Smartlike as a micro-donation processor for Fediverse

Hi,
I believe there’s no need to explain the importance of integrating payments into Fediverse. And everybody would probably agree that the standard should be open and support multiple processors for users to choose from. Let me introduce one candidate in the hope to see your comments and criticism.

We are building a free non-profit decentralized donation processor with a focus on freedom, privacy and efficiency. The service employs a hybrid from trusted relationships between creators and their audience for private and secure end-to-end payments and trust-less horizontally scalable public ledger technology for transaction processing without cryptocurrency (details).

These are the key elements, in short:

  • Distributed transaction ledger where signed transactions are chained and validated, think redundant validating BitTorrent or distributed hash table, similar to Holochain. Consistency is maintained by users, not miners.

  • Decentralized payouts: to enable one-click micro-donations (min $0.01) without commission, I first send a regular donation of, say, $10 in cash to one of my favorite trusted bloggers or charities, they acknowledge the receipt by filling my Smartlike account with the exact same amount resulting in +$10 on my Smartlike account, -$10 on their Smartlike account. Creators accumulate micro-donations and turn them into money by helping donors fill their accounts. A cycle with zero system balance. The payout is automated via the payment gateways. Better privacy is achieved by decentralizing these exchange points where user billing information could potentially be connected to accounts. - My trusted blogger would never modify gateway software to spy on me and I can securely spread micro-donations without much risk for my political, sexual or other preferences to be leaked and exposed to public. Most popular currencies and payment methods will eventually be supported (there’s only PayPal for a start). Currencies are automatically converted according to the current exchange rates with double float precision without any commission. Exchange rates are determined by the community consensus.

  • Decentralized governance - as soon as the system goes out of beta, the control is transferred to the community, the system will be further developed as FLOSS and governed by a meritocratic user consensus.

Regarding proposing changes to ActivityPub, I’m still very new to Fediverse and a well-thought FEP would require more time - experts here would know it better. I’ll just attach my first thoughts to start discussion:

  • Multiple payment addresses on actor and a transfer activity for accounting within Fediverse, e. g. to display donation accumulators along content? In the first experimental relay I used ActivityPub keys to minimize user efforts when making spontaneous micro-donations on PeerTube and Mastodon. Separate keys can be used for better security.
  • BTW, you probably already work on further decentralizing the protocol along the web3 trends, don’t you? To secure account ownership so that users don’t lose their accounts when instances disappear, for example. A distributed hash table similar to one mentioned above would work, where instances serve some redundancy for the network, cross validate each other…
  • Social networking protocol without moderation metadata - the existing per-instance moderation doesn’t seem to provide adequate quality and leads to fragmented federation. Please take a look at the decentralized crowdsourced moderation we implement. I wonder if something in the art could work for Fediverse. Smartlike moderation and tag metadata can be used as well - all our data is public.

Thank you for your comments.

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Thanks for the description

This is a good start IMHO

I suppose the initial weakness is using PayPal as a trusted third party. But your design seems to be such that this is just one gateway. And that over time more can be added. The ones chosen will be important so that they act in the interests of the users, rather than, the interests of those that create the tokens

I also really like your commitment to FLOSS, and that there’s no hidden token sale behind this, as there are with many similar proposals

Perhaps if you would like to go beyond dollar micro payments you would consider the lightning network. There’s a grass roots effort behind this browser extension, and some standards work behind it:

And the lightning network in general. Perhaps you could run a lightning node. And then allow deposits and withdrawals from users, which, in turn can be used to tip others

The model of deposits and withdrawals IMHO is very under used, and would work well together with typical fediverse servers which handle a number of accounts. The server keeps a ledger of actor and balance, and on and off ramps for deposits. It then can do internal transfers, in, say a queue, which prevents double spending, without requiring complex consensus infrastructure

Thank you for the link @melvincarvalho

We’ve experimented with cryptocurrency in the first version but found it to be a poor fit for our use case.

Efficiency: modern cryptocurrencies are usually not p2p strictly speaking, but rely on intermediaries - those who issue tokens (developers), ensure consistency (miners and node/channel operators), invest and trade (speculators). They all make money from my transactions. Do I really need to pay a fee to a miner somewhere in Kazakhstan to make a donation to my favorite blogger? BTW, do you happen to know the total real cost of sending $0.01 over LN with Alby?

Privacy: some cryptos give you too little (centralized exchanges with KYC), others - too much. We want as much privacy as we could legally have so that creators don’t have problems with AML or other regulations. It is important for political parties and charities in some legislations, for instance.

Usability: KYC that is required for crypto on-boarding is still a threshold too high for many.

Freedom: We don’t want to lock users into a currency but rather abstract from money, use it as a medium, inhibit its derivative features. Let me use an example. Suppose, I’m a Guinness lover. I give a barrel to my favorite blogger next-door, he writes it on my Smartlike account an it is now nominated in barrels of Guinness. When I like a video I make a micro-donation - stand a pint to the author to thank for the joy I had - and I don’t need to worry if her account is nominated in Veuve Clicquot bottles or oysters, my lovely beer is automatically and transparently converted to whatever makes her happy. Without commission, without me or her becoming beer and wine traders or investors, without caring about the current consensus conversion rates…

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