With AI I am reconsidering my stance on micropayments.

I recently loaded up a few dollars on Deepseek to try it out, and the value I got out of it far surpassed my balance lost (tens of cents). If this is a sustainable business model for Deepseek (I'm not sure yet), then this shifts the economics: in this scenario I feel totally fine paying pocket change for something valuable.

We already know google's searches cost orders of magnitude less than serving an AI model, so there is no reason to believe micropayments couldn't work there too. Of course, advertisements make Google a lot more money than micropayments, so they never tried it, but I suspect that while they might not work in all scenarios they are underexplored as a monetizing strategy.

I feel like website owners could band together and along with search engines figure out tiers for people viewing their content (free, minimal fee, larger fee, etc).

And some publishers would choose that, others would form different coalitions and say: get a subscription and you get access to xyz content, just like with streaming etc. It would need cooperation, so maybe the idea is already dead in the water, but the web being the realm of advertising is not set in stone.

I like the idea of micro payments, but I don't think they'll take off versus existing ad/subscription models. The problem is economics: the vast majority of people are simply unwilling to pay even a cent. Part of this is people don't know the brand to feel comfortable spending money on random sites (I recall a comic where a user was deliberating heavily on a $0.99 app after easily buying a $7 coffee). Part of this is also the shape of the economy where most people just don't have spare income.

The fraction of people who are willing to pay a cent are likely to be willing to pay considerably more. It is much, much more lucrative to get those people into subscriptions, where they will keep buying -- potentially for years.

So for most businesses, they'd likely earn less revenue via micro payments, which means it's unlikely they'll get widespread adoption.

This is the kind of “better internet” I want. Compared with ads, I’d much rather have a 0.05 dollar paywall.

But for this to work, the technology has to be built on crypto micropayments. The total cost and friction of traditional payment systems, including online payment services like PayPal, would make this impossible. I think this is also one of the design goals behind Web3 and Project Xanadu.

https://en.wikipedia.org/wiki/Project_Xanadu

https://cloudflare.pay/