What problems with this do you see?
What if an ISP changes the transaction to get users to send them funds?
Who pays the fee for the transaction in this case and if its on the ethereum network, you might be better off charging them btc for the access rights.
What if a company - maybe a news agency - says "now you've shown us how much you have, would you like to donate" what if they selectively do it so people who can collateralise a larger amount only get that or get another message that attempts to get them to sign over a few % before they can see the page.
How is it better than the current hash cash system? I could see it being used as well as that but can't understand how it's better.
How would you design this system?
You'd need a network of servers scattered around areas the isp serves that could facilitate this.
On second thoughts though, why wouldn't you just get them to sign a message to a crypto address with funds in it, then you only have to do one blockchain query and less algorithms need to be run - you could get the user to sign a randomly generated number with a bitcoin address and then you'd just have to query the balance on the address and the balance on the signature - as long as there's a system thst puts a cool down per address then this shouldn't be another way to ddos a server.
How would you make it so ddos packets from botnets can't share the same transaction used in the collateral?
The idea would be to make it so the collateral is high enough to stop a botnet.
Even using a $5 will be enough to stop servers from being overwhelmed afaik (as long as the isp and the Webserver have good congestion management).
What potential hurdles are there?
Would this technology be used by the ISP for good?
This would have a huge privacy tradeoff and might not be used for that reason or there may be considered unsafe or untrustworthy by users.
Cryptocurrency is probably difficult for the average person to understand still and making them hold on to crypto could get them to use it and lose it (eg accidentally sending funds to the wrong address).