itself to arbitrary services that provide whatever people want. And these services can integrate the handling of money into their fundamental design -- allowing new business models such as those involving many small transactions that can take place without any human awareness, while remaining within the envelope of restrictions set by each party.

Reproducing accounts will also include additional services in the control panel, so that the owner (or anyone who has owner's access) can have that account produce another, offspring account, which is mostly a copy of its parent. The parent account can produce any practical number of children in one operation -- and each of them can reproduce in turn, through any number of generations. The number of descendents from one account will be limited only by human needs and convenience - plus a small charge by the server to prevent account owners from creating millions of accounts and wasting system resources. For example, charging just a penny for each new account created would mean that anyone who wanted to create a million accounts would first need to have $10,000 in the parent to pay for them -- discouraging extreme excess.

Each child account will inherit most of its parent's characteristics. For example, if the parent is selling downloads of a certain song, the child account will by default be selling the same song, for the same price, using the same descriptive or promotional material, with the same type style, color design, and free-sample policies (the owner of the offspring account can change these at any time, but seldom will need to). The new account may start with zero money -- or it may inherit some from the parent. The owner of an account can mark certain information as private, so that it will not be copied to any child account.

Each account will have its own separate record in a database maintained on the server that manages the accounts. All the settings and other information about the account will be stored in that record. (This is a simplified picture for explaining how reproducing accounts work. The actual database internals will be more complex.)

Incidentally, it will be relatively easy to write the software required for a useful proof-of-principle demonstration, for two reasons. First, what seems to be the most complicated part of the system (accounts reproducing) is basically something simple (making a copy of a record). Second, all the software required can run on the server -- avoiding the need to write, maintain, or distribute any software for each of the various browsers or operating systems. (Later, some browser utilities may be convenient - but this can wait until after the basic design has proved its usefulness.)

Writing production systems will be more difficult, simply because of the great importance of reliability and security in any financial software. But much of this work can also wait until after proof of principle. In fact, reproducing accounts have quite a few non-financial uses; that is, the accounts never hold any money at all. In the real world it might be easier to test and debug the software on useful tasks that do not involve money.

2. Smart-Accounts

The general idea of accounts that can reproduce could be reduced to practice in various different ways. We have used the name "Smart-Accounts" to refer to our particular design for reproducing accounts. Others could make different choices and create different designs.

3. No Separate Password

We decided not use the conventional username/password for online accounts, but instead use a system like the well known numbered Swiss bank accounts (which still exist but are no longer anonymous). Numbered accounts do not need a separate password (although one could be used for additional security). Instead, the account name is kept secret, and is itself the password. (A number can serve as a name if the owner wants -- handy for international use, and for telephone entry - but these secret Smart-Account names can use text as well.)

We chose this approach because with reproducing accounts, a typical individual might have dozens or even hundreds of different accounts in the course of a year. New ones can be born for all sorts of reason; and accounts can self-destruct (and automatically return any remaining money) for many different reasons as well. Managing passwords for many high-turnover accounts would be messy.

Also, we want to support an online-payment process that is even easier than using a credit or debit card or PayPal. Online bank-card forms require several separate fields (name, card number, expiration date, billing address, and often a security code), and customers frequently make mistakes and get frustrated when they have to re-enter information. Having only one field (the account name), which can be pasted or otherwise entered from the browser or other software, makes it easier for the customer.

Also, a single field may be more convenient for setting up fully automatic transactions - which conduct business and make binding commitments without the owner's specific knowledge, but following his or her general instructions. For example, if an account owner is browsing archives of publications that are not all free, the owner might tell the account to pay up to 50 cents for any text the owner personally requests, while limiting expenses to, say, $30 an hour (50 cents a minute), without bothering the owner for many of the small decisions. The owner will be notified of any attempted charge that does not fit into these instructions, and have a chance to accept or reject it.

Mathematically it is easy to produce a single random-number name long enough to be more resistant to brute-force guessing than a credit card with all its separate fields. In practice, separate passwords and other fields can increase security somewhat, simply because they can be stored in different places (provided that customers do so). In the Security section on this site we will show how reproducing accounts allow entirely new security options, which we think will more than make up for not always having a separate password (the owner can request additional password protection for any account, for example one with a large amount of money in it).

4. Public Accounts (Smart URLs)

A bigger problem with the numbered-bank-account name-only type system is that the account name cannot be given out to a third party in the course of business. (Every check, for example, has its account number printed on the face of the check for anyone to read, while a password or other information not printed on the check is required to take money out.) Here again, reproducing accounts offer powerful new options.

A reproducing account could allow its owner to request a special kind of offspring that we call a "public account." Its defining characteristic is that while is can accept money, it can never give any money out -- a restriction enforced by the server for the life of that account.

The public account will usually take the form of a clickable URL (Web address) -- and for convenience, be published or otherwise shared that way. When clicked it can deliver valuable goods or services (such as music downloads) under certain circumstances, but not money.

In our design, a public account has a minimal control panel that includes only those changes that the public (meaning anyone who has a copy of the URL, which could include anyone at all if the account is widely published) is allowed to make. For example, consider a public account that is selling sponsorships (purchases of bulk, prepaid downloads of a song or other "content" (for details, see the Examples section on this site). Anyone with a bankcard can add more prepaid download by purchasing them in bulk-- and anyone can download a prepaid copy of the art for free, provided that the account (URL) has one or more prepaid copies available at that time.

In addition, the sponsor can optionally send a message to everyone who uses one of the prepaid downloads he or she purchased - and the public account (which we call a "smart URL") handles this too. These messages will target people who like a particular song or other art, and are reached through social networks the sponsor can choose.

In fact, the same smart URL can keep track of any number of different sponsorships, each by different parties with different messages of course. The smart URL can manage competition between different potential sponsors, who can outbid each other to get their own messages out to selected audiences first - probably greatly increasing the income of the artists who own the song, video, etc. being distributed in this free but sponsored way - or of the cause to which they contributed the work as a charitable benefit.

5. Smart-Account Names

In theory an account name could be almost any string of characters. But there are advantages in requiring that names could be part of a URL (in English, for example, the characters users can choose will be 0-9 a-z A-Z and "$-_.+!*'(),). Servers using a different alphabet (such as Chinese) might also want to limit names according to the URLs used locally.

We believe that account names should NOT be case-sensitive. (Many programmers disagree, judging by all the software than encourages or even requires both upper and lower case in passwords. Mathematically, including one extra character will make up for about five positions having an arbitrary capitalization to remember (in terms of making the password or account name hard to guess). It is easier for the human mind to handle the extra letter or number than the five capitalization decisions -- whether in remembering the name, typing it in, writing it down, or giving it to someone else over a telephone voice connection, for example.)

Account names can also be all-numeric, with obvious advantages for telephone or international use.

Owners creating a new account can either choose a name for it, or have the server suggest a name, probably in the form of a random number. A 12-digit random number would allow a million different accounts to be given out, with the chance of a guess reaching any them being less than one in a million; and obviously the server will not let anyone try hundreds of thousands of guesses. So we suggest 12 random digits as a default account-name length, when the name is created by the server. (Remember from the Design section that a smart-account name is often kept secret, since the name itself is the password.) Of course any name for a new account must be unique; it cannot already be in use on the same server.

A user who selects a name takes responsibility for it being too easy to guess. But for public accounts and some other cases as well, the name should be easy to remember and use, not hard to guess.

6. How Are Account Names Used?

There are basically two ways account names will be entered into this system. One way is to visit the server (www.server.com, where 'server' is replaced by the real address), and type, paste, or otherwise have a program enter the account name into a box in a Web form, for secure communication by SSL or whatever with the server; the owner (or anyone else with the name) will reach the account's control center.

The other way (generally used for public accounts) is to click on a URL that includes the name. Both ways can have the same result; the URL is more convenient, but much less secure (unless VPN or other separate security is provided). But for the public accounts, security will have little or no importance; and convenience will be critical, as sponsors or end users can simply click the URL to obtain services.

7. Every Smart-Account Has a Control Center

The control center is where the account owner can change the various options of the account -- or have it perform other services such as generating a new, child account. Usually the owner will reach the control center by visiting https://www.server.com, and entering the account name into the box provided.

Control centers are handled differently for public accounts. Typically an end user will click on the URL which corresponds to the account name to reach a very minimal control center, with services like getting a free download of a song, etc. if available, or sponsoring more free downloads and optionally providing a message (always available), or seeing how many free downloads are currently left (available if the artists who are selling their work want it to be).

8. Examples of Smart-Account Formats:

a. A new smart-account name generated by the server:
www.server.com/896342985853

This smart-account name happens to be all numeric (technically the name is only the number part, though for convenience one can think of the whole URL as being the account name. This account, which usually starts with zero financial value, could either have come directly from the server, or from a friendly person or organization who had used Smart-Accounts for a similar purpose, and had asked the server to generate a copy of one of that organization's accounts with specified personal information removed. In the latter case, the person receiving the account should ask the control center to generate a new account name (with all through the secure connection of course), to assure exclusive possession.

b. Smart-account name chosen by a band to sell a particular song:
www.server.com/OurSong

A band might distribute this URL, which should be a public account, through social networks starting with friends and colleagues; this URL usually gives free access to what would otherwise cost money, and everyone is welcome to share it with others. Anyone could click to listen (or download) free -- provided that at least one prepaid copy was currently available. And anyone could prepay any number of additional copies, usually in bulk (perhaps 100 copies at 25 cents each, for $25 paid by bankcard, PayPal, etc.). If account names are not case sensitive, then it doesn't matter if end users capitalize the letters or not.

c. The band includes its own name, and avoids name conflicts with other artists:
www.server.com/OurBand/OurSong

The band may want to use names in this form to avoid any name conflicts with other users -- especially since these public-account names are not secret, and will often be short for convenient entry (though most users will just click the URL they received through email or whatever, and never need to type in an account name, so for them the length of the name does not matter much).

Our next section, Examples, has more information on this example and others.

9. The Server That Manages the Accounts -- And Who Runs It?

Thousands of Smart-Accounts (or other reproducing accounts), used by many different people, will be maintained on a server with its own Web address (we will call it www.server.com in these examples). This service will be managed either as a for-profit or non-profit business, and supported by charging a small percentage fee of each money transaction handled. Hopefully the fee for this totally automated system will be small -- perhaps 1% (delivering more than 99% of all payments to the artists, or to the cause for which they are raising money). In the beginning there will be more problem-solving and handholding required, and less income from transaction fees, so some investment will be needed early, as with almost any business.

When the server first starts running, it could in theory have one starter account, from which all the many thousands of accounts eventually in use will be produced. There is no real need to start with a single account, however, and for security it would be better not to. Why create an unnecessary target that would be a total disaster if it every got out, through an unhappy employee, for example? With multiple starting accounts, no single individual would need to have access to everything.

There will of course be multiple servers, often run by different organizations. Elsewhere we have show that different servers can be compatible (buyer on one and seller on another can do business), even if they were not designed for compatibility, and (for example) one uses English account names and the other uses Chinese. This is true because what is needed is to deliver an account name to the server that issued it, in order to authorize payment; if one server cannot handle a name due to its different alphabet, for example, then an upper layer of communication can be handled later. What is required for compatibility is that the organizations running the different servers can trust each other.

But all this matters less than meets the eye, because many of the most important uses for Smart-Accounts will not require compatibility at all. This is because only one person (for instance, the artist who is selling work this way) will ever need to have a smart account. The sponsors who support the work will only need to be able to pay through standard ecommerce; and the many more end users (perhaps 99%) who get the art free, will not need any account at all. Since only the artist's server will be involved, it will simply not need compatibility with any other server.

Usually the artist (or other user of Smart-Accounts) will get their first account in one of two ways. Ideally they will get a starter account from a friend or colleague in a similar business, so that much of the specific set-up will already be done. If that is not available, they can just visit www.server.com and request a new empty account (which will probably be free, as the server will likely be supported by transaction fees and want to encourage new users). Probably the artists will choose a server that is already experienced with handling their kind of art, so their new account will not be a blank tablet, but have some of the setup done already.

10. Notes: Here is a peek at some advanced or practical matters

• This system differs from conventional online sales of music, etc. in that instead of trying to collect say 50 cents from everybody who downloads a song, the artists might instead collect an average of $50 each from just 1% of the end users, while the other 99% download free. Probably at least 1% of the audience will be able to pay, and will want either to support the artist, support a cause, make the art more available, send a message to the unique social network defined by possession of the URL, or create a new URL as a gift for the sponsor's own networks exclusively.
• Even if the sponsor's message exists and is considered advertising, this system differs from conventional advertising (or from asking for donations) in that the downloads must be prepaid before they can be used. If the prepaid downloads are exhausted, anyone in the world who can pay money online can play the hero by purchasing more of them -- instantly recharging and re-activating all copies of that smart URL throughout the world. Today, it's too easy for everyone to wait for the next person to support the site; then the whole responsibility for funding falls on whoever is doing the work, who may not be able to handle the funding in addition. In our proposal, a sponsor who helps fund the site can be recognized through an announcement delivered to everyone who uses a download that sponsor paid for -- or can be anonymous.
• This system is silent on the hated DRM (copy protection); it does not provide any support for it, but does not prohibit it either. We expect that this approach will usually make DRM unnecessary -- since almost everyone will download free in any case, so a pirate copy will have to compete with legitimate free copies that do pay the artist. If there are not enough sponsorships, the artists can lower the price, and vice versa, to keep paid sponsors and free end users in balance.
• In addition to the minimal control panel that the general public can use (for example, the ability to purchase prepaid downloads in bulk, or to use one of them free), the owner of the public account will have private access to additional controls, reached through the control panel of public account's parent.
• To pay money from a smart-account to anyone, the control panel can allow the owner to send a paper check from the account. Obviously a service to actually print and mail the check will be needed -- but it could be almost anywhere, and reached by encrypted email if necessary. The charge for this service will of course be deducted from the account.
• To pay money for one smart-account to another, the payer could have his or her account generate a new, throwaway account, which only contains a small amount of money, or is otherwise limited for security. For example, the new account could be created to make only one payment, then self-destruct and return any remaining money to the owner. Or it could be irrevocably set to only pay a single, designated account -- or to telephone the account owner for confirmation. Therefore, throwaway payment accounts with modest value might be emailed or otherwise transmitted openly in many cases, without the inconvenience of encryption or any other security.
• For several reasons we don't see conventional money transfer from party A to party B as being a major use of Smart-Accounts. Instead, their main value will be to make new business and fundraising models feasible.

Smart-Accounts Security

Reproducing accounts open doors to flexible security, as an owner can easily create and destroy any number of new accounts at will, or have accounts self-destruct automatically under certain conditions and return any remaining money safely. Owners can choose their tradeoffs between security and convenience in each case -- avoiding the inconvenience and other costs of security they don't need. For instance, if an account only has $20 in it and the entire account will be gone forever in a few minutes, its owners might choose to email it openly with no ordinary security at all.

Here are some more examples. An account owner can:

• Easily generate a new account with a limited amount of money in it, and no personal information -- putting a cap on any possible loss. For example, the user might have hundreds of dollars in a master account that's kept in a safe place -- then use it create a new account with $25, for everyday use (the new account is created at the control center of the master account, and the communication channel is always protected, for example with SSL, which is used to protect credit-card transactions). The user might then be willing to share the small account with a not-totally-trusted merchant, or over unencrypted email, or carry around the account name in a wallet. Anyone who gets the account name (giving full owner access) can get no more than $25 out.
• Irrevocably cap an account to pay no more than so much per day. (The owner can always kill the account if someone unauthorized is using it -- see below.
• Irrevocably restrict an account to pay only one payee, through a particular smart-account that payee owns. For example, a library could give out Smart-Accounts to patrons, allowing them a certain amount of use of an expensive database. If they use the account or use it up, the library could give them a new one; the point for the library is not to ration access, but to avoid losing control entirely.
• Get out of these or other irrevocable restrictions (and also perhaps foil a thief) by immediately killing the account, which can be done by an automated phone call -- touching a few buttons on a mobile phone will be enough. Smart-Accounts will normally be set up with an irrevocable address to transfer any remaining money if they are killed by the owner, or if they self-destruct. This address could be another smart-account. It could also be a physical address to which the dying account sends any remaining money.
• Get the money back if an account name is totally lost. This could be done by setting up the account in advance to self-destruct after some interval (such as three months) of inactivity (automatic activity doesn't count).
• Alternatively, get the money back immediately from a totally lost account by setting it up with a "master" account (just an ordinary smart-account), which is kept in a safe place, and shows its owner either the (lost) name of the account, or a nickname that the owner will recognize as the same account. The master account will be able to take the money out.
• Have an account telephone the owner to get approval for a transaction over a certain amount.
• Keep complete records of where money from the lost account goes.
• Not reveal any of these security features to whoever may steal or find the account -- making it risky as well a futile to try to use it.
• And most importantly, we have seen the "public accounts." These are restricted to never give any money out -- though they can give valuable information, such as music downloads. These accounts could be sent by insecure email, or widely published in a newspaper or on a Web site for example, even if they have thousands of dollars of sponsorship funds in them -- since all an unauthorized person could do with that value would be to download thousands of identical copies of the same file, which would also take some time to do.

Many of these security possibilities are largely new, in that they are not easily done with accounts that do not reproduce, and therefore have much more overhead in their creation.

Smart-Accounts Examples

Here is more on the artist example at the end of our last section, Look and Feel. (The brief description there was mainly to show what Smart-Accounts look like.)

Example 1: Independent Artists

Our main reason for developing this system was to help writers, musicians, and other artists sell their own digital work online, throughout the world.

Suppose a band is not well known but does have friends who appreciate its work. Suppose it has composed and recorded a song, and wants to get paid for its work. By far the most efficient way to physically get the song to an audience would be online -- no expense and hassle of recording and shipping CDs, for example. The problem today is how to find a workable system for getting paid for their online distribution.

Suppose the band decides that since it is not well known, the right price for it to charge would be 25 cents a download. That would not work today, because it's too much expense and trouble to pay 25 cents online. Just about no one would pay. In fact, there is no workable price. One dollar wouldn't work, except within a big corporate system where most customers will order many songs over time, and pay many dollars in each payment. And this system requires Congress to act as bully and outlaws free pirate distribution.

Consider another model: grassroots sponsorship. This starts from noticing that it's much harder to get 100 people to pay 25 cents each online, than to get one person to pay $25, enabling the other 99 to download free. This is especially so if the other 99 don't ever need to register or have an account; they just click on a URL (Web address) and download free, just like today. But the difference will be that their act of free downloading itself instantly pays the artist more than 24 cents of the 25. We'll look at the mechanics later.

But first, why would anyone pay $25 so that 99 other people that they might not know can listen to the music free? There are many reasons. The "sponsor" (who can pay any amount whatever to purchase the corresponding number of prepaid copies -- maybe $25, maybe $5, maybe $2,500) might know the artists and want to support them. Or the sponsor might not know the artists, but like their work and want to support it. Also, the song may support a cause, and/or its sale may be raising money for a cause -- meaning that tens or hundreds of millions of people around the world may potentially have that motive to be a sponsor, in addition to any others.

A different motive entirely is that the sponsor may want to give the work to his or her friends. The sponsor might spend $25 to get a unique URL charged up with 100 copies, than email that URL to a dozen friends or associates. Probably any of them will be able to get a free download if they don't wait too long. And if they like the work, they can be encouraged to share the same URL with their friends (with or without adding to the sponsorship). Note that the URL has monetary value, in that it gives free access to a song that would otherwise cost money.

Or consider a different set of motives entirely. A sponsor may want recognition for his or her gift. Or the sponsor may want to promote a personal, political, religious, artistic, etc. Web page -- or a MySpace page, Facebook cause, etc. -- or pass on a meaningful greeting or quotation. All these are possible if the sponsor is allowed to include a short, unobtrusive message (perhaps like a Google AdSense ad, just a few words and an optional Web address). The message will be delivered to everyone who uses a prepaid download that sponsor paid for.

There's still another motive. In case the sponsored copies run out, the URL will insist on new sponsorship before it gives out any more free downloads. Anyone who adds a sponsorship at that point will in effect instantly re-charge all copies of that URL, anywhere in the world -- and so can play the hero to the audience, and have his or her message regarded favorably as a result. Note also that most or all those copies of the URL will have traveled to where they are through social networks -- ones that include the potential sponsors as well.

In case all these motives together aren't enough to get many sponsorships, there are a couple mathematical facts to note as well. In the example of 25 cents per download of a song, we almost certainly need fewer than one in a hundred fans to be a sponsor at all (the other 99% or more just click to download free). That's because reaching 99% free (for a 25 cent download) only needs an average sponsorship of $25. And larger sponsorships have disproportionate influence; if the average is $250, then only one listener in a thousand needs to contribute anything at all.

And there's more. In case there aren't enough sponsors for the listeners, then the artists can bring them toward balance by lowering their prices. At a price of 2.5 cents a download, a $25 sponsorship will pay for 1,000 free copies. Or vice versa, the artists can raise their prices to move toward balance, if there is more sponsorship than listeners. In fact, the best way might be to let each sponsor set his or her own price -- with the understanding that the higher prices outbid the lower ones, and get their messages out to the audience first. Since the Smart-Accounts system is extremely efficient and we expect that the artists will receive more than 99% of all the money paid in, any such bidding wars in front of valuable audiences will greatly increase their incomes.

What about pirate copies, and copy protection (DRM, digital-rights management)? DRM is justifiably very unpopular. Smart-Accounts neither supports it nor stops artists from using it. However, we think that this system will make DRM unnecessary in most cases. As long as sponsors and listeners are in balance (which could happen automatically with the bidding system of sponsorship), about 99% or so of all legitimate downloads will be entirely free. Pirate copies will then have to compete against legitimate free copies that do pay the artists. And the sponsors have separate motives of their own for paying the money; the pirate copies would do nothing to meet their needs.

Later we'll explain in detail how Smart-Accounts do all this. But the outlines are not hard to see. The "public account" kind of smart-account explained earlier (see the Design tab) allows the account name to be a clickable URL. This URL will correspond to a record in the database on the server, which keeps track of the number of prepaid copies remaining, sponsors' optional messages, and much more. And since these accounts can reproduce, each sponsor has a choice of contributing to the URL to reach an existing audience (which may be highly valuable), or requesting a new URL in order to reserve the sponsorship for the sponsors' personal friends and networks exclusively.

There are lots more advantages, too. People will usually be encouraged to freely share the URL with whoever they think wants it -- and this sharing promotes the art to who people whose friends think they are likely constituents (quite a contrast to the existing commercial system of entertainment distribution, which typically criminalizes sharing). And someone who wants to help the artist and has plenty of money could easily and gracefully buy thousands of copies in one purchase, without needing to know thousands of people to give them to. Imagine the mess of trying to do that with CDs.

Notice also that these URLs need never expire. If they become empty they do not go away. As long as there are sponsors and listeners (in other words, public interest), they can continue to circulate indefinitely, paying the artists as they travel.

Examples 2 through 10:

Here are nine other examples that we published last year. We left them unchanged for archival purposes-- even though at least one of them, "Restaurant rating," was included by mistake. The mistake is that while Smart-Accounts could indeed handle this job, they offer no advantage; an ordinary Web site could work as well. Reproducing accounts will help when there is cumulative experience generated over time by different people, who can use it to improve the accounts and then pass them on to others for further development.

Still, we like the restaurant example. Here is a way to use an inexpensive Web site to improve the dining experience in a whole city or area -- based on the fact that all human activity has its ups and downs. Restaurants can self-rate their good and bad days whenever they wish, with a simple phone call, with results instantly reported on the Web -- improving their reputations since serious diners will show up on the best days and not the bad ones. Rating every day as good would not benefit a restaurant, since only relative ratings get published. And the site would have a business advantage of its own, since it could offer restaurants unique advertising that only appears on their good days, or maybe only on the very best -- with potential diners informed about the quality the ad's appearance represents.

Here are all nine examples, from "A Radically New Way to Use Money Online: Smart-Accounts for Selling Art and Information," http://www.Smart-Accounts.org/archive2007/index2007-03-22.html . We're not saying that all of these should be done, only that they could be. And we deliberately included some bizarre examples to show the great flexibility of reproducing accounts:

• Fundraising games worldwide. The same Smart-Accounts could also manage global fundraising games in which teams compete to mobilize their major donors to raise the most money within a certain challenge interval -- like the walkathon-type events but focused directly on large donations, and with no physical overhead. All funds could reach their final destinations instantly and in full public view, for transparency and accountability; for example, seconds after a credit card is charged, over 95% of the donation amount could arrive at the account of a relief organization on the ground in a disaster area, and be used immediately to order supplies. Once a good fundraising game is programmed into a family of Smart-Accounts maintained on a particular server, the technical infrastructure for a new worldwide fundraising campaign might be set up by one person in an afternoon, in a process much like starting a blog. Then organizations can focus on their people and on building constituency, and not be diverted into making the technology work. And the games will let fundraisers use competitive, deadline-based appeals, as well as need-based appeals.
• Micropayment-supported Web sites. Some popular sites are now maintained by a dedicated expert and Webmaster, at personal financial hardship. Instead, the site might charge 5 cents a visit; if there are 10,000 visits a month, that's $500, to be paid by sponsors. Anyone could contribute any amount to sponsorship and open the site to free use accordingly; in this example $50 would pay for traffic for about 3 days, and sponsors could include their own short message if they wanted (it would reach 1,000 people in this case). If the nickels run out, visitors will see a page explaining the situation and requiring a donation of at least 5 cents to proceed -- a minor emergency that fundraisers can use to help supporters pony up (especially since they can see the need for and result of their donation instantly, worldwide). There might also be a warning if the prepaid visits run low. Basically this system will give the people actually running an important site a graceful way to insist that supporters need to help with funding, or else the service cannot continue. Today there may be no way to insist, until the operation is forced to close permanently.
• Digital event tickets. The same accounts that sell music, videos, writing, journal access, and other art and information through free downloads could also provide paperless, fully digital movie or other event tickets. Each paperless ticket (a code or passphrase) could admit an individual or a group of any size arriving at the show either together or separately. Friends will be able to buy and share these digital tickets by mobile phone, even from inside the event if calls or text messages are allowed -- for example, to admit friends who are waiting outside. An optional pricing and bidding system that ramps up very rapidly when seats are about to sell out could assure that seats will always be available, at a price. So those with the money to spend can just go regardless of whether the show is sold out, and pay whatever price is necessary to get in; theaters will make more money than now as they will collect part of the high bid price if there is a sale, and audience members who signed up could get a text message with the price before or after they enter the theater, give up their seats if they choose to, and make good money as well.
• Digital collectibles. Also for fundraising, archival Smart-Accounts could record donations of money or volunteer time to organizations or causes that may become historically important later -- in which case the donation records (authenticated by account access and displayed publicly if the owner wants by clickable access links) could have value as digital collectibles. Therefore routine donations (of money or other support to an important organization, especially if its importance is not recognized at the time) could become personal investments for the donor as well, creating an entirely new incentive to give. Digital collectibles may seem implausible, but they will have scarcity, as well as historical or entertainment value. And they already exist, at least for children's trading cards; see http://www.tokenzone.com/, where you can collect Harry Potter, cartoon penguin, and other cards. Unlike the old bubble-gum trading cards I grew up with (baseball players, state license plates, etc.), digital collectibles can have video and sound attached. Organizations can tell the story of the campaign for which the donation is used, including short interviews with participants, and information that may not be otherwise released to the public. In some cases, donors could have exclusive or shared-exclusive custody of the only copy certain information; they could choose to release it publicly, release it to a closed group, destroy it forever, or do nothing, preserving the choice for later. The point, of course, is to provide new, additional incentives and motives for donating in the first place.
• Spam control. Since Smart-Accounts can receive and forward email, individuals will be able to use this system to charge for receipt of email to a special address -- perhaps a penny per email from strangers not on a white list (to stop most spam), a dollar or more to receive donations for a cause, or any amount offered to an expert as a bid for grassroots, spot consulting. Correspondents can pay by any means, and get codes to include in their emails to these special addresses; one code could work for all such email addresses handled by the server. These codes will be restricted to pay only for emails, and owners can set limits such as number of emails per day and maximum amount, to control abuse in case spammers get someone else's code. Also, stealing someone else's code and using it to spend their money would be clearly illegal -- an additional tool for spam control.
• Restaurant rating. Smart-Accounts could include a service allowing restaurants to instantly self-rate their good and bad days by phone, so diners could check the Web or call an automated phone number for the rating, and arrive only for the best food, and not when a key person is sick or something else has gone wrong (and the restaurant might want fewer customers anyway). The accounts will report grades "on the curve" -- so if a restaurant rates itself best every day, diners will soon see it rated average every day. Unless the immediate need for money is desperate, it will be in the restaurant's interest to rate its quality truthfully. This little innovation could improve food quality, and overall experience of both the diners and the staff, with no down side. Note that this is a non-financial use of Smart-Accounts (as the accounts never need to hold money). These accounts will have considerable infrastructure to offer, only some of it is financial.
• International language experiment. It would be fascinating to explore what could be done with very simple systems for universal online communication regardless of language -- to get the low-hanging fruit, with no attempt to be able to communicate everything. We already have the ten digits in common, and some standardization on pictures, such as symbols for some public signs. Some tourist concepts are partly standardized, like taxi and hotel. A few other symbols could be selected for emotional states, or for standard common dilemmas that people deal with -- based on cross-cultural research such as studies of facial expressions, or emoticons in common use. Standard thumbnail photographs or representational drawings could convey other ideas. Cross-cultural studies of conversations could offer leads to other meanings that should be included to make conversation work well. A handful of grammar rules would be included (designed to be easiest and most familiar to most people). And where no existing picture or international symbol could work for a needed concept, a word or phrase would be selected by the team in each of several major langauges, to thoroughly specify the intended meaning; then volunteers could use those examples to write each similar word or phrase in another language that volunteer wanted to support. Such a system could be an optional feature of any Smart-Accounts. End-users would select the language of their choice ( see "International Sales in Many Languages," http://www.Smart-Accounts.org/indy/#languages). A printed palm card could label the pictures in each language -- for beginners, and also for face-to-face communication by pointing when no computer is available. The goal would be a simplified, computer-assisted international language, especially an emotional language, that people could pick up and learn to use in an afternoon.
• Response to events. Owners could use the control panel to instruct a smart-account release messages, money, or public information in the future, either at a given date or time (such as January 1, 2021), or in response to personal or world events (such as five years after the death of the account owner -- or a century in the future -- or one month after a nuclear war). Smart-account owners would buy these services by contributing to an endowment to maintain the accounts forever, to the extent possible. Only certain contingencies would be available for testing by the accounts, as it would cost to maintain forever a secret, redundant team that would resolve ambiguities, follow agreed procedures, and update the server accordingly. (It should be secret to avoid undue pressures on members.)
• Education. There's a lot of push to teach schoolchildren about business and investment. With Smart-Accounts, they could invest their pocket money, maybe from five cents to some maximum like $25. They could invest in a fixed-interest account actually offered at a local bank, an index fund, Euros, gold -- even some derivatives, like calls. They could move their money online between investments -- either at no cost, or at a cost selected for its educational value. They could put in or take out cash at certain class banking hours, and have complete records of all their actions and results. While an investment of five cents might take a long time to reach six cents or four, every child could also see results of their actions for a standard imaginary investment of perhaps $1000, to show changes in value more readily. For both the actual and imaginary investments, the managers of this system would enter the real prices at least once a day, and could hedge in financial markets to protects themselves if necessary, against loss due to fluctuations in the cumulative investments of thousands of children.

Contact:

The Smart-Accounts design and this site were created by John S. James, Philadelphia, PA, jjames [[at]] Smart-Accounts [[dotorg]].

Privacy:

We will not send spam or mass email, and will not give out user information unless legally compelled to do so.

Discussion Forums:

Anyone can read the forums. They are not yet ready to use, so only administrators can add new messages in a forum at this time.

About:

About the logo: The Sombrero Galaxy (picture courtesy of NASA) has an estimated mass of 800 billion suns (800,000,000,000) -- suggesting that there are hundreds of billions of stars in that galaxy alone (no one has counted). Clearly there's a lot going on -- or was, 28 million years ago, which is what we are seeing today. It probably looks about the same now, and in 28,000,000 years we can know for sure. (Yes, I know that time is relative to the observer.)

Links: Virtual Money

For an excellent collection of links on virtual money and related topics, see "Future of Money" http://michaelaltendorf.wordpress.com/2007/08/21/future-of-money/

Archive: Smart-Accounts History

We have published various writeups in the last two years. Here we prefer to link to copies in the Internet Archive, www.archive.org, which provides a permanent public record. The dates on this page show when these articles appeared in the Internet Archive, and differ from our publication dates on each articles themselves, which show when each document became available online. Much information is repeated, since we wrote each of these as a stand-alone introduction. But these introductions also have much information cannot be found anywhere else.

In date order starting with the most recent:

• Smart-Accounts: Online Financial Accounts That Can Reproduce, Inherit, and Evolve -- Global Small Business and Fundraising Tools, May 1, 2007, http://web.archive.org/web/20070501125349/http://www.Smart-Accounts.org/
• A Radically New Way to Use Money Online: Smart-Accounts for Selling Art and Information, March 31, 2007, http://web.archive.org/web/20070331122416/http://www.Smart-Accounts.org/
• Online Financial Accounts That Can Reproduce, Inherit, and Evolve: A Better Way to Distribute Art and Information Online, February 2, 2007, http://web.archive.org/web/20070202015321/http://www.Smart-Accounts.org/
• Can Online Financial "Smart Accounts" Have Children? How Independent Artists or Fundraisers Can Sell Prepaid Free Downloads Worldwide in Many Languages, with No Copy Restrictions or Upfront Cost, August 5, 2006, http://web.archive.org/web/20060805184701/http://www.Smart-Accounts.org/
• Smart Accounts: Software Design to Sell and Share Prepaid Free Downloads of Music, Writing, Videos and More, June 15, 2006, http://web.archive.org/web/20060615004029/http://www.Smart-Accounts.org/
• Online "Smart Accounts" That Can Reproduce and Inherit: Gift Economy for Artists, Fundraisers, Ecommerce, 2006-02-03, http://web.archive.org/web/20060223093237/http://www.Smart-Accounts.org/

This is only a partial list, and more will be added later.

Forums

Supporting Musicians, Writers, and Artists Online

Many publications are laying off staff because they cannot compete with free and more targeted news and ads on the Internet. What has and hasn't worked so far -- so that creative workers will be able to earn a middle-class income from their work like many other people, and not have to also do other jobs to get by? That's what our Smart-Accounts design is for -- but this particular forum will focus on other approaches, especially those in operation now. (If it's not clear where your message should go in these discussion forums, just leave it anywhere, or use our contact form, and we will move it to the right place.)

Quite a few existing services let musicians and others get paid for their work online -- without the disadvantages of a corporate record label or even a traditional book publisher, both of which are in the superstar business these days. These new efforts face problems that we have designed Smart-Accounts to get around: especially the need to collect payment every end user (and require payment processing as well); this deters customers, and also blocks free sharing of music, etc., making informal marketing difficult.

But there are successes; for example, we know someone who built a house with the proceeds of a book sold as a password-protected PDF file. This person already had a large and motivated online constituency in place.

This "Existing Services" topic is for discussing software, services, or other means that artists can use to get paid for online work. We want to hear especially about successes, but need to know about difficulties as well.

Money and evil: What can we do?

Money and Society

Note: you can comment on this post, below. Or you can start a new discussion on money -- by clicking "Money and Society" above, then click "Post a new Forum topic" (and ignore the error messages -- your topic should be posted for moderation.

Clearly money is not the root of all evil. For example, most people agree that rape and serial killing are evil, and these crimes are seldom committed for money.

But money (and the class systems it mediates) is the root of much evil. Probably most people in prisons are there for property and other crimes done for money. Money also helps cause wars. It motivates many private murders. It causes millions of deaths from preventable or curable diseases. It leads to massive corruption, and even criminal capture of governments. A proper accounting would list money as one of the leading causes of human death today.

Religious imagery provides another look. Satan is often presented as having access to big money; Jesus seldom if ever is. Jesus chased the loan sharks out of the temple; today we worship money as god, and build our economy on permanent debt.

Money can also be used for good, and this is commendable. But aside from its uses good or bad, money carries with it certain kinds of human relationships. Money must be kept scarce; otherwise it wouldn't work. In practice, this translates into inevitable personal failure and mass poverty. For companies to fail is part of capitalism: fine. But today we are moving toward a world where almost everybody must justify himself or herself in the market place like a tiny company -- or relate closely with someone who does. There just isn't room in human society for six billion separate entities to do this -- leading to persistent poverty, and to the insane pace of middle-class life, where parents push their children to spend all day every day working for success -- because they know very well that today's world of work is musical chairs, that no matter how productive everybody is, there can never be enough success slots to go around.

What Can We Do?

People will continue to use money because it does fill a need. I saw this recently on a one-stop flight from Philadelphia to San Francisco. Clearly thousands of people had to come to work each day to keep the remarkably complex system going; for example the fuel had to be there, and that meant refinery and transport workers, and all the supply chains they rely on as well. Besides money, the other successful system for handling so complex a job is the command structure of the military, or of a dictatorial government. But this is worse than money, because money usually gives individuals more choice to make personal trade-offs for their advantage.

So our preferred approach to money addiction and abuse is borrowed from the treatment of drug addiction and abuse: harm reduction. The classical approach to drug treatment is to get people to stop using, period -- and accept a high failure rate. Harm reduction also sees completely stopping drug use as ideal in most cases -- but acknowledges that for many people, it's not going to happen. In these cases the strategy is to minimize the harm the drugs cause -- by getting users to cut down if possible, to better protect themselves from disease, overdose, crime, and other sources of harm, and to put their lives back together.

Similarly, a way to reduce the harm of the money system is to build and strengthen other relationships -- including simple grace and civility. Then money can still be used as it is today, but without being worshipped, being taken so all-seriously. It shouldn't be something to kill for.

Astonishing Compound-Interest Example

Here is a math puzzle that also illustrates how compound interest can get out of control. My own first guess of the answer was off by 50,000 times -- 5 million percent. We show the answer on a separate page (link below), in case you want to work on the problem before looking.

The setting: Say you borrow a million dollars at 100% interest. After one year you pay the million dollars interest due, and still owe the original million dollars (for simplicity we assume the interest does not compound continually). You do this for 20 years. Then after 20 years, you have repaid $20 million, and still owe one million.

The question: To the nearest dollar, how much would you need to add to the first payment only, so that at the end of the 20 years of almost-million-dollar payments, you would be out of debt and not owe anything?

For the answer, see http://www.Smart-Accounts.org/archive2008/zanswer.html