by kmeisthax | 2025-05-28 16:12:10+00:00
The problem with micropayments was fourfold:

1. Banner ads made more money. This stopped being true a while ago, it's why newspapers all have annoying soft paywalls now.

2. People didn't have payment rails set up for e-commerce back then. Largely fixed now, at least for adults in the US.

3. Transactions have fixed processing costs that make anything <$1 too cheap to transact. Fixed with batching (e.g. buy $5 of credit and spend it over time).

4. Having to approve each micropurchase imposes a fixed mental transaction cost that outweighs the actual cost of the individual item. Difficult to solve ethically.

With the exception of, arguably[0], Patreon, all of these hurdles proved fatal to microtransactions as a means to sell web content. Games are an exception, but they solved the problem of mental transaction costs by drowning it in intensely unethical dark patterns protected by shittons of DRM[1]. You basically have to make someone press the spend button without thinking.

The way these proof-of-work systems are currently implemented, you're effectively taking away the buy button and just charging someone the moment they hit the page. This is ethically dubious, at least as ethically dubious as 'data caps[2]' in terms of how much affordance you give the user to manage their spending: none.

Furthermore, if we use a proof-of-work system that's shared with an actual cryptocurrency, so as to actually get payment from these hashes, then we have a new problem: ASICs. Cryptocurrencies have to be secured by a globally agreed-upon hash function, and changing that global consensus to a new hash function is very difficult. And those hashes have economic value. So it makes lots of sense to go build custom hardware just to crack hashes faster and claim more of the inflation schedule and on-chain fees.

If ASICs exist for a given hash function, then proof-of-work fails at both:

- Being an antispam system, since spammers will have better hardware than legitimate users[3]

- Being a billing system, since legitimate users won't be able to mine enough crypto to pay any economically viable amount of money

If you don't insist on using proof-of-work as billing, and only as antispam, then you can invent whatever tortured mess of a hash function is incompatible with commonly available mining ASICs. And since they don't have to be globally agreed-upon, everyone can use a different, incompatible hash function.

"Don't roll your own crypto" is usually good security advice, but in this case, we're not doing security, we're doing DRM. The same fundamental constants of computing that make stopping you from copying a movie off Netflix a fool's errand also make stopping scrapers theoretically impossible. The only reason why DRM works is because of the gap between theory and practice: technically unsophisticated actors can be stopped by theoretically dubious usages of cryptography. And boy howdy are LLM scrapers unsophisticated. But using the tried-and-true solutions means they don't have to be: they can just grab off-the-shelf solutions for cracking hashes and break whatever you use.

[0] At least until Apple cracked Patreon's kneecaps and made them drop support for any billing mode Apple's shitty commerce system couldn't handle.

[1] At the very least, you can't sell microtransaction items in games without criminalizing cheat devices that had previously been perfectly legal for offline use. Half the shit you sell in a cash shop is just what used to be a GameShark code.

[2] To be clear, the units in which Internet connections are sold should be kbps, not GB/mo. Every connection already has a bandwidth limit, so what ISPs are doing when they sell you a plan with a data cap is a bait and switch. Two caps means the lower cap is actually a link utilization cap, hidden behind a math problem.

[3] A similar problem has arisen in e-mail, where spammy domains have perfect DKIM/SPF, while good senders tend to not care about e-mail bureaucracy and thus look worse to antispam systems.