Re: W3C Web Payments Use Cases 1.0 first public draft

Hi Melvin, Steven, (CC: Web payments IG)

Ripple Labs are co-ordinating the formation of a Web Settlement Task Force
as part of the Web Payments IG. The purpose of this task force is to
identify a way to realise what we are calling, the Value Web or Internet of
Value. We want to ultimately get to a place were we are not simply
exchanging messages and promises online but exchanging real value.
Obviously value can't be digitised and sent across the wire so what this
really translates to is immediate, final and irrevocable settlement as a
final step in the payments process.

In parallel to the other work being done in the IG, which is mostly focused
on using Web technology to integrate existing legacy payments systems and
making it easy for payments to be done on the Web, I'd like the Settlement
TF to be thinking about how we can build standards around immediate
settlement systems (of which I'd consider the Bitcoin ledger one). This
means getting a wider variety of contributors and voices than just Ripple
Lab's as part of the TF. I'd certainly value your contributions and ideas.

The plan is to spend the build-up to the Web Payments IG F2F in June to
recruit contributors and agree on a plan of actions for the F2F itself and
some sort of roadmap for the months ahead.

I'd be interested to hear your thoughts on this initiative and hear from
anyone that would like to be involved.

Adrian

On 18 April 2015 at 12:55, Melvin Carvalho <melvincarvalho@gmail.com> wrote:

>
>
> On 18 April 2015 at 06:16, Manu Sporny <msporny@digitalbazaar.com> wrote:
>
>> On 04/16/2015 08:21 PM, Steven Rowat wrote:
>> > I admit my reasoning there seems a bit speculative (in fact,
>> > hot-headed), and towards the conspiracy theory end of the continuum
>> > -- but, now Melvin's come back with some data that supports it; thank
>> > you. ;-)
>> >
>> > And even having calmed down, I'm still thinking that shunting off
>> > the simplest A->B payments between two people as 'Future Work' is a
>> > mistake (and a slightly suspicious one).
>>
>> Let me try and explain why those of us that are involved in this work
>> are nervous about working on peer-to-peer payments.
>>
>> The Web Payments IG is still working through the person-to-person
>> payments scenarios. The technology for p2p payments is incredibly
>> simple, but the regulation around it is fantastically complex and
>> expensive to comply with. The price for misreading the regulation is
>> extremely steep. You can read more about it here:
>>
>> http://en.wikipedia.org/wiki/Money_transmitter
>>
>> Here's why work in the area is going slowly:
>>
>> It is a felony to engage in money transmission without a license in any
>> state that requires a license to operate.
>>
>> I remember being a speaker at a conference with Charlie Shrem keynoting
>> a few years ago. A year later, Charlie was in jail. Granted, he also did
>> some other shady stuff, but one of the charges filed against him was
>> operating without a money transmission license (aka doing peer-to-peer
>> payments w/o being licensed to do so).
>>
>> There are really no other technologies that W3C is working on where a
>> mistake can land you in jail. Accidentally inject a bug in HTML5 -
>> people get angry. Badly designed feature for CSS3? Developers are
>> annoyed. Botch a crypto implementation - millions of dollars in damages,
>> but not much else. Screw up the deployment of peer-to-peer payments at
>> your organization? *Felony and jail time*.
>>
>> When you say you're going to work on "peer-to-peer payments", what
>> you're really saying is: "I'm going to try and work on this problem
>> knowing that there is a possibility of someone I'm working with (or me)
>> ending up in jail."
>>
>> Personally, I imagine being ripped away from my wife and two young kids
>> for writing a spec, a couple hundred lines of code, and deploying it
>> into production... and all the program did was move a virtual thing from
>> one ledger to another.
>>
>> So, that's what's in the back of some of our minds while working on the
>> peer-to-peer payments stuff... and that's why it's going slowly. We
>> don't want to make a mistake.
>>
>> That said, many in the group want to see peer-to-peer payments succeed.
>> The Use Cases document has clearly put Bitcoin (a peer-to-peer payment
>> mechanism) in there as something that we want to support:
>>
>>
>> http://www.w3.org/TR/2015/WD-web-payments-use-cases-20150416/#cryptocurrency-payment-bitcoin-ripple
>>
>> So, it's in scope and we're trying to move on it as fast as we can. The
>> problem is in deploying it into production. In order to do that at any
>> kind of significant level, you need a heavily capitalized organization
>> (like a bank) that's willing to deploy a new payment system and take the
>> regulatory heat (tens of millions of dollars in fines) when things go
>> wrong.
>>
>> Purchases are far less heavily regulated and much easier to standardize
>> and put into production without risking jail time or stratospheric
>> fines. That's one of the reasons the group is gravitating towards those.
>> The other reason is that purchases constitute far more economic activity
>> than peer-to-peer payments do.
>>
>> Steven, I suggest you tell the Web Payments IG that you think that the
>> group is making a mistake by not taking peer-to-peer payments more
>> seriously. It'll be a review comment, and per W3C process, we're very
>> strongly urged to respond to you. That will force the Web Payments IG to
>> have a discussion about it, on the record, and get back to you.
>>
>> http://www.w3.org/2014/Process-20140801/#wide-review
>> http://www.w3.org/2014/Process-20140801/#formal-address
>>
>
> Thanks for the perspective, Manu.  I suspect satoshi had similar concerns
> with bitcoin.  But we've seen bitcoin get more mainstream acceptance, with
> even the NYSE making it's first investment in over 100 years in that
> space.  A quote from Harvard professor and former chief economist of the
> world bank, Larry summers:
>
> “The price of handling bits [of data]has come down by a factor of 10,000
> fold over the last generation; it’s high time that the costs of payments
> processing fall by a factor of even two,” says former U.S. Treasury
> Secretary Lawrence H. Summers. “Bitcoin offers the prospect of necessary
> and important disruption in finance for the benefit of buyers and sellers
> rather than financiers and middlemen.”
>
> I would argue that the web offers the same potential.  It's possible to
> misuse, for example, blogging software, which uses specs such as HTTP, but
> the authors of the blogging software, or specs should not be liable.
>
> Regarding regulators, those I have spoken to, want to see innovation
> driving down costs, particularly in areas such as remittance which has
> average 9% transaction fees.  This would help some of the poorest people in
> the world.  When sending money home to help your family (perhaps even in a
> life saving way) you're not purchasing anything.
>
> If regulation is an issue, or causing a chilling effect, I would suggest
> working with bitcoin testnet coins, which are designed to be worthless, but
> have all the technical properties of crypto currencies, and none of the
> risks.
>
>>
>>
>> HTH,
>>
>> -- manu
>>
>> --
>> Manu Sporny (skype: msporny, twitter: manusporny, G+: +Manu Sporny)
>> Founder/CEO - Digital Bazaar, Inc.
>> blog: The Marathonic Dawn of Web Payments
>> http://manu.sporny.org/2014/dawn-of-web-payments/
>>
>>
>