Instant Tipping Network

ITIP (Instant Tipping Network) is an open standard for (micro)payments built to be simple and transparent.

ITIP makes it very simple for individuals to contribute with whatever value they feel appropriate to any ISS/IM entry by creating a channel of intentions. These intentions are aggregated until the individual decides to make the donation.

Recipients may also aggregate the donations received from several individuals until it eventually adds up to a reasonable amount.

The process is totally transparent because the intentions, the donations and the receipts are all registered in multiple ISS/IM channels that are crosslinked.

This way, ITIP helps authors to receive contributions from donors everywhere to further develop their work and ideas.

Use Case

Each ISS/IM entry carries some metadata with it. This includes the entry ID, the original author, and its WebOS. The ITIP metadata is used to configure donations. If this metadata is set, a donation widget appears in the toolbar, allowing the user who is reading this entry to make a donation.

These metadata are preserved when the entry travels from one WebOS to another. They are useful, for example, to help the WebOS identify if a particular entry has already being received. This is common because good entries will likely be recommended by multiple friends. Receiving the same entry from multiple people also helps the WebOS to identify if the metadata has been tampered.

The figure below shows how ITIP works. We have a donor at one side, and a recipient at another, each one with their respective channels. The Certifier helps to intermediate the donation process.

When a user likes an entry, he has the option to syndicate it, and also to make a donation. The design of the donation widget is totally open. Users may choose a specific value (such as one dollar, for example) or even use a star system (1 to 5 stars). The donation widget populates a system channel called Intended, which normally does not appear in the tagCloud of a user. This channel collects intentions of donation. For example: 2 stars for entry A from user X, 4 stars for entry B from user Y, 5 stars for entry C from user Z, etc. The objective of this channel is to make donations fast and flexible. Fast because each donation (or each intention of donation) does not trigger a transaction process which might be slow. Flexible because these are just intentions for now, and the Donor may decide the final value of the donation later on.

After some period of time (at the end of the month, for example), the Donor can finally make the donation. The actual donation process is handled by a Certifier. The objective of the Certifier is to help with the transaction, and not to become a middleman that charges extravagant fees for every single transaction. These Certifiers are affiliated with the non-profit StarCloud Society and act in different countries using the local currency.

The Donor decides to donate a total of 100 dollars this month. Since he uses the star system, the 100 dollars gets distributed to all entries in his Intended channel for this month according to the number of stars. An entry with 4 stars will receive twice the value of an entry with 2 stars. This payment is made to the Certifier, which generates an ID for each individual donation. These IDs are published on the Donor's Donated channel and on the Recipient's Received channel. The Recipient may contact the Certifier in her country to collect the donations. The amount from each donation might be small, but the sum of theses donations might add up to a reasonable amount.

Final Remarks

The idea of micropayments is not new, and adopting a standard was even considered in the early days of the Web. However, the transaction costs associated with each micropayment has turned the idea impractical.

The idea has recently made a comeback, specially with the success of crowdfunding. Crowdfunding refers to the collective effort of individuals to fund and support a cause.

The transaction costs associated with each micropayment are still an issue, but by aggregating these micropayments and performing a transaction only on the collective allows to minimize the overhead.

ITIP adopts this strategy to minimize the transaction costs not only for Donors and Recipients, but also for Certifiers. Donors and Recipients perform transactions only periodically, when the transaction overhead becomes low. Certifiers manage these transactions from individuals on a local level, and on a global level perform international transactions only periodically as well. By minimizing real transactions and handling everything electronically, Certifiers avoid transfering funds back and forth accross boundaries that in the end may cancel each other out.

ISS/IM and ITIP combined promote not only the dissemination of information, helping it reach the right public by word-of-mouth, but also the dissemination of wealth, helping authors to receive contributions to further develop their work and ideas.