With the launch of Paymail it is now possible for people to send money to names (“paymails”) rather than long, random character strings like Bitcoin addresses. Paymails are much easier people to remember and to write down than addresses. It is a huge improvement to the user experience.
Paymails are the username system of Money Button. Although many people in the real world can have the same name, two people can’t have the same paymail because they are used as an identifier to send money. You need to be sure you are sending money to the right person. This means paymails must be unique.
If paymails were free, this would give bots a way to game the system by registering many fake accounts to squat names. Although users don’t usually notice bots, they are a huge issue for administrators of social networks. Social networks are often attacked by bots that register many fake accounts to squat names and perform other nefarious activity. This has happened on Yours.org, the predecessor to Money Button, and it will happen on Money Button unless we take preventative action.
To deter name squatting by bots, we have set a price floor on paymails of $1.00 USD. This means you have to pay $1.00 to purchase a paymail. We believe $1.00 is low enough that most people will be willing to pay to get the name they prefer by simply buying it. This is far lower than most other naming systems, like domain names, which usually cost at least ten times more per year and have to be re-registered annually. Paymails only have to be purchased one time and the user owns it forever.
This small fee is sufficient to deter most bots from registering names. On most social networks, registering 10,000 fake accounts costs almost zero. But on Money Button, that would cost $10,000, which is a significant sum for bot owners. So long as the price of a paymail to the attacker is higher than than the benefit they get from squatting it, the attackers will not be able to register too many names before they run out of money.
It would be unfair to ask user to have to pay to register their own name, assuming they can prove what their name is. Therefore we also allow names to be registered with social authentication at a reduced cost. If you can prove ownership of a name on an existing social media application (Twitter, Instagram or Handcash), and that name hasn’t already been registered, you can register that name for only ten cents. That is a negligible cost for most people, but would still be expensive for bots if they tried to register many social accounts just to acquire Money Button paymails for cheap.
Money Button realizes the market solves many problems better than we can. The price of $1.00 is just an educated guess. What is the true cost of a name? Should it be higher or lower? The best answer is for people to buy and sell names and for the price to be determined by the market. Because names are unique, they should each have a unique price determined by the owner. Therefore, we allow users to re-sell names to other users. Money Button takes 30% of the sale price.
We believe by creating a market for paymails that we will radically reduce squatting and fake accounts. Although it is true that people can still register other people’s names, they actually have to pay for them. This is important because these people will run out of money unless they can convince the true owner of the name to purchase the name from them. These people are not name squatters, they are name brokers. Their incentives are aligned with getting the right names to the right people, exactly like how the market handles distributing resources of any kind.
To the best of our knowledge, we are the first social network to build a market for names to solve the bot problem. This is not the first time we are a pioneer in the area of building a market of information. Two years ago we got a lot of attention for building the first social network that charged a small fee of 10 cents to post content. The reasoning behind that decision was very similar to this one: the goal was to decrease spam. It was extremely effective and nearly completely eliminated spam from the platform. We believe the market for paymails will have the same beneficial effect of deterring bots from creating fake accounts.