The pennytoken specification aims to define a micropayment standard that provides an immediate benefit both to the content providers and the consumers. The goal is friction-free cross-provider consumption of online media and other services.

By forcing interoperability, it tries to prevent lock-in effects as well as a harmful fragmentation. It also leaves room for competing operators to differentiate.

Specification

The specification can be found here.

The actors

Three types of actors interplay during a micropayment transacting.

  1. The content creator: For example the operator of an online news website.
  2. The user: For example a person browsing the internet, consuming media content on different websites.
  3. The micropayment service provider: He is paid by the user and pays the content creators according to usage. Here is a live demo of such a provider.

Design goals

  • Works across an unlimited number of content providers.
  • Avoid user tracking.
  • Easy implementation for the content providers.
  • Pay-per-view for prices comparable to advertisement revenue.
  • Frictionless user experience. No registrations, no subscriptions, no logins.

Design limitations

  • The user must install a browser plugin that implements the specification.
  • The content provider must be trusted regarding issues such as money laundering.
  • The micropayment provider is theoretically able to track which websites are visited by the users.

Working Principle

The micropayment provider sells secret tokens to the user. Like poststamps. The user’s browser sends one or more of these tokens with the http request, for example by appending them to the url of a GET request. The content providers verifies and thereby cashes in the secret token with the micropayment provider. This can happen synchronously before serving the content. The content provider then responds to the http request and serves the for-pay content. The micropayment provider regularly sends payments to the content provider corresponding to the total value of the cashed in tokens.