Standardizing Payment Links

Why online tipping has failed.

TL;DR – Standardizing Payment Links for the Web is not enough – we must also focus on listing and transacting assets that provide value to people.

Today was a busy day for PaySwarm/Bitcoin integration. We had a very productive discussion about the PaySwarm use cases, which includes supporting Bitcoin as an alternative currency to government-backed currencies. I also had a very interesting discussion with Amir Taaki, who is one of the primary developers behind Bitcoin, about standardization of a Bitcoin IRI scheme for the Internet. Between those two meetings, Dan Brickley asked an interesting question:

danbri Sept 23rd 2011 12:36pm: @manusporny any thoughts re bitcoin/foaf, vs general ways of describing online payability? @graingert @melvincarvalho

This question comes up often during the PaySwarm work – we’ve been grappling with it for a number of years.

Payment Links Solutions

Payment links have quite a history on the Internet. People have been trying to address payment via the Web for over a decade now with many failures and lessons learned. The answer to the question really boils down to what you’re trying to do with the payment. I’ll first answer what I think Dan was asking: “Do you think we should add a bitcoin term to the Friend of a Friend Vocabulary? Should we think about generalizing this to all types of payment online?”

First, I think that adding a bitcoin term to the FOAF Vocabulary would be helpful for Bitcoin, but a bit short-sighted. This is typically what people wanting to be paid by Bitcoin addresses do today:

Support more articles like this by donating via Bitcoin: 1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa

If you wanted to donate, you would copy/paste the crazy gobbledey-gook text starting with 1A1z and dump that into your Bitcoin client. One could easily make something like this machine-readable via HTML+RDFa to say that they can be paid at a particular Bitcoin address. To make the HTML above machine-readable, one could do the following:

<div about="#dan-brickley">
Support more articles like this by donating via Bitcoin: 
   <span property="foaf:bitcoin">1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa</span>
<div/>

However, that wouldn’t trigger a Bitcoin client to be launched when clicked. The browser would have to know to do something with that data and we’re many years away from that happening. So, using some sort of new Bitcoin IRI scheme that was discussed today might be a better short-term solution:

<div about="#me">
Support more articles like this by 
   <a rel="foaf:tipjar" href="bitcoin:1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa?amount=0.25">donating via Bitcoin</a>.
<div/>

This is a pretty typical approach to an online donation system or tipjar. You see PayPal buttons like this on a number of websites today. There are a few problems with it:

  • What happens when there are multiple Bitcoin addresses? How does a Web Browser automatically choose which one to use? It would be nice if we could integrate payment directly into the browser, but if we do that, we need more information associated with the Bitcoin address.
  • What if we want to use other payment systems? The second approach is better because it’s not specific to Bitcoin – it uses an IRI – but can we be more generalized than that? Requiring the creation of a new IRI scheme for every new payment protocol seems like overkill.
  • How should this be used to actually transact a digital good? Is it only good for tipjars? How does this work in a social setting – that is, do most people tip online?

The answer to the first question can be straight forward. A browser can’t automatically choose which Bitcoin address to use unless there is more machine-readable information in the page about each Bitcoin address or unless you can follow-your-nose to the Bitcoin address. You can’t do the latter yet with Bitcoin, so the former is the only option. For example, if the reason for payment were outlined for each Bitcoin address in the page, an informative UI could be displayed for the person browsing the page.

Luckily, this is pretty easy to do with HTML+RDFa, but it does require slightly more markup to associate descriptions with Bitcoin addresses. However, what if we want to move beyond tips? Just describing a payment endpoint is often confusing to people that want to pay for some specific good. Browsers or Bitcoin software may need to know more about the transaction to produce a reasonable summary or receipt to the person browsing, and that can’t be done with the markup of a single link.

The second question is a bit more difficult to answer. It would be short-sighted to just have a vocabulary term for Bitcoin. What happens if Bitcoin fails for some reason in the future? Should FOAF also add a term for Ven payments? What about PaySwarm payments? The FOAF vocabulary already has a term for a tipjar, so why not just use that coupled with a special IRI for the payment method? What may be better is a new term for “preferred payment IRI” – maybe “foaf:financialAccount” could work? Or maybe we should add a new term to the Commerce Vocabulary?

Depending on a payment protocol-specific IRI would require every payment method on the Web to register a new Internet protocol scheme. This makes the barrier to entry for new payment protocols pretty high. There is no reason why many of these payment mechanisms cannot be built on top of HTTP or other existing Internet standards, like SIP. However, If we have multiple payment protocols that run over HTTP, how can we differentiate one from another? Perhaps each payment mechanism needs it’s own vocabulary term, for example this for Bitcoin:

<a rel="bitcoin:payment" href="bitcoin:1A1zP1eP5QGefi2DMPTfTL5SLmv7DivfNa?amount=0.25">tip me</a>.

and this for Ven:

<a rel="ven:payment" href="https://www.vencurrency.com/confirm/transfer/?request_key=8df6e4c0240365e425d6cf4839e5266e">tip me</a>.

and this for PaySwarm:

<a rel="ps:payment" href="https://dev.payswarm.com/i/manu/accounts/tips">tip me</a>.

The key thing to remember with all of these payment protocols is that what you do with the given IRI is different in each case. That is, the payment protocol matters and thus we may not want to generalize using the first two, but we do want a generalized solution. PaySwarm is a little different, in that it is currency agnostic. The standard aims to enable payments in Bitcoin, Ven, Bernal Bucks, or any current or future currency. So, one could just specify a person to pay via PaySwarm, like so:

<a rel="ps:payment" href="https://dev.payswarm.com/i/manu">tip me</a>.

The financial account could be selected automatically based on the type of payment currency. If the person is transmitting Bitcoins, a selection of target Bitcoin accounts could be automatically discovered by retrieving the contents of the URL above and extracting all accounts with a currency type of “Bitcoin”. So, that may be a good technical solution, but that doesn’t mean it is a good social solution. The hard problem remains – most people don’t tip online.

Tipping is a Niche Solution

Sure, there are solutions like Flattr and PayPal donations. These solutions will always be niche transactions because they’re socially awkward financial transactions. People like paying for refined goods – they only give on very rare occasions, usually when the payment is for a specific good. Even tipping wait staff at a restaurant isn’t the same as a tip on a website. When you tip wait staff, you are reimbursing them for the time and courtesy that they provided you. You are paying them for something that is scarce, for something that has value to you.

Now, think of how often you tip online vs. how often do you actually buy things online? A good summary of why people rarely tip online can be found on Gregory Rader’s blog – first in why people have a hard time paying for unrefined goods and why tips and donations rarely work for small websites. The core of what I took away from Greg’s articles is that, generally speaking, asking for tips on a small website is easily dismiss-able if done correctly and incredibly awkward if done incorrectly. You’re not getting the same sort of individual attention from a website than you are when you tip at a restaurant. You are far less likely to tip online than you are during a face-to-face encounter at a restaurant. Anonymity protects you from feeling bad about not tipping online.

People have a much easier time making a payment for something of perceived value online, even if it is virtual. These goods include songs, shares in a for-profit project, a pre-release for a short film, an item in a game, or even remotely buying someone a coffee in exchange for a future article that one may write. In order to do this, however, we must be able to express the payment in a less abstract form than just a simple Payment Link. It helps to be able to describe an asset that is being transacted so that there is less confusion about why the transaction is happening. Describing a transaction in detail also helps make the browser UIs more compelling, which results in a greater degree of trust that you’re not being scammed when you decide to enter into a transaction with a website.

Refined Payments

So, if we have a solution for Payment Links on the Web, we need to make sure that they:

  1. Are capable of expressing that they are for something of refined value, even if virtual.
  2. Are machine-readable and can be described in great detail.

The Web has a fairly dismal track record of tipping for content – people expect most unrefined content to be free. So, applying plain old Payment Links to that problem will probably not have the effect that most people expect it will have. The problem isn’t with ease of payment – the problem is a deeper social issue of paying for unrefined content. The solution is to be able to describe what is being transacted in far more detail, marked up in a form that is machine-readable and currency agnostic.

Expressing a PaySwarm Asset and Listing in a page, with Bitcoin or Ven or US Dollars as the transaction currency is one such approach that meets this criteria. The major draw-back being that expressing this information on a page is far more complicated than just expressing a Payment Link. So, perhaps we need both PaySwarm and Payment Links, but we should know that the problem space for Payment Links are much more socially complex than they may seem at first.

To answer Dan Brickley’s question more directly: I don’t think FOAF should add a “bitcoin” vocabulary term. Perhaps it should add something like “financialAccount”. However, once that term has been added, exactly what problem do you hope to solve with that addition?

4 Comments

Got something to say? Feel free, I want to hear from you! Leave a Comment

  1. Melvin Carvalho says:

    Thanks for an insightful post.

    I think in a broad sense you are correct, that we need a good general solution that can facilitate payments on the web more easily.

    Similarly, the bitcoin: IRI is something that has started to progress with IANA, thanks for your guidance there!

    The default approach will be to create a bitcoin ontology to capture the semantics of the key terms.

    foaf : account and foaf : tipjar can be used today for a bitcoin address … but there’s a rationale for creating a shorthand so that people (and robots) can immediately experiment new solutions based on the semantics.

    There is strong evidence that bticoin has significant traction at this point:

    - Google trends shows bitcoin an order of magnitude higher even the sem web
    - Multiple IRC channels, 500+ members in one channel
    - Multiple forums and mail lists, over 100 posts per day
    - Dozens of dedicated websites and startups
    - Nobel prize winner Paul Krugman wrote an article on bitcoin
    - Bitcoin mentioned in a US congress hearing on competing currencies

    And so much more. Therefore, I would welcome a foaf : bitcoin property but understand there’s a need for a generic solution.

  2. This was the post I meant to refer to at
    http://www.youtube.com/watch?feature=player_embedded&v=gYdXZ3-U-oQ#t=440s
    when wierd youtube rule prevented me from posting link

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