An idea hit me from out of the blue today while I was pondering
in general about the internet. This idea might be very good if
it holds up well to scrutiny. It's so simple (and probably
naive) that I can't believe that no one else has thought of it,
or shot it down before. I'll sketch it very roughly:
GLOBAL NETWORK ECONOMIC SCHEME
Instead of charging real money in cyberspace, charge
"virtual money" that does not necessarily relate
directly to real money. HTTP servers and other TCP/IP
services could charge by "page", by hit, by entry into
an "area", or whatever from the user's (or agent's)
virtual account.
Let the virtual money establish a value for itself. For
example, one could purchase (using local currency) X
number of credits/tokens (X would depend on the current
state of the market) with your $19.95 ISP monthly fee
($10 of the $19.95 would probably be your connection
fee). If you run out of credits, you can purchase more
from your ISP (or someone else), earn them yourself by
providing info services, etc; if you have extra credits,
you can save them or convert them into real currency.
All charges on the internet would be deductions of
virtual money, not "real money". This could very nicely
solve the international payment problem. This payment
model could apply to digital television programs (pay-
per-view), etc. since such digital data will arguably
be transfered over the net in the future.
This scheme would leave our existing financial system
completely intact. Each country could convert between
their local currency and cyber-credits based on their
current market value. Hell, governments could even tax
such conversions if they wanted to (cyber-transactions
would not be taxed, however, since they would occur in
a global space). The cyber money would be its own neutral
currency, its value based on the market for information
within itself. Any credits that one earned would best be
spent on other internet services, of course (no tax),
and the best way to obtain credits would be to earn them
rather than purchase them in real world currency.
(Businesses would, however, need to "cash in" their cyber
money for real dollars/pesos/etc periodically.) In this
sense, it would be natural to think of cyberspace as a
country with its own currency (and zero transaction
cost--well, at least no taxes on transactions), with
conversion rates to and from the "real world" currencies.
Many types of information should remain free on the internet,
of course--ADVERTISING (those guys should probably pay us),
for instance. Also, public info, private homepages, general
information, some educational info, etc.
It seems to me that it would be far easier to build an
tracking and verification system into current internet
software that worked with imaginary units of currency
(at first), get it bootstrapped and working, and finally
"turn it on" when everything checked out to the internet
communities approval THAN to place our real world bank
accounts and credit lines "on tap" on the internet. Getting
the later scheme to work internationally will take years,
and is being undertaken by governments and a few powerful
corporations, each seeking to be key middlemen. The
virtual money scheme could be a general software-driven
one operating on open protocols developed by an (adhoc)
international internet commitee, and would not require
the permission of any governments to be deployed. It would
require the support and cooperation of the majority of
internet software developers and commercial businesses,
however.
Is there anything to this idea? Has it been proposed and
shot down already? I realize that it is very sketchy at
this point, but I have details dancing about in my head
should it prove worthy of further development.