Brief overview of Payment Sockets, which are an experimental protocol built on Interledger V4 (ILPv4) for opening bidirectional streams of money. They can be used for push payments, pull payments, invoices, gift cards, and streaming payments. Presented during the Interledger Community Group call on February 21, 2018. Payment Sockets are currently implemented in: https://github.com/emschwartz/ilp-protocol-paystream Join the Interledger Community group mailing list and bi-weekly calls by going to: https://interledger.org/community.html

1. Payment Sockets
Interledger CG Call - Feb 21, 2018
Evan Schwartz
@_emschwartz

2. Payment Sockets are a
protocol built on PSK2 for
opening bidirectional
streams of money

3. Proposed by @justmoon and @sharafian in rfcs#388

4. Interledger Architecture
ILPv4
XRP-PayChan Lightning
ETH-PayChan ERC20-PayChan
Interledger
Ledger
Transport
PSK2
Application SPSP HTTP-ILP Codius/Cog ...
Payment Sockets

5. Spectrum of Protocols on top of PSK2
Single
Chunks
Simple
Chunked
Sender
Payment
Sockets
TCP-
Over-ILP
Pure PSK2 More Complex

6. USE CASES
● Push Payments
● Pull Payments
● Invoices
● Gift Cards
● Streaming Payments

7. Payment Sockets are virtual connection between a
“client” and a “server” over an Interledger connection
Client Server
Interledger

8. Payment Sockets can be used for sending or receiving
Client Server

9. Money can be sent by lowering the Maximum Balance
(e.g. Push Payments, Gift Cards)
Client Server
Balance: -1000 Balance: 1000
MinBal: -1000
MaxBal: -1000
MinBal: 0
MaxBal: ∞

10. Receiver can raise its Minimum Balance to disable refunds
Client Server
Balance: -1000 Balance: 1000
MinBal: -1000
MaxBal: -1000
MinBal: 1000
MaxBal: ∞

11. Or Receiver can keep their Minimum at zero to enable refunds
Client Server
Balance: 0 Balance: 0
MinBal: 0
MaxBal: 0
MinBal: 0
MaxBal: ∞

12. Either side can request money by raising their Minimum Balance
(e.g. Pull Payments, Invoices)
Client Server
Balance: 2000 Balance: -2000
MinBal: 2000
MaxBal: ∞
MinBal: -4000
MaxBal: ∞

13. More can be requested by raising the Minimum further
(e.g. Streaming Payments)
Client Server
Balance: 3000 Balance: -3000
MinBal: 3000
MaxBal: ∞
MinBal: -4000
MaxBal: ∞

14. Payment Sockets (will)
automatically handle
exchange rates, chunking,
flow control, errors

15. Follow the development at:
https://github.com/emschwartz/ilp-protocol-paystream