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Tran Hung Dao's avatar

Here in Vietnam you don't get free water in restaurants. You would not *believe* how irate this makes Americans. There's even an American comfort food restaurant here, Eddie's Diner, who make a big marketing point out of how everyone gets a free glass of water.

I guess that's just my roundabout way of agreeing with your point.

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beleester's avatar

The tap water isn't drinkable in Vietnam, so you'd be paying for bottled water, which seems reasonable to me. I guess it still catches tourists by surprise, though.

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Tran Hung Dao's avatar

Eh, that's not really it. It's entirely a cultural equilibrium.

Even if you buy bottled water, it is dirt cheap. 20 liters of bottled water costs me $2.20. So a 330ml glass of water is, what, 3 cents? That's for a not-quite-top-end bottled water (i.e. not a foreign brand like Aquafina) so there's definitely even cheaper options out there.

If you go to a casual local restaurant you get free iced tea (trà đá) and most coffee shops give you free water with your coffee, too.

And this is more just a FYI:

It isn't exactly true that tap water isn't drinkable in Vietnam. Ho Chi Minh City has water treatment plants to make water potable just like America does. But it is true that between the water treatment plant and your faucet things might go awry. For instance, it is extremely common to have metal water tanks on the roof....that have never been cleaned in years.

To counteract the above, many buildings have their own reverse-osmosis filters to make the tap water drinkable again. Which you may not even know about. (For some reason this information is poorly communicated to tenants; you think it'd be a huge selling point.) And who knows how well building maintenance does upkeep on them?

The net result is you actually have no idea unless you take your tap water to a lab for testing. As a tourist, you're obviously not going to do that and just play it safe.

I've taken the tap water from my house to a lab and the only thing wrong with it is too many coliforms (not E. coli, though). Most coliforms are harmless so even if you did drink it, chances are you'd either have no ill effects or, at worst, take a few days to adjust. (Not that I recommend it! I'm just saying it isn't quite as bad as "isn't drinkable" makes it sound.)

After all, everyone here has dogs & cats who drink the tap water. It isn't like it is deadly.

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Rob Shouting Into The Void's avatar

Yeah same here in Europe, so used to that it would be strange to be given a glass of water.

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Edward Scizorhands's avatar

Can I get ice cubes in that water?

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Kit's avatar

Water is free in France. Bread too.

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QImmortal's avatar

This seems like an Americans problem. Are the natives similarly irate? If not, isn't this evidence that these kinds of psychic costs can be conditioned out of us?

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YF's avatar

No, because the natives do not have the cost conditioned out. They just decide that the cost is lower than traveling to find a similar restaurant with free water.

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Jeff McNamee's avatar

Free water is hard to come by in much of Europe, too, and free water is pretty standard in Canada and Mexico.

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Aaron Erickson's avatar

Micropayments are awesome for people above the threshold of caring about a small payment. If you are a blockchain software engineer, this world makes sense, as you make 500K and fifty cents to use the bathroom isn't going to rise above your "give a shit" threshold. In fact, you welcome it, explicitly because it excludes freeloaders from shared services.

Highways in CA have microtransactions to use the fast lane today - no blockchain needed. Most of this could be done with merely efficient transaction processing, which ironically, blockchains are very bad at.

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Edward Scizorhands's avatar

I already have a relationship with the agency running the highway, and I only need to understand the transaction once. After that, I am billed per use, at a clear price.

If I go to a new website, and it wants to microtranscation with me, I don't want to read through all the terms and conditions to make sure that it's not out to get me https://thezvi.wordpress.com/2017/09/23/out-to-get-you/

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Elias Håkansson's avatar

The reason for the blockchain isn't that people don't know how to charge people without it. The point is tying transactions to digital property rights in ways that we can't without it.

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Sineira's avatar

The transaction cost must also be kept at a minimum. No Bitcoinish calculations requiring a personal nuclear reactor and a farm of GPUs.

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Tom Warner's avatar

The other thing I wonder about is the temptation for founders to give themselves lots of the crypto coin that consumers need to buy to play and/or insert themselves into the crypto/dollar exchange. I don't see any other reason why micropayments wouldn't be in dollars.

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Harold Omnifuture's avatar

I want to shout to the heavens: The Blockchain is just a database. We already have databases! It's no more portable than any other database. If you're Noahpinion on Twitter, well, it's already the case that other service providers can utilize your authenticated twitter login and connect your accounts. Now, another social network might not use that login and instead another system (say Google's) - they could let anyone take the name Noahpinion. This is the status quo and will exist on the blockchain just as well because there's no limit to the number of blockchains, just like there is no limit to the number of databases or social networks.

It's just a secure, verifiable database. As to which one you trust, that's like asking if you trust Google or Apple or Facebook: Opinions will vary, you'll ultimately not trust any of them, and it'll be just like today.

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Axldpi's avatar

Bitcoin is just a database. Ethereum (as an example) is state machine = database + computing

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Harold Omnifuture's avatar

Can you expand on this? I'm not super familiar with any of the implementations outside of the basic theoretical model.

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Axldpi's avatar

While Bitcoin is 'just' a distributed ledger based on blockchain, Ethereum (and all other Ethereum like cryptos) support smart contracts. Smart contract is code that can be executed

https://ethereum.org/en/developers/docs/evm/

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YF's avatar

All databases can execute code too, how else do you operate it? Bitcoin is a primitive database, just enough to support a ledger. Ethereum is a better database that has more features, but still not on par with traditional databases.

All blockchains are databases in the sense that the most important features of them are to store and to query, instead of e.g. presenting a UI or recommending products.

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Nate Bronze's avatar

it’s not even a very good database. every insertion is very costly, and I’ve yet to see any application of blockchain besides crypto that brings anything new or better to the table

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gordianus's avatar

> It's just a secure, verifiable database.

& if you read the article Noah quoted https://moxie.org/2022/01/07/web3-first-impressions.html , you see that even this isn't practically useful as currently set up: the database being secure & decentralized doesn't matter if you always access it through some separate intermediary platform. I don't know enough about how a blockchain works to know whether it could be set up to be directly accessed by individual clients (i.e. personal computers or phone apps) rather than through a mediating server, but otherwise the purported elimination of the need for trust & of the influence centralization allows won't really happen.

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yokem55's avatar

Vitalik Buterin's repsonse to Moxie's article is worth reading - https://old.reddit.com/r/ethereum/comments/ryk3it/my_first_impressions_of_web3/hrrz15r/

FWIW, he mostly agrees, but sees a future in which the tech becomes developed such that it becomes vastly easier to run a direct blockchain peer on a mobile device, without an intermediary.

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YF's avatar

> the centralized workarounds have had years of head start.

Vitalik misread Moxie’s criticism. Moxie’s point is that centralized solutions will always have a head start, every step, in the past *and* future. And if because of that most people cannot benefit from the “built correctly” version, there is little point in it being “correct”.

Open source at least is free in price, so despite that it’s developed slower people are willing to use it. Blockchain being both developed slower and expensive cannot compete on conventional utilities.

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UnbankYourself's avatar

The Blockchain is great for what it was invented for: Sound immutable money! Not your keys not your coins was repeated as a mantra to every newbe entering. Wich meant you were ment to run your own wallet with a key that guerenteed no other had ANY kind of control over your money.

Since Store of Value, Micopayments, Defi and Yield farming came along and the whole scene turned into a big get rich quick casino the original idea seems almost forgotten and people accepted Custodians over their money again.

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Edward Scizorhands's avatar

If you aren't running a node, you need a node you can trust. But setting up your own minimalist node could be, in theory, very easy.

Also, you can check 20 or 30 nodes pretty easily instead of just one, to make sure they all agree.

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Jasper Woodard's avatar

I agree with your point in general. Drilling down though, I wonder how many of your specific points resonate because they're what a Georgist would call "land". We should sit down and drink water freely because we have a natural right to the land on which we live.

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Noah Smith's avatar

"Digital land" is an interesting concept I see some Georgists thinking about these days...

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beleester's avatar

Water is "land," but water purification and distribution is an improvement to that land.

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Jasper Woodard's avatar

Agreed

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Greg G's avatar

Noah, I’m not sure whether it’s a good thing or a bad thing, but I feel like I can just outsource my opinions on everything to you. Or at least economics.

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Noah Smith's avatar

Dangerous!! I'll keep trying to point people to an eclectic variety of sources... :-)

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David Carr's avatar

Great article! Continue to help us neophytes to stay informed.

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Matthew G. Saroff's avatar

One of the problems with blockchain is there have note been, "Stuff that blockchains can do more naturally and easily than normal protocols," yet.

More than a decade on, and we've yet to see any quirky applications from the community. There is a good chance that this is just a solution that will never find its problem.

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Fais Khan's avatar

Imagine if you had to spend a $.000001 SMTP token every time you sent an email.

Or some random group of people who own all the SMTP tokens got to choose how email worked.

That's the web3 vision.

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Edward Scizorhands's avatar

> Imagine if you had to spend a $.000001 SMTP token every time you sent an email.

wtf I love microtransactions now

> Or some random group of people who own all the SMTP tokens got to choose how email worked.

We already have a cabal running SMTP

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Elias Håkansson's avatar

This is the second time I see Noah doing good Coasean thinking and I love it.

I thought about this exact problem, but in terms of roads. The way we presently pay for roads is by tying a substantial share of it to gasoline consumption. This is a pretty decent way to assign excludability to roads, but it's highly imperfect. It doesn't price congestion, route optimization, time of day, out-of-state travel, and other things we might be interested in factoring in. But we're finally getting to a point where charging for road use is actually becoming somewhat technologically feasible, at least in theory. We could theoretically have cars hooked up to GPS systems where algorithms aggregate all the data, and spit out rates Uber-style.

To your point, people hate the transaction costs associated with this stuff, but I was thinking we actually do deal with this transaction cost everytime we go to the gas stations and fill up. We then use the fuel gauge in our cars as a reference point against which we make economic decisions, and it doesn't seem to present much of a cognitive load on us. So why should a little road tax gauge that sits in your car dash be different? And in the same vein, what about a Web3 browsing "tax"? What if the funding model for browsing the internet was, say $40 as your monthly broadband fee, where $10 of which is goes toward your "Web3 fuel gauge" for your exclusive Web3 content consumption. Or you'd have ad-based or cash-back "frequent flyer" style business models pop up where your "fuel gauge" gets topped up whenever you make purchases or watch ads. That browser plug-in Honey, that finds and applies coupons to your online purchases, could be retooled to reward users with Web3 cash. I feel like there are quite a lot of possible solutions to your Web3 transaction cost problem.

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Ben's avatar

Microtransactions don't necessarily mean having to authorise and make a decision for every transaction. Entirely possible and most likely IMO that the experience will be more like filling your car with gas every so often. You just authorise a platform to deduct a certain amount per action and rely on periodic notifications to tell you how much you're spending.

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yokem55's avatar

Just because you are batching transactions to hide the spending doesn't mean you aren't spending with each action. It's the mental overhead of "do I really want to spend $0.05 on this?" with each action that folks don't like. We see this with data caps on internet services. People hate them. They only pay for overages once a month, but it still puts the damper on overall online activity because people hate getting surpises or sudden "you're out of data" messages.

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David in Tokyo's avatar

To a certain extent, web3 is already here (and you are part of it): Lots of stuff on the web has teasers out for free and "extended content" or whatever behind a paywall. Everybody screams "Join my Patreon" or some sort of monthly payment. I keep thinking of signing up to a couple of them that I'm fans of, but can I really get US$10 a month worth of stuff from a site I may not check out for months at a time (juggling) or that already has way more stuff for free than I can consume (Go). And if I did five or six sites (you, Brad, Taylor Tries, Adam Neely, Go), it'd start adding up.

Since playing this game is so common, and seems to be still going, I guess it's here to stay...

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thisgoesnowhere's avatar

Paying for things on the web is not web3

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QImmortal's avatar

I disagree that there are inevitable psychic costs that accumulate with each microtransaction you meet.

I too once went to Japan on a shoe-string budget, agonizing over whether to purchase various amenities that cost under $10, but my distress was entirely caused by the strict budget constraints I faced at the time, not by the fact that there were so many opportunities to spend money. I was young and hadn't built up any savings. Now that I'm not so young and have looser budget constraints, tapping the magic brick and receiving amenities doesn't tend to cause me any distress (recent vacation to South Beach, Miami not withstanding).

Surely most of these psychic costs are a matter of conditioning. We live in a world where most of the information we process comes to us in written form and most people are highly literate. For us, reading things is as natural as breathing. It wasn't always like this though. The literate used to be a minority. I could easily see someone from the past claiming that conveying more information in writing is going to inflict psychic costs on the semi-literate every time they have to try to read something. They'd be right! But over time, we've been conditioned such that psychic costs of reading just aren't a thing for most people anymore.

Video games provide the best evidence that psychic costs of transactions don't have to be a thing. There are entire genres of games where the whole point is to engage in a huge series of transactions, considering trade-offs, and staying within a budget. People do this stuff for fun! We could probably take some lessons from video games to ease the transition to a world where real life microtransactions are more prevalent. The whole trend of gamification is an example of smart people working on this problem.

If microtransactions are exacting a psychic toll on you, what would you say if instead of just unlocking the door, that paid toilet also flashed some pretty lights, played a triumphant sound, and sprayed perfumed mist into the air when you tap your credit card?

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Refined Insights's avatar

I agree that transaction costs are partly a matter of conditioning. I also think that in due course, these costs will be fairly automatic. However, there are differences between the examples you quoted and this. One is a game and the other is about literacy. This is about payments. Experiments confirm there's a pain of paying. Micro-payments likely will multiply that pain, apart from being very annoying. It will also pose significant problems to people who cannot regularly afford these micro-payments.

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QImmortal's avatar

"Experiments confirm there's a pain of paying. Micro-payments likely will multiply that pain, apart from being very annoying."

Experiments confirm there is pain of paying only in the specific situations they set up in the experiments. It's far from clear that this pain exists always and everywhere. The very existence of games revolving around transactions provide evidence that this pain of paying either doesn't exist in certain circumstances or can be negated by other features of the environment.

As for the annoyance, that seems like a temporary problem. Right now, things like in-app purchases in games often feel like they've been bolted on by the game company's accounting department, breaking your immersion, opening a separate window to a website, and asking you to fill in information and agree to various terms. It doesn't have to be that way though! Someday, functionality as smooth as Amazon's one click ordering or Applepay will be embedded right into game engines and similar levels of seamlessness will exist everywhere else.

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Refined Insights's avatar

Yes, I do think it's possible to counteract that pain. However, it's still possible to replace pain with distraction. A lesser problem but still a problem.

I think eventually they will become like app notifications. Something you can turn off and which doesn't require your permission so is fully automated.

That way, you can still check if you want to, but I wager most people won't.

The only way people will massively shift to micro-payments though is if they are cheaper than say subscription.

If not, and since any price is not as cheap as free, it might fall away.

Also, web3 has to be about more than just facilitating a new payment system.

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CraigMichael's avatar

Micropayments are awesome and will change business incentives to make things affordably entertaining instead of addictively engaging. There will be new economies for creatives. https://craigtalbert.medium.com/responses-to-common-criticisms-of-micropayments-544cd2cedf19

I wrote the above Medium years ago responding to the stale arguments against Micropayments, and will likely write a new update to respond to some of your fresh arguments against micropayments.

Really all anyone has to do is go back to the reasoning behind royalties in project Xanadu. Ted’s parents were both screenwriters and knew how easy it was to steal words and not pay the creatives behind them. Web 2.0 is either (1) keep stealing those words and/or (2) mostly steal the words, but encourage people to write things that will maximally annoy the out group and righteously outrage the in group… then pay them a fraction of what they would have made otherwise.

That’s is the dystopia. Micropayments are a way out.

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Harold Omnifuture's avatar

I'm more in Noah's camp: I don't want to gamify my day-to-day life. I already have enough issues, I don't need direct, explicit feedback reminding me of each and every way I'm losing money. I also want cost certainty so I can plan more than 1 paycheck ahead.

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CraigMichael's avatar

I don’t see how these are counter argument to my points. Paying 27 cents for an article maybe 1-3 times a day gamifies your day-to-day life? how? It would removes cost certainty? How? The direct explicit feedback of a vending machine never seemed to bother we anyone.

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thisgoesnowhere's avatar

Wait, you believe that micropayments would help with the polarization of politics?

If you could only view articles that you paid for and you had to decide based on the price/title/snippit wether you wanted to read them, then wouldn't increase the incentives to polarize?

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CraigMichael's avatar

I do. Low-quality outrage porn journalism increases polarization and is what’s demanded by engagement-driven economics.

If you instead make better journalism more lucrative, you will still have disagreements and fighting but you will have better quality disagreements and fighting, which is really what we all want of you think about it.

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Tran Hung Dao's avatar

The entire casino, gambling, and gaming industry (which is much, much bigger than Hollywood + TV) doesn't seem to support the claim that micropayments would cause a shift away from creating addictions.

So I guess I'm not really following your argument. Can you expound?

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CraigMichael's avatar

Market size of entertainment industry is 221 billion. https://www.statista.com/statistics/1174737/arts-entertainment-recreation-industry-market-size-us/

Market size of casino industry is 40.9 billion. https://www.statista.com/statistics/1174152/casino-hotels-industry-market-size-us/

So I’m not sure if I agree with the premise, but also not sure if it matters.

One important difference here is that gambling is regulated. When you walk in to a casino, you know what you’re getting in to. Part of the problem with engagement is that (1) it’s not regulated and and there’s no one to negotiate with you only your behalf (2) for the vast majority of people, you don’t need to gamble to be relevant in journalism or tech (Twitter) or have a network of friends (Facebook).

There might be a way to get around gambling regulations with crypto in general, but that’s a general crypto issue not specifically a micropayment issue. I will agree to that extent there’s an issue. I have deep misgivings about government regulating crypto meaningfully well. The only advice I have there is to work cooperatively try to make the inevitable regulation suck as little as possible.

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Edward Scizorhands's avatar

I get the fear of having to micropayment everything, but the alternative of having "free" stuff where we are sold off to advertisers might be even worse.

Some browsers let you distribute money to the websites you visit, automatically. That could be the better way forward.

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nei's avatar

We already live in a world of ubiquitous micropayments. You just pay with your data. Data that Facebook undoubtedly shares with the CIA, FBI, NSA, you name it.

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