nanopayments - fuel for a machine-to-machine economy | meinhard benn
TRANSCRIPT
M2M Payments
@meinharrd | @SatoshiPay
Machine to machine?
1971: Caller ID for landlines
First machine to machine communication
1982: Carnegie Mellon University Coke machine
First IoT device
1995: Siemens M1 GSM module
Stripped down Siemens S6
IoT going mobile
Industrial applications:monitoring, tracking, telematics
Point of sale terminals
After 2000: More features, faster, smaller
Payments
Proprietary solutions byKORE, Gemalto, FTS
Revolving around vending machines and POS
Future use cases
Road tolls
Public charging stations
Selling sensor data
Drones charging for delivery
Decentralised computing
M2M payment benefits
No cognitive load
Instant
Cost-effective
Deep integration in business logic / contracts
Permissions
Anonymity
Challenges
Transaction fees:
Cryptocurrencies potential solution
Security:
Storing payment data on devices
Legal:
“The current revision of the European Payment Services Directive is not fit for M2M payments.”
Prof. Dr. Rolf H. Weber (Zürich)
Cryptocurrencies
Also known as blockchain
No coin, no chain
Open
Programmable money
Standardised
Identity
21 Inc
Pre-installed payment infrastructure
+ ?2
(2013)(2014)
Cryptocurrency shortcomings
Not instant
Blockchain bloat
Relatively high fees
Solution: Smart Contracts
Bitcoin Payment Channel
Contract between sender and receiver
Funds parked on multi-signature escrow address
Transaction drafts exchanged “off-chain”
Contract can be executed by both partiesat any given time
Sender Recipient
TxSender Recipient
TxSender Recipient
Escrow
Sender Recipient
Funding TxEscrow
Sender Recipient
Funding Tx
Refund Tx
Escrow
Sender Recipient
Funding Tx
Refund Tx
Payout Tx
Negotiation
Escrow
Sender Recipient
Funding Tx
Refund Tx
SignaturePayout Tx
Signature
Negotiation
Escrow
Sender Recipient
Funding Tx
Refund Tx
Payout Tx
SignaturePayout Tx
Signature
Negotiation
Escrow
Sender Recipient
Funding Tx
Refund Tx
Payout Tx
SignaturePayout Tx
Bitcoin Network
Signature
Negotiation
Escrow
Sender Recipient
Funding Tx
Refund Tx
Payout Tx
SignaturePayout Tx
Bitcoin Network
Signature
Negotiation
Payment Channel
Escrow
Sender Recipient
Funding Tx
Refund Tx
Payout Tx
SignaturePayout Tx
Bitcoin Network
Signature
Negotiation
Payment Channel
Escrow
Sender Recipient
No fees apart from 2 transactions
Instant
No blockchain bloat
Nanopayments
Lightning Network
Bidirectional payment channels
Iota
Cryptocurrency designed for M2M payments
Some crazy shit: tangle, trinary, lazy tips
Whitepaper: iotatoken.com
HTTP 402 (Payment Required)
Added to HTTP/1.1 in 1996
“This code is reserved for future use.”
HTTP 402 response with additional headers
No standard for payment headers
21 Inc or ZeroClick
Example client request:
GET /paid-content.html
Server response:
HTTP 402
X-Price: 2500X-Bitcoin-Address: 1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX
Client payment:
GET /paid-content.html
X-Signed-Bitcoin-Transaction: bd770796a9e790...493bb7d449485cf3
Server ships content:
HTTP 200
<h1>Here is your content, have fun with it!</h1>
docs.satoshipay.io/api
Thanks!
@meinharrd
@SatoshiPay
slidesh
are.net/meinhard