Peppercoin is a

cryptographic Cryptography, or cryptology (from grc, , translit=kryptós "hidden, secret"; and ''graphein'', "to write", or '' -logia'', "study", respectively), is the practice and study of techniques for secure communication in the presence of adve ...

system for processing

micropayment A micropayment is a financial transaction involving a very small sum of money and usually one that occurs online. A number of micropayment systems were proposed and developed in the mid-to-late 1990s, all of which were ultimately unsuccessful. A s ...

s. Peppercoin Inc. was a company that offers services based on the peppercoin method. The peppercoin system was developed by

Silvio Micali Silvio Micali (born October 13, 1954) is an Italian computer scientist, professor at the Massachusetts Institute of Technology and the founder of Algorand. Micali's research centers on cryptography and information security. In 2012, he received ...

and

Ron Rivest Ronald Linn Rivest (; born May 6, 1947) is a cryptographer and an Institute Professor at MIT. He is a member of MIT's Department of Electrical Engineering and Computer Science (EECS) and a member of MIT's Computer Science and Artificial Intell ...

and first presented at the RSA Conference in 2002 (although it had not yet been named.) The core idea is to bill one randomly selected transaction a lump sum of money rather than bill each transaction a small amount. It uses "universal aggregation", which means that it aggregates transactions over users, merchants as well as

payment service provider A payment service provider (PSP) is a third-party company that assists businesses to accept electronic payments, such as credit cards and debit cards payments. PSPs act as intermediaries between those who make payments, i.e. consumers, and thos ...

s. The random selection is cryptographically secure—it cannot be influenced by any of the parties. It is claimed to reduce the

transaction cost In economics and related disciplines, a transaction cost is a cost in making any economic trade when participating in a market. Oliver E. Williamson defines transaction costs as the costs of running an economic system of companies, and unlike produ ...

per dollar from 27 cents to "well below 10 cents." Peppercoin, Inc. was a privately held company founded in late 2001 by Micali and Rivest based in

Waltham, MA Waltham ( ) is a city in Middlesex County, Massachusetts, United States, and was an early center for the labor movement as well as a major contributor to the Technological and industrial history of the United States, American Industrial Revolution ...

. It has secured about $15M in venture capital in two rounds of funding.Micro-payment's Peppercoin Bought Out
Its services have seen modest adoption. Peppercoin collects 5-9% of transaction cost from the merchant. Peppercoin, Inc. was bought out in 2007 by Chockstone for an undisclosed amount.

References

{{money-stub Financial services companies established in 2001 Financial cryptography Payment systems