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Re: W3C Web Payments Use Cases 1.0 first public draft

From: Steven Rowat <steven_rowat@sunshine.net>
Date: Sun, 19 Apr 2015 12:43:10 -0700
Message-ID: <5534054E.5020001@sunshine.net>
To: public-webpayments@w3.org
Thank you Manu, Melvin, and Adrian,

Your considered comments are much appreciated. Taken together, they've
prompted me to consider this issue at a broader level. In particular,
you've said:

> Let me try and explain why those of us that are involved in this
> work are nervous about working on peer-to-peer payments. ...[snip]
> It is a felony to engage in money transmission without a license in
> any state that requires a license to operate. ...[snip] 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...

> 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,” ... “Bitcoin offers the prospect of
> necessary and important disruption in finance for the benefit of
> buyers and sellers rather than financiers and middlemen.”

> 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.

This all prompted several thoughts:
Maybe we're at the nexus of a paradigm shift that includes all of
what used to be called "Political Economy" -- before there
were separate academic disciplines for "Political Science" and
"Economics". Perhaps splitting them was an error; we seem to have
them joined at the hip again as they face a new revolution.

As in: immediate settlement of value (@Adrian) disrupts not only
financiers and middlemen (@Melvin, Summers statement) but governments.
Or more correctly perhaps: governments are also middlemen and included
-- but very big powerful ones whose backlash is mighty (@manu). And
their reasons for their decisions are not just financial, but include
moral/ethical problems (terrorists, taxes for the public good, etc.)

This leads to my remembering the following quote, which is from a
famous book by Kuhn that you may all know ('The Structure of Scientific
Revolutions'), but I believe the quote is particularly germane here, as
a comment on all of the above: --It's actually Kuhn quoting Max Planck
-- in science, it doesn't get any more canonical than this:

"...Max Planck, surveying his own career in his *Scientific
Autobiography*, sadly remarked that "a new scientific truth does not
triumph by convincing its opponents and making them see the light, but
rather because its opponents eventually die, and a new generation
grows up that is familiar with it.[ref]"
[ref: Max Planck, *Scientific Autobiography and Other Papers*, trans.
F. Gaynor (New York, 1949), pp. 33-34.]

I suspect that this insight also holds for technologies, money
systems...(and religions, but we don't need to go there, thankfully).

I also suspect that the blockchain/ledger is providing such a core
level paradigm shift. And if so we can expect pretty much a whole
generation of entrenched people to ignore, fight, criticize, belittle,
and prosecute it during their lifetimes.

If so, then Manu is right to worry about going to jail...and, not
necessarily right to stake a great deal on getting the two paradigms
to play nicely together, which may never happen. One may merely
supplant the other as the appropriate people retire or die out.

And in terms of Adrian's request for Melvin and I to become part of
the conversation of the Task Force in the IG at the W3C... my response
is similar. I had an experience with the W3C several years ago in
which I was bruised by a similar entrenchment -- because after all W3C
is funded (and the HTML5 committee I was submitting to was chaired) by
the large companies profiting in the old paradigm.

So I don't expect a conversation around the P2P payments and the more
revolutionary aspects of the blockchain (universal voting, tax-free
money transfers) to flower in W3C -- at least not at the core level of
disruption that these things are likely to bring to our society.

And there's also a part of me that accepts this, that says: "none of
us really know if the new paradigm is in fact superior." What money I
have is still in banks. ;-)

And the owner of my local health-food store, a rash and progressive
young man (he accepts bitcoin, and even has a bitcoin dispenser
machine beside the cash), was telling me yesterday that two years ago
he had lots of people paying with Bitcoin -- and then it all stopped,
and no-one has bought anything in Bitcoin in the last 9 months.

So even if it's a paradigm shift, it's not clear that it's in
currency, or even in money. It may be in decision-making of some form
(which money can be used for), but what form? Will those of us who
grew up in the old paradigm even understand it -- even recognize it
when we see it? Even Einstein rejected core aspects of quantum
mechanics that are now the accepted paradigm. ;-)

Steven Rowat

> 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
> HTH,
> -- manu
Received on Sunday, 19 April 2015 19:43:36 UTC

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