On Sunday, November 18, 2001, at 10:44 AM, dmolnar wrote: > Hey, > > The recent comments on Mojo Nation prompted me to look at their site > again. I don't see much guidance on how to set prices for network > services. There's a mention someplace that business customers will build > pricing schemes on top of Mojo Nation, but not much indication of what > these schemes might be. > > So what is the "right" way to price resources? (Preferably beyond the > obvious "supply and demand.") > > Fleet announced at Hettinga's DCSB that they were developing some kind > of > spare resource market. I couldn't make it. Does anyone know whether they > addressed this point? > > A related question - I ran into a friend of mine who had just finished > an > internship in options trading. He suggested it might be worth looking at > options on spare disk space or other resources, as a means of figuring > out > how to make Mojo-type systems eventually profitable in the real world. > Now > I have a copy of Natenberg's _Option Volatility and Pricing_ to look > at...
First, your "right way to price resources?" question is part of what economists call "price discovery." There's the usual stuff about auctions of various kinds (Dutch, reverse, etc.), but basically it boils down to charging as much as the traffic will bear. (Particularly appropriate terminology in this case.). One knows the right approximate price for a used car, because of past experience, classified ads in newspapers, Blue Book guides, etc. But still there is price discovery for a particular car. But how to price a Picasso? Even with liquidity-assisters like Christie's and Sotheby's, price may vary from x to 5x, depending on current trends, fads, and moods. Second, Mojo-type systems are a "thin" market. Few players, few comparisons. Worse than Picassos, in general. Personally, I wouldn't waste a millisecond looking at options pricing models. That'll be more about Black-Scholes and how DPV calculations of made of the present value of future streams of revenue, blah blah. Third, and needing a lot of exposition to explain, there's the issue of _what_ is being sold in systems like Mojo. Napster succeeded, for a while, because it required absolutely no education in what was being downloaded and how to do it: just download Napster with a click, fumble around with the various "Connect to:" buttons, type in "Light My Fire" or "Blink 182" and FREE STUFF!! started appearing on your desktop and even playing through your speakers! No muss, no fuss. Any system involving units of Mojo, or understanding of auction models, etc. is hampered. And any system that has only a tiny fraction of what Napster had at its peak is hit with the "So what?" factor. And the Fax Effect kicks in--few users, not as many options, stagnation. (For example, there were Napster clients on the Mac early on. Now, between much less being offered, and the legal issues, there is no Morpheus client for the Mac. Mactella is a Gnutella client, but when I fire up Mactella I get a) no songs of interest, ever, and b) incredibly slow and inconsistent performance. In other words, Tim Sixpack has given up for now on Mactella/Gnutella. Presumably the same is true of Freenet, Mojo, etc.) Are there things that are of value in cyberspace and that could use black markets for trading? Sure. We have cited examples for years, and not just of things like child porn. A venture located in San Mateo (Napster) or Mojo (Palo Alto??) or Montreal (ZKS) has obvious limits on what it can offer or publicize. This is the obvious limit of all systems seeking to provide a market for things or services but also have a nexus of control, identification. (Side note: While I have nothing against people making money, I think way too many of these services have sought to make money on IPOs...kind of like having the counterculture in the 60s forming a corporation, staffing up, installing hot tubs and espresso bars, and buying Herman Miller chairs for employees. Duh.) Are there better models? Sure. Oft-discussed over the years. Think small. Think vertical. Think about moving out of the "millicent ghetto." Think about who will spend the time and money to use untraceability techniques. It ain't Joe Sixpack, for multiple, obvious reasons. Look, I'm cheered by the reaction to my "Crypto Winter" essay. Especially from some communications I've had in private, and from contributions like this one above from Dave Molnar. (The expected "Cypherpunks got it all wrong" comments from folks like Nomen Nescio/Morlock Eloi/George@rwellian I expected. Cheap shots from unoriginal thinkers.) But it seems to me that way too many people have been caught up in the mundane...the worries about "selling" crypto to Joe Sixpack, the devolution to a 1993 state of crypto integration (*), and the banality of most discussions. Read the archives to see how banal most of these discussions of "monkeywrenching" airport security are! (* The focus on integrating crypto into mailers is a repeat, ad nauseum, of past mistakes. Sure, it might be nice to have PGP integrated into every mailer. It was a goal of some in 1992, in 1993, and so on. And it works...for a while. Some version of PGP gets integrated into some version of Eudora...then it breaks, the plug-ins stop working, and the folks who did the integration have moved on to some other project. Or someone says "Use Outlook Espresso because it has the only good integration of GPG 8.42!" Feh. There are too many diverse mailers, too many versions of PGP/GPG for this ad hoc integration to work. This is the opposite of the "small tools" approach of Unix--which is also accessible to Windows and Mac users through the "text" approach. For example, through the clipboard approach...which is what I usually use with PGP anyway. This works with multiple mail systems, word processors, page layout programs, etc. No complicated logistical teams to work on integration...part of what sunk PGP, Inc. was needing the funding to support staffs of integrators and facilitators and lobbyists....) As an antidote to this banality, this devolution to the topics of 1993 (actually, not even the _interesting_ topics of '93), I could suggest "read the archives." But I'll do something different, though reading the archives remains a good thing to do for those who haven't. Suggestion: Read Hakim Bey's "TAZ" (Temporary Autonomous Zones) book or article. The Ludlow book, "Crypto Anarchy, Cyber-States and Pirate Utopias," available in all major bookstores, has it. Refreshing reading. Densely-written, with no doubt some mixture of LSD-inspired flights of fancy, but a better snapshot of where we're going, and "why we fight," than the crap in physical Cypherpunks meetings about working with the local police to help police cyberspace and the shit about getting graduate degrees in "Policy" so that burrowcrats in Washington can be lobbied more effectively. (Hint: Faustine, especially, should read "TAZ." And "True Names." And "Ender's Game." And the archives. And the Cyphernomicon. Get beyond the fog of the mundane and see where the degrees of freedom of the Web will take us.) I'm happy to hear Declan say that the D.C. group is contemplating a name change to something more "cuddly" and less in-your-face. No doubt something like "CryptoRights." Anyone here even _know_ of any D.C. list members, _except_ Declan? Anyone remember any contributions here in the past four or five years from anyone there? I don't. I made a rare trip to the D.C. area in the summer of 2000 and tried to see if there was any interest in a small gathering. None. One person said he might be interested, but that traveling the 30 or 40 miles from Baltimore was too much work. (I guess my traveling 60 miles over mountain roads to get to Palo Alto meetings, and 100 miles to get to San Francisco or Berkeley meetings, is foolish.) If there _is_ a D.C. Cypherpunks group, could've fooled the rest of us. Feh. --Tim May "As my father told me long ago, the objective is not to convince someone with your arguments but to provide the arguments with which he later convinces himself." -- David Friedman
