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34C3 Interledger Presentation - Background, Streaming Payments, and Implications

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From the Interledger session at the Chaos Computer Congress in Leipzig, Germany

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34C3 Interledger Presentation - Background, Streaming Payments, and Implications

  1. 1. Interledger Internetworking for Money Evan Schwartz Co-Inventor of Interledger @_emschwartz
  2. 2. About Me I am a co-inventor of Interledger and the Codius smart contracts platform. I’ve been an engineer at Ripple since 2013 and I’ve worked full time on Interledger since 2014. In general, I am interested in the political economy of money. Working on Interledger, I’ve been fascinated by the potential effects on society and the economy and the parallels we’ve found with the Internet.
  3. 3. Agenda 1. The Need for Interoperability 2. How Interledger Works 3. Streaming and Chunked Payments 4. Implications of the Internet of Value
  4. 4. TL;DR: There are crazy parallels between Interledger and the Internet. We should think hard about the design and implications now to ensure the impacts are positive.
  5. 5. Interledger Project KEY FACTS Open Protocol Community Group @ W3C 275 Contributors Banks Central banks Payments companies Tech giants Consulting companies Blockchain companies
  6. 6. Payments are broken.
  7. 7. The Payment Space is Highly Fragmented
  8. 8. BlockchainBanks Mobile Money Online Wallets Payment Networks Are Disconnected
  9. 9. Can We Connect Everything to One Blockchain? ? ? ? ?
  10. 10. No.
  11. 11. The World Will Never Agree On One Ledger Martin SoulStealer, Mexican Standoff, CC BY 2.0
  12. 12. BlockchainBlockchain Blockchain Blockchain Blockchain Does Not Solve This Problem
  13. 13. BlockchainBanks Mobile Money Online Wallets Internetworking For Payment Networks
  14. 14. Interledger Internetworking for Money
  15. 15. Interledger is not a blockchain.
  16. 16. Interledger is not tied to a single network.
  17. 17. Interledger has no built-in currency.
  18. 18. Interledger is an internetworking protocol.
  19. 19. Payments Within One Network Are Trivial Sender ReceiverLedger
  20. 20. Payments Across Ledgers Sender ReceiverLedger Ledger ?
  21. 21. Connectors Link Two Ledgers Connector EUR USD
  22. 22. Connectors Generate Revenue From Spreads Alice 100 Chloe 0 Chloe 107 Bob 0 EUR USD
  23. 23. OUR INSPIRATION The History & Architecture of the Internet Source: Motherboard Vice
  24. 24. SIMPLICITY
  25. 25. Internet Architecture IP WIFI BLUETOOTH ETHERNET Internetwork Network Transport TCP UDP Application HTTP SMTP NNTP NTP RTP
  26. 26. Interledger Architecture ILP BLOCKCHAINS BANKS MOBILE MONEY Interledger Ledger Transport IPR PSK PSK2 Application SPSP HTTP-ILP PAYTORRENT
  27. 27. Amount Destination Data This Is Interledger
  28. 28. Optimistic Execution EXECUTE
  29. 29. Optimistic Execution FAIL
  30. 30. 1. PREPARE Interledger: Two-Phase Execution Secures Multi-Hop Transfers
  31. 31. 1. PREPARE 2. EXECUTE Interledger: 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
  32. 32. Amount Destination Condition Expiry Data This Is Interledger
  33. 33. Amount Destination Condition Expiry Data This Is Interledger unitless
  34. 34. Amount Destination Condition Expiry Data This Is Interledger unitless integer
  35. 35. Amount Destination Condition Expiry Data This Is Interledger unitless integer ex. 1140000000
  36. 36. Amount Destination Condition Expiry Data This Is Interledger unitless integer ex. 1140000000hierarchical
  37. 37. Amount Destination Condition Expiry Data This Is Interledger unitless integer ex. 1140000000hierarchicaldot-separated
  38. 38. Amount Destination Condition Expiry Data This Is Interledger unitless integer ex. 1140000000hierarchicaldot-separatedex. g.crypto.xrp.r123
  39. 39. Amount Destination Condition Expiry Data This Is Interledger unitless integer ex. 1140000000hierarchicaldot-separatedex. g.crypto.xrp.r123 hashlock
  40. 40. Amount Destination Condition Expiry Data This Is Interledger unitless integer ex. 1140000000hierarchicaldot-separatedex. g.crypto.xrp.r123 hashlock sha256 ex. jBpj1tiDif0IxBQ
  41. 41. Amount Destination Condition Expiry Data This Is Interledger unitless integer ex. 1140000000hierarchicaldot-separatedex. g.crypto.xrp.r123 hashlock sha256 ex. jBpj1tiDif0IxBQdate iso-8601 ex. 2017-11-07T7:11:17Z
  42. 42. Amount Destination Condition Expiry Data This Is Interledger unitless integer ex. 1140000000hierarchicaldot-separatedex. g.crypto.xrp.r123 hashlock sha256 ex. jBpj1tiDif0IxBQdate iso-8601 ex. 2017-11-07T7:11:17Z
  43. 43. What Does a Connector Do? Amount Destination Condition Expiry Data 1 140 000 000 g.crypto.xrp.r123 jBpj1tiDif0IxBQ 2017-11-07T7:11:17Z SGVsbG8gV29yb...
  44. 44. What Does a Connector Do? Amount Destination Condition Expiry Data 1 140 000 000 g.crypto.xrp.r123 jBpj1tiDif0IxBQ 2017-11-07T7:11:17Z SGVsbG8gV29yb... 1 300 000 000 Exchange RateUSD EUR
  45. 45. What Does a Connector Do? Amount Destination Condition Expiry Data 1 140 000 000 g.crypto.xrp.r123 jBpj1tiDif0IxBQ 2017-11-07T7:11:17Z SGVsbG8gV29yb... 1 300 000 000 g.crypto.xrp.r123 Copy & Route
  46. 46. What Does a Connector Do? Amount Destination Condition Expiry Data 1 140 000 000 g.crypto.xrp.r123 jBpj1tiDif0IxBQ 2017-11-07T7:11:17Z SGVsbG8gV29yb... 1 300 000 000 g.crypto.xrp.r123 jBpj1tiDif0IxBQ Copy
  47. 47. What Does a Connector Do? Amount Destination Condition Expiry Data 1 140 000 000 g.crypto.xrp.r123 jBpj1tiDif0IxBQ 2017-11-07T7:11:17Z SGVsbG8gV29yb... 1 300 000 000 g.crypto.xrp.r123 jBpj1tiDif0IxBQ 2017-11-07T7:11:16Z Subtract Delay
  48. 48. What Does a Connector Do? Amount Destination Condition Expiry Data 1 140 000 000 g.crypto.xrp.r123 jBpj1tiDif0IxBQ 2017-11-07T7:11:17Z SGVsbG8gV29yb... 1 300 000 000 g.crypto.xrp.r123 jBpj1tiDif0IxBQ 2017-11-07T7:11:16Z SGVsbG8gV29yb... Copy
  49. 49. What Does a Connector Do? Amount Destination Condition Expiry Data 1 140 000 000 g.crypto.xrp.r123 jBpj1tiDif0IxBQ 2017-11-07T7:11:17Z SGVsbG8gV29yb... 1 300 000 000 g.crypto.xrp.r123 jBpj1tiDif0IxBQ 2017-11-07T7:11:16Z SGVsbG8gV29yb...
  50. 50. Successful Response Fulfillment Data 8askjc99swLq0zWr… 9xcvlkSF0512loxcv... 8askjc99swLq0zWr… 9xcvlkSF0512loxcv... Copy
  51. 51. Error Response Code Message Triggered By Data F99 Receiver didn’t want it! g.crypto.xrp.r123 898xcvasdflkjww... F99 Receiver didn’t want it! g.crypto.xrp.r123 898xcvasdflkjww... Copy
  52. 52. Demo!
  53. 53. Why is simplicity so important for standards?
  54. 54. The World Will Never Agree On Almost Anything Martin SoulStealer, Mexican Standoff, CC BY 2.0
  55. 55. 1. Fully atomic payments 2. Ledger-generated receipts 3. Source routing 4. Multi-credit, multi-debit transfers 5. Crypto Conditions 6. Optimistic mode 7. Connector vs ledger distinction 8. Escrow on blockchains Graveyard of Possible ILP Features 9. Atomicity for large payments 10. Interledger Quoting Protocol 11. Destination amount in the ILP packet 12. Automatic price-based route switching 13. Conditional ledger transfers
  56. 56. Will payments through Interledger be small, large, or both?
  57. 57. Streaming and Chunked Payments make everything small
  58. 58. 1. PREPARE Connectors Want Short Hold Times to Minimize Free Option
  59. 59. 1. PREPARE Connectors Want Small Payments to Minimize Fulfillment Risk
  60. 60. Payments through the open Interledger will likely be very small and fast
  61. 61. Sending Payment... $1241.20 remaining; current speed: 13.2 $/s
  62. 62. Network may start with low bandwidth (like dial-up), but it will go up over time
  63. 63. Chunked Payments Need TCP-Like Transport Protocol Source: Daewoo Kim, Slideshare
  64. 64. (Less Visual) Demo!
  65. 65. Internetworking: Payments From Anyone, to Anywhere
  66. 66. Internetworking Costs Plummet New Use Cases
  67. 67. Everywhere you want to be. There are some things money can't buy. For everything else, there's MasterCard. TODAY Payment Networks Compete For Reach
  68. 68. This used to be true for information networks too
  69. 69. "… biggest …" "… more members …" "… more services…" Source: Computer World via Google Books
  70. 70. Internetworking commoditized reach
  71. 71. America's fastest Internet. Reliable. Safe. Fast. High-speed Internet from AT&T Fast, reliable, unlimited Internet WITH INTERNETWORKING Providers Compete on Speed, Reliability, Ease-of-use
  72. 72. Internet — Cost vs Volume Sources: Cisco, DrPeering
  73. 73. Internetworking Costs Plummet New Use Cases
  74. 74. Source: Youtube Spotlight
  75. 75. The Internet Enabled Fundamentally New Business Models
  76. 76. Internetworking Costs Plummet New Use Cases
  77. 77. INTERNET OF VALUE Pay For Lunch with Gold, Stocks, or Community Currency Source: AWOL
  78. 78. INTERNET OF VALUE Pay for Media As You Stream It Source: Digital Trends
  79. 79. INTERNET OF VALUE Signup-Less Services
  80. 80. INTERNET OF VALUE Services Pay for Their Own Hosting Source: Wallpaper Vortex
  81. 81. OPEN QUESTIONS What new services could we build if payments were free and instant?
  82. 82. OPEN QUESTIONS What if the Internet’s were funded by micropayments instead of ads? Would we want everything to be paid?
  83. 83. OPEN QUESTIONS What will we use as currency if all assets are connected together? What will the impact be on states?
  84. 84. OPEN QUESTIONS Should money be private? Should we build TOR on Interledger?
  85. 85. OPEN QUESTIONS What use cases should we focus on? What would get developers excited to build with Interledger?
  86. 86. BlockchainBanks Mobile Money Online Wallets Help Shape the Internet of Value! interledger.org @interledger

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