Online Payments Made Easy

Journalists could be an endangered species as more and more newspapers and magazines lose readers to free websites on the internet. While the reach offered by a website is immense, what is disturbing is that the author/journalist is hardly ever compensated for his or her effort in putting together an interesting article. Many business models have been tried, including paywalls, where readers have to pay to access content and freemium where a part of the content is free and the premium content has to be paid for, but the lure of the completely free competitor is irresistible. Once readers are accustomed to free content, it is almost impossible to wean them away towards making payments.

So is the case with other intellectual property like computer software and college textbooks. Even if we ignore direct criminal acts like piracy and photocopying of books, the existence of free and open source software and websites that offer educational content have curtailed demand for paid products. Some open source products have built a business model around paid services but a vast majority of open source developers have an independent source of income from companies that offer paid products and services.

So is the case with textbooks where teachers who draw salaries from universities create web-based educational resources, but as the failure of Massive Online Open Courseware (MOOC) shows, there is really no sustainable business model. The amount of effort that goes into making an online course means that it really cannot run for free and needs to be subsidized from other sources like grants, endowments or tuition fees paid by regular college students.

Unfortunately, none of these primary sources of income are available for the online journalist. Perhaps this is why many of them have no other option but to join the ranks of the much-maligned ‘paid media’ and accept payments from business houses, political parties and perhaps criminals as well, to sustain a professional lifestyle. After all, no one wants to be a hermit and there is no harm in aspiring for la dolce vita of owning a flat and a car, going on vacations and sipping single malt! But which reader will pay for all this? And that too with the added hassle of subscribing to a website, providing credit card credentials and revealing your personal details.

Enter cryptocurrency, the blockchain and the wallet-in-the-browser envisaged in Mist, the ‘browser’ pioneered by Ethereum. Bitcoin is the first cryptocurrency that appeared in 2009 and after many ups and downs and brushes with the law, it has now been accepted as a tradeable commodity by monetary and law enforcement agencies. It now has a market capitalisation of around $5.5 billion. Blockchain, the technology behind bitcoin and similar cryptocurrencies has even wider usage in the trading and settlement of financial assets and is being evaluated as an alternative to the dematerialised securities that are currently traded in global markets. In fact, bitcoin and blockchain are now being seen as a way of enforcing smart contracts and companies like Ethereum offer platforms where contracts can be defined digitally and then enforced through an automatic transfer of assets, when the terms of the contract are fulfilled.

A visit to a website involves following the rules of the http protocol to exchange of information between browser software on a user machine, eg. Chrome, Mozilla, and a web server like Apache running on the website. What if this http protocol were to be modified to ensure that in addition to transmitting and receiving bytes of data, there was a corresponding and automatic transfer of cryptocurrency like bitcoin, from the browser to the web server?

This cryptocurrency can then be exchanged for a regular, fiat currency like INR or USD, through any of the regulated cryptocurrency exchanges that are already available and the owner of the intellectual property on the website can then buy his single malt! Alternatively, some liquor stores can directly accept cryptocurrency but that would be another story…

Web browsers and web servers are already equipped with basic cryptographic tools that allow us to browse the web safely using the secure http or https://protocol. So the technology necessary to transfer cryptocurrency is readily available and fairly simple to implement. Every browser software would become a wallet that would have a stock of cryptocurrency and before it loads a webpage from any web server, there would be an automatic transfer of currency from browser to the server—like paying for the ticket to enter a movie hall. If there is not enough cryptocurrency balance in the browser, the web page will not load. If you do not have the money to buy a movie ticket, you simply stand outside the theatre!

How would the browser-wallet be loaded with cryptocurrency to begin with? Quite a few options exist. First, you could use a credit card to buy cryptocurrency at a currency exchange and have the currency delivered into your browser. Second, you could purchase crypto recharge coupons from cryptocurrency vendors, similar to those used for pre-paid cell-phones, and use the same to top up your browser. Third, any vendor offering a promotional discount, or cash-back, can do the same using recharge coupons.

So, just as cellphone companies offer 30 minutes of ‘free’ talktime, they can offer 30 units of ‘free’ browser time. Similarly, employers who offer Sodexho-style food or lunch coupons can offer browsing coupons valid for a certain number of browsing units. Finally, as a way of promoting their own websites, some website owners can, instead of charging browsers, actually pay users to visit their website and either spend a certain amount of time or perform some activity. So in this case, when a browser visits a website with a currency ‘faucet’, the currency will flow from server to the browser and replenish the browser wallet.

In fact, thanks to the ‘intelligence’ that can be built into cryptocurrency, many innovative business rules are possible. In blockchain jargon, this is referred to as encumbrances that are placed on the spend of cryptocurrencies. Schools and colleges can hand out currency that can be only be transferred to, or used at, specific websites that offer educational content. Employer companies can give currency that can only be used outside office hours or while the browser machine is not connected to the office network. Instead of giving free tickets to a new movie, a corporate house can hand out currency that can be used to see the movie on YouTube, but from the comfort of your home and at a convenient time. Finally, the entire experience of e-commerce, buying goods and services online, can become vastly easier as users will not have to juggle credit cards. But if the browser becomes the wallet, people who share a public computer would have to be careful, as otherwise, currency loaded by one can be used by the others.

However, the real question is: will people pay to visit a website? People have been using the web with the assumption that everything is free but in reality this is not so. We are always paying money to access the web or someone, like our employer or college, is doing so on our behalf. This money is collected by the ISP or telephone companies and they allow us to reach any website that we want. We are happy to pay the ISP for the bytes that enter our browser, but not the content creator for the bytes that leave his server! Why? Because we are used to making one monthly payment for utilities. We are happy to pay for the bus ride that takes us to the movie theatre but we are not willing to pay for the movie ticket. Once we have a cryptocurrency-based payment system and the content creator on the website sets a price for access, buying that ticket to access the contents of a website will become automatic and frictionless.

In fact, content creators can begin with a very low, or even zero, access charge, ramp up when their sites become popular and finally discover a price, hopefully more than zero, that the market will bear.

Modifying the http protocol to allow general browsers to work with cryptocurrency will require changes to standards published by W3C, the World Wide Web Consortium and IETF, the Internet Engineering Task Force, the two bodies that ensure that the web is as universal and interoperable as it is today. This change will take time. In the interim, traditional payment gateway service providers could build cryptocurrency payment gateways and provide browser plugins that users can install on their machines to create their own browser-based wallets. In parallel, popular websites should form a consortium that will create the critical mass of content necessary for the success of the scheme and define standards around which frictionless payment mechanisms can be built.

The technology is readily available but will readers be willing to pay for content that is superior to what is available for free? That is the real question.

This article was published in the May 2016 Issue of Swarajya Magazine. To subscribe, click here.

Prithwis is an engineer by education, a programmer by passion, a teacher by profession and an imagineer by intention. After a long stint in the consulting and software business, he has moved to academics and now helps students learn how to dream, dare and deliver on tomorrow’s technopromise today. Follow @prithwis on Twitter.