
Electronic Lottery Tickets as Micropayments (‎1997) - severine
https://fermatslibrary.com/s/electronic-lottery-tickets-as-micropayments
======
jws
For the [unannotated/unexplained/keep your bling out of my eyeballs] version
you can find the PDF at
[https://people.csail.mit.edu/rivest/pubs/Riv97b.pdf](https://people.csail.mit.edu/rivest/pubs/Riv97b.pdf)

It's an interesting idea, and the paper is from 1997. That bodes well for it
being patent free now.

In section 7 I think they touch on the possible third rail, legality. In the
US it would probably require opinions by 50 lawyers to even get started, then
you would still have to watch out for any of 50 States Attorneys General to
take a swipe at your business.

I think back in 1997 the advertising model hadn't metastasized and people
believed it could fund content.

I'm probably not typical, but I run a gentle ad blocker. (It blocks the ad
networks, but if a site has ads embedded in their actual content, with bytes
served from their site, which they are responsible for, then I see the ad.) If
a site asks me to turn it off that's ok, I leave and put them on my mental
"don't visit" list. If the site asked for $0.001 instead, I would always pay.
If they asked for $0.01, I think I would always pay, if we are talking about a
quality journalistic article.

~~~
michaelbuckbee
I'd wager that even at $0.01 per article that your time deciding whether or
not to pay would "cost" significantly more than the actual payment.

~~~
Nomentatus
Worth saying and thinking about, but...

Most people have sharp breaks below which they don't calculate; $0.01 would be
below mine cause my time's surely at least ten times as valuable (haha) (even
if two-thirds of my buys are duds.) I don't calculate whether to waste a sheet
of paper writing down a note that might be useless, even though the cost is
about 1 cent.

So there's really only one calculation, "should I just buy everything I'm
likely to actually read right away?"

~~~
jaymzcampbell
The sheet of paper is a nice analogy though I think people would see it as a
sunk cost already and so "have" to use it. The $0.01 per article is a new
transaction each and every time.

Given how mindlessly I click around the web going down rabbit holes I can get
through (albeit without really reading) a hundred+ pages an hour. It could
easily start to add up.

~~~
IIAOPSW
>$0.01 per article

> I can get through (albeit without really reading) a hundred+ pages an hour.

So you'd be entertained for an hour at the cost of $1. Seems like a good deal.

~~~
visarga
If you are online for, say, 4 hours per day, that adds up to 120$/month, which
is close to the actual price of the internet connection. So we're already
paying $1/hour at the ISP, it would be a big deal to double the costs, and
that is just for news. Add music, games and other staff that tends to cost
money and it can become expensive. That would have the effect of making
internet less used, not more.

~~~
kobeya
Which is on par for, say, HBO or Showtime premium cable subscription, roughly.
That’s a real comparable since those networks use their subscription fees to
make original content that is highly valued. Would I pay twice as much for an
Internet that is designed to inform me better rather than distract my
attention further? Probably.

------
kbaker
This is a pretty cool idea. Reminds me of the fapiao system in China for
preventing tax evasion - convert the tax receipts into lottery tickets.

[https://www.beijing-kids.com/blog/2012/01/09/scratch-that-
fa...](https://www.beijing-kids.com/blog/2012/01/09/scratch-that-fapiao-how-
you-could-win-rmb-500/)

------
CryptoPunk
The Orchid protocol is using this method for its micropayments:

[https://medium.com/@gustav.simonsson/ethereum-
probabilistic-...](https://medium.com/@gustav.simonsson/ethereum-
probabilistic-micropayments-ae6e6cd85a06)

The project's white paper mentions this paper.

------
awakeasleep
This is so brilliant. I've thought about micropayments so much and never found
a practical way to do them. And this is so simple it seems like anyone should
have thought of it!

~~~
wolfram74
How hard do you think this would be to implement on top of the Venmo or stripe
API?

~~~
DennisP
I don't know but I'm working on an Ethereum implementation right now, and it's
pretty easy.

~~~
tgb
I don't know anything about this, but how do you make randomness in Ethereum?
I assume it has to replicable across any computer and therefore would be
pseudo-random and predictable. Do you use something like the NIST randomness
beacon at a specified future time?

~~~
zaroth
Google "provably fair bitcoin lottery". They typically are based on a future
block's hash value combined with a published random seed.

Here's an example: [https://github.com/hmel/bitcoin-
raffle](https://github.com/hmel/bitcoin-raffle)

~~~
themadryaner
In theory, a miner could try to manipulate the hash of the future block to
change the outcome. It is much more difficult with Bitcoin, where valid blocks
are more rare and produce a high income, but with Ethereum blocks are so
frequent that it might be possible to collude with the mining pools is done on
a large scale.

Additionally, how does this deal with Proof-of-Stake algorithms? Ethereum is
heading there, and as far as I am aware the blocks would no longer publish
hashes.

~~~
rrobukef
A sybill attack would greatly increase the probability. And has cheatingly
other gains.

------
jakobnicolaus
A couple of years ago I built an app (PayMeMaybe) which uses this idea to
settle small debts between friends:
[https://play.google.com/store/apps/details?id=app.paymemaybe...](https://play.google.com/store/apps/details?id=app.paymemaybe.paymemaybe)

Wasn't quite the break through success I suspected :)

------
continuations
This would be illegal (in US) right? Basically you'd be selling lottery
tickets for 1 cent each.

------
IanCal
Part of the question for me is this:

There's a reasonable amount of tracking required to pass these tokens around
(and I'm a little confused as to how you avoid 'double spending' of tokens).
This is treated as cheaper than doing the transactions at the bank level.

 _Why_ are the bank level transactions expensive? What is it that means that
moving _tickets_ around is near free but _electronic references to money_ not?

~~~
pjc50
I believe it's all in the fraud handling. On
[https://news.ycombinator.com/item?id=15592192](https://news.ycombinator.com/item?id=15592192)
I came up with the phrase "the problem with micropayments is microscams".

Whereever there is value there will be attempts at fraud, and on the internet
you can automate them. Dealing with fraud inevitably requires a _skilled
human_ making decisions and dealing with complaints.

~~~
IanCal
That does make sense, but would I be right in saying the proposal doesn't
address any of this?

------
EGreg
This is brilliant. The main question, however, is how to do the random draw
without collusion with whoever is making the random draw?

~~~
jws
The paper touches on this. You could use a number which will become known on a
future date. They propose the last 3 digits of a state run lottery.

Anything with enough randomness to cover your payout ratio would work. You
could imagine taking a hash of your instance identifer concatenated with the
NASDAQ final for the end date if you really don’t want to trust anyone.

~~~
EGreg
And how do we all agree on the NASDAQ final for some end date now and in the
past? Maybe the oracle cheated. So in any case we need multiple machines who
we hope don't collude. How would we prove the NASDAQ final price was not
manipulated ever so slightly by a colluding party? And so on.

~~~
jws
Manipulating NASDAQ for a $10 contract seems like more work than it is worth.

------
Nomentatus
We also have the option of taxing ISPs and then handing that tax to creators
(according to legit page views). That way that the ISPs collect the fee for
creators seamlessly. A bit like gas taxes going for highway construction in
the fifties. Wouldn't it be great if newspapers paying reporters made sense
again?

~~~
toast0
There's no reasonable way to apportion payment for content by metrics that
ISPs can see that wouldn't be horribly gamed and bad for users.

Pay per page view is obviously out because what is a page view? Pay per byte
is inviting pages to get even bigger, no thanks. Pay per connection or DNS
lookups or time of connections is all easy to game in JavaScript.

~~~
Nomentatus
Gaming is a real problem, no question. As it is for ads now. But I doubt it's
insurmountable.

------
heyrhett
This sounds like Peppercoin, which Rivest founded in 2001:
[https://en.wikipedia.org/wiki/Peppercoin](https://en.wikipedia.org/wiki/Peppercoin)

------
zaarn
That's quite genius tbh, I wonder if there is something like this in the works
for widespread deployment.

------
debt
It's possible to send a micropayment on Venmo. Send $0.01 to someone and it'll
go through.

~~~
function_seven
Would it still be possible if penny-per-article schemes became as wide-spread
as ad-supported articles are?

I doubt Venmo could keep up with that level of transactions at 1¢ apiece.

------
rjromero
Isn’t this just Proof of Stake?

~~~
themadryaner
No. This is something entirely different entirely.

Mining a cryptocurrency goes something like this: spend a ton of money
investing in a state of the art server farm, hook server farm up to mining
pool to earn Bitcoin, withdraw Bitcoin for money, spend money to upgrade your
now obsolete server farm.

In addition to being needlessly inefficient, server farms are causing
significant harms to the environment in ways that traditional currency does
not, and is causing increases in electronics and electricity prices due to
their high demand.

Proof-of-Stake is a way to solve this. Instead of computing power determining
who creates the blocks (and earns the transaction fees/block rewards), and
instead of miners spending Bitcoin to make Bitcoin, miners put their
cyrptocurrency in a form of a lottery, with the winner writing the block
without using any computing power. The result is the same, but much more
efficient and without the environmental cons. It also may make the network
more secure, since an attacker would need 51% of the wealth in the network in
order to compromise it. And even if someone gained 51%, they would not attack
the network because they have the most value to lose.

This article is also about using a lottery, but for a very different purpose.
Microtransactions are difficult with current solutions, because vendors like
PayPal, Visa, and Cryptocurrencies usually institute minimum fees. This system
get around this system through the use of a lottery. As an example, instead of
paying $1 to 10 different sites (say in a pay-per-view of newspaper articles),
you pay with a reverse lottery ticket. This lottery ticket has a one in ten
chance of winning, and if it does you have to pay $10. The resulting payment
is the same, but all your payments are in large sums so that transaction fees
are taken care of. If the newspaper receives 10 reverse lottery tickets, they
will receive equivalent profits to charging each customer $1. Therefore, the
customers pay the same and the sellers receive the same, but without
transaction fees eating up nearly as large a percentage of the transaction
that a micro transaction would.

Both systems use a lottery powered by blockchain randomness, but the
similarities end there. The purposes and the meaning of the lotteries are
completely different. In the case of the latter, it is actually a lottery you
don't want to win.

