Rumors are flying that Amazon wants to get a share of the video download box office and will announce an iTunes competitor soon.

It makes sense for Amazon to sell full length DVDs as well as downloads including videos. And with Amazon's stock of customers and ecommerce platform, it shouldn't be hard for them to reach iTunes level of video sales.

These video services would really benefit from a micro payment system, bulk discount, or subscription fee arrangement to reduce transaction costs. Processing payments 99 cents at a time is less than efficient, even in electronic commerce.

As consumers we have two contentious demands for our online identities. We want to eliminate the painful task of registering for sites and remembering dozens of passwords to engage in online commerce. But we also want to make sure that it is impossible for that information to go outside your network of trusted partners.

Dick Hardt of Sxip.com makes a great argument for the need for a digital identification company to create an online counterpart to passports and drivers licenses. Instead of individuals filling out forms and using passwords at every commerce site, we would "show" a digital ID from a third party that would verify who were are to all of the sites that we visit.

The "Identity 2.0" is an important concept, but every potential organization that might handle this responsibility (banks, technology companies, government) has serious issues of trust to overcome.

The other issue how to protect this ID once it is established, and that's where encryption systems such as IBM's Anonymous Resolution project could come in handy. This "one way encryption" could create ID's that hide the details (address, phone etc) about individuals while verifying who the person is. IBM says the technology can be used to look for a person's match between databases anonymously.

Related to this is the ability to turn off our digital ID and sometimes surf anonymously, which the recent brouhaha over government and the search engines brought into the public eye. Services such as Anonymizer and the Tor effort could gain traction with consumers while driving marketers nuts by preventing demographic information from being collected.

This problem needs to be solved in the next few years to achieve a balance between Big Brother and personal privacy.