Monomorphic

Micropayments are an old idea.

Examples of services using something that might be called micropayments today are Apple’s App Store (for the iPhone), Sony’s Playstation Network, various MMORPGs, etc. However the typical payment sizes are still quite large:  the smallest possible payment on the App Store is 100 yen (1 dollar). With even smaller payments, say around the value of 0.001 dollars or less, a new range of possibilities is opened up. For those who worry about payment costs, it will probably soon be economically feasible to make payments in the order of 1 millionth of a dollar, given that network costs, processing costs, and storage costs go down all the time – the economics of electronic payment are really changing. Fraud is probably a much bigger hurdle to overcome.

My case for micropayments is about derivative works. I’m not sure what copyright laws will look like in the future, but it is likely that payments and some kind of monetary system will remain in the picture. With the rise of the internet and various kinds of legal and quasilegal file sharing (the American term “fair use” might apply here), a certain kind of derivative work has proliferated. Songs being remixed, music videos being created by fans on Youtube (usually consisting of the song in its original form and fan-made footage), memes floating around. The available technology eases the process of creating derivative works massively.

The existing legal framework was clearly not designed for this. As an amateur musician, I sometimes make music. Once, several years ago, I wanted to sample a tape recording made by Andy Warhol and use it as part of one of my works. After having e-mailed the Andy Warhol Museum, I was told that a written agreement would have to be set up with the Andy Warhol estate. (I have never made a penny from my recordings; they are made strictly for my own amusement, so there was no benefit for me in going through with a cumbersome process). Different countries have different sampling laws, for instance in Sweden sampling something like 10 seconds for use in your own music is allowed without prior agreement. However, the point here is that with a sufficiently advanced major micropayment system, this process could be made much smoother.

Consider completely original works, their derivative works, derivatives of the derivatives, and so on for a certain number of steps. In mathematical terms, this forms a graph (or rather a tree/DAG), branching out and connecting all the included and indirectly included items. With micropayments, it might be possible to pay the creators of each included work automatically by sending money down these connections, slightly reducing the payment amount on each depth level. (The hard thing here is determining the amount to pay and the reduction amount on each step – this would depend on how much the included work has been changed and how prominent it is, among other things). All of this should be fully automatic.

With such a system in place, anyone could sample anything at any time without worrying about legal agreements. Creators might receive a very large number of possibly very small payments. It’s unclear if the final payment distribution would be different from today, but I’m convinced that more derived works would be created.

However, it’s an open question whether these payments always have to be monetary. Can we envision other compensation systems for the digital world (which do not convert to cash)?