Cypherpunks, e-money and the technologies of disconnection - encryption technology; includes related articles; excerpt from book, 'Out of Control'

Whole Earth Review, Summer, 1993 by Kevin Kelly

A hoary orge known as the Pay-Per-View Problem haunts the information economy. In the past this monster ate billions of dollars in failed corporate attempts to sell movies, databases, or music recordings on a per-view or per-use basis. The ogre still lives. The problem is, people are reluctant to pay in advance for information they haven't seen because of their hunch that they might not find it useful. They are equally unwilling to pay after they have seen it, because their hunch usually proves correct: they could have lived without it. Can you imagine being asked to pay after you've seen a movie? Medical knowledge is the only type of information that can be easily sold sight unseen, because the buyers believe they can't live without it.

The ogre is usually slain with sampling. Moviegoers are persuaded to pay beforehand by lapel-grabbing trailers. Software is loaned among friends for trial; books and magazines are browsed in the bookstore.

The other way to slay the problem is by lowering the price of admission. Newspapers are cheap: we pay before looking. The ingenious thing about information-metering is that it delivers two solutions: it provides a spigot that records how much data is used, and it provides a spigot that can be turned down to a cheap trickle. Encryption metering chops big expensive data hunks into small inexpensive doses of data. People will readily pay for bits of cheap information before viewing, particularly if the payment invisibly deducts itself from an account.

The fine granularity of information-metering gets Peter Sprague excited. When asked for an example of how fine it could get, he volunteers one so fast it's obvious that he has been giving it some thought. "Say you want to write obscene limericks from your house in Telluride, Colorado. If you could write one obscene limerick a day, we can probably find 10,000 people in the world who want to pay ten cents a day to get it. We'll collect $365,000 per year and pay you $120,000, and then you can ski for the rest of your life." In no other kind of marketplace would one measly limerick, no matter how bawdy and clever, be worth selling on its own. Maybe a book of them -- an ocean of limericks -- but not one. Yet in an electronic marketplace, a single limerick -- the information equivalent of a stick of gum -- is worth producing and offering for sale.

Sprague ticks off a list of other fine-grained items that might be traded in such a marketplace. He catalogs what he'd pay for right now: "I want the weather in Prague for twenty-five cents per month, I want my stocks updated for 50 cents a stock, I want the Dines Letter for $12 a week, I want the congestion report from O'Hare Airport updated continuously because I'm always getting stuck in Chicago, so I'll pay a buck per month for that, and I want 'Hagar the Horrible' for a nickel a day." Each of these products is currently either given away scattershot, or peddled in the aggregate very expensively. Sprague's electronically mediated marketplace would "unbundle" the data, and deliver a narrowly selected piece of information to your desktop or mobile palmtop for a reasonable price. Encryption would meter it out, preventing you from filching other tiny bits of data that would hardly be worth protecting (or selling) in other ways. In essence, the ocean of information flows through you, but you only pay for what you drink.