Interledger is a Layer 3 protocol that connects Layer 2 networks like Lightning, Raiden, and other blockchain scaling solutions. This presentation gives an overview of the need for interoperability, how Interledger works, the parallels with the Internet, and use cases for streaming micropayments.

1. Interledger
L2, L3, and Beyond
Evan Schwartz
Co-Inventor of Interledger
@_emschwartz

2. Barriers to Blockchain Adoption:
1. Scalability
2. Interoperability

3. L2 Is a Hot Topic!
...And many more!

4. L2 Focuses on Scalability:
➔ Lower fees
➔ Faster transactions
➔ Higher throughput
➔ More users

5. Enabling New Use Cases

6. Enabling New Use Cases

7. How do we avoid this?
Do you take
Lightning?
No, only
Raiden

8. Barriers to Blockchain Adoption:
1. Scalability (ledger-specific)
2. Interoperability (ledger agnostic)

9. What if we could build
network-agnostic (d)apps?

10. The Promise of Interoperable (Micro)Payment Networks
I Lightning
I Raiden

11. Internet of
Money
Payments
Value
Blockchains
Coins

12. The Internet Works the Same Over Ethernet, Fiber, Radio

13. How do we connect different types of networks?

14. What if we copied the
design of the Internet?

15. Interledger
Internetworking for Money

16. Internet Architecture
PPP ETHERNET WIFI BLUETOOTHL2: Network
COPPER FIBER RADIOL1: (Physical)

17. Internet Architecture
IP
PPP ETHERNET WIFI BLUETOOTH
L3: Internetwork
L2: Network
COPPER FIBER RADIOL1: (Physical)

18. Internet Architecture
IP
PPP ETHERNET WIFI BLUETOOTH
L3: Internetwork
L2: Network
L4: Transport TCP UDP QUIC
L5: Application HTTP SMTP NNTP NTP RTP
COPPER FIBER RADIOL1: (Physical)

19. IP Requirements for Integration:
● Send data

20. IP Is So Network-Agnostic...

21. This is Why Protocols Designed for PDP-10s Work w/ iPhones

22. Interledger Architecture
BLOCKCHAINS CENTRAL LEDGERSL1: Ledger

23. Interledger Architecture
PAYMENT / STATE CHANNELS
SIDECHAINS ...
L2 Network
BLOCKCHAINS CENTRAL LEDGERSL1: Ledger

24. Interledger Architecture
ILP
PAYMENT / STATE CHANNELS
SIDECHAINS ...
L3: Interledger
L2 Network
BLOCKCHAINS CENTRAL LEDGERSL1: Ledger

25. Interledger Architecture
ILP
PAYMENT / STATE CHANNELS
SIDECHAINS ...
L3: Interledger
L2 Network
L4: Transport IPR PSK STREAM
BLOCKCHAINS CENTRAL LEDGERSL1: Ledger

26. Interledger Architecture
ILP
PAYMENT / STATE CHANNELS
SIDECHAINS ...
L3: Interledger
L2 Network
L4: Transport IPR PSK STREAM
L5: Application SPSP HTTP-ILP PAYTORRENT
BLOCKCHAINS CENTRAL LEDGERSL1: Ledger

27. Connectors Route Payments Across Ledgers
Connector
BTC USD

28. Connectors Generate Revenue From Spreads
Alice 0.01
Chloe 0
Chloe 100
Bob 0
BTC USD

29. ILP Packets Can Be Sent Across Any Number of Hops
BTC EUR RDNUSD

30. ILP Requirements for Integration:
● Send data (you can use IP)
● Send money

31. Interledger.js Uses Plugins to Abstract Different Ledgers & L2s

32. Current Plugins:
● XRP PayChan
● BTC Lightning
● ETH, ERC20 (Machinomy)
Help us build more!

33. How much can we copy from the IPv4 packet?

34. We cut out many IPv4 fields

36. ILPv4 Packet (Prepare)

37. ILPv4 Packet (Fulfill + Reject)

38. Main Difference from IP:
Packet loss is unacceptable
with money

39. Optimistic Execution (Correspondent Banking Today)
EXECUTE

40. Optimistic Execution (Correspondent Banking Today)
FAIL

41. 1. PREPARE
2. EXECUTE
Two-Phase Execution Secures Multi-Hop Transfers
REFERENCES
J. Poon and T. Drya, The Bitcoin Lightning Network: Scalable Off-Chain Instant Payments, 2015
S. Thomas and E. Schwartz, A Protocol for Interledger Payments, 2015

42. How similar are IP and ILP?

43. Copying QUIC Onto ILP

44. What network-agnostic
(d)apps can we build?

45. INTERNET OF VALUE
ILDeathmatch: Pay to Respawn, Winner Takes All

46. DEMO
Watching video with
streaming micropayments

48. INTERNET OF VALUE
End of Ads and Surveillance-as-a-Service?
Source: Matthew Henry on Unsplash

49. INTERNET OF VALUE
Signup-Less Services

50. INTERNET OF VALUE
Payments With Any Asset, Exchanged in Real Time
Source: AWOL

51. INTERNET OF VALUE
LASERBEER (Streaming Payments for Streaming Goods)

52. Interledger Project
Invented at Ripple, Developed as a Standalone Open Project
Open Protocol Community Group @ W3C 300+ Contributors
Banks
Central banks
Payments companies
Tech giants
Consulting companies
Blockchain companies

53. Join us for the hackathon!
● Create plugins for other L2s
● Build streaming payment apps

54. BlockchainBanks Mobile Money Online Wallets
What will you build on the Internet of Value?
interledger.org @interledger
Next Boston Interledger Meetup on Tuesday 5/22: Interledger Protocol Stack Deep Dive