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Interledger
Evan Schwartz
Node.js Dev at Ripple
Co-Inventor of Interledger
@_emschwartz
Internetworking for Money
Agenda
1. Payments need interoperability
2. Interledger connects ledgers
3. Impact of internetworking
4. Demo!
Developer has an idea for a new service
How to monetize?
Credit card to sign up?
Few services can convince users to give CCs
Advertising?
Selling users’ data?
Why is it so hard to just get paid?
Payments are broken.
Payment Methods Accepted By Prineta.com
Accepting Payments OnlineAccepting Payments Online
Every Tech Company Has A Payment Product
Blockchains Have the Same Problem
Payment Networks Are Disconnected
BlockchainBanks Mobile Money Online Wallets
?
X
Need to pay from any network, to any network
Payments Should Be As Easy As:
We need:
1. A standardized payment API
2. To pay anyone, on any network
We need:
Internetworking
in·ter·net·work·ing
Connecting networks through gateways that
route data packets between the networks
noun
Internetworking Connects Everyone
BlockchainBanks Mobile Money Online Wallets
Internetworking For Payment Networks
Interledger
Internetworking for Money
Interledger Project
KEY FACTS
Open Protocol Community Group @ W3C 240+ Contributors
Banks
Central banks
Payments companies...
Interledger is
not a blockchain.
Interledger has
not a single network.
Interledger has
no built-in currency.
Interledger is an
internetworking protocol.
OUR INSPIRATION
The History & Architecture of the Internet
SIMPLICITY
Internet Architecture
IP
WIFI BLUETOOTH ETHERNET
Internetwork
Network
Transport TCP UDP
Application HTTP SMTP NNTP NTP RTP
Interledger Architecture
ILP
BLOCKCHAINS
BANKS MOBILE MONEY
Interledger
Ledger
Transport IPR PSK PSK-ECDH
Application SPSP...
Interledger 101
Internetworking Ingredients:
1. Ledger Abstraction
2. Routers
3. Multi-Hop
4. Address + Packet
5. Routing
Internetworking Ingredients:
1. Ledger Abstraction
2. Routers
3. Multi-Hop
4. Address + Packet
5. Routing
BlockchainBanks Mobile Money Online Wallets
Need a Way to Interact with Every Kind of Ledger
All Ledgers Are Treated Equally
IP Works Over Every Type of Network
Internetworking Ingredients:
1. Ledger Abstraction
2. Routers
3. Multi-Hop
4. Address + Packet
5. Routing
Payments Within One Network Are Trivial
Sender ReceiverLedger
Payments Across Ledgers
Sender ReceiverLedger Ledger
?
Connectors Link Two Ledgers
Connector
EUR USD
Connectors Exchange Currencies
Alice 100
Chloe 0
Chloe 107
Bob 0
EUR USD
Connectors Generate Revenue from Spreads
Alice 100
Chloe 0
Chloe 107
Bob 0
EUR USD
Payments Across Connectors?
EUR USD
?
BTC
Internetworking Ingredients:
1. Ledger Abstraction
2. Routers
3. Multi-Hop
4. Address + Packet
5. Routing
Multi-hop is trickier with
money than with data
Correspondent Banking: Optimistic Execution
EXECUTE
Correspondent Banking: Optimistic Execution
FAIL
1. PREPARE
Interledger: Two-Phase Execution Secures Multi-Hop Transfers
REFERENCES
J. Poon and T. Drya, The Bitcoin Lightn...
1. PREPARE
2. EXECUTE
Interledger: Two-Phase Execution Secures Multi-Hop Transfers
REFERENCES
J. Poon and T. Drya, The Bit...
1. PREPARE
2. EXECUTE
Sender is Guaranteed Fulfillment or Money Back
REFERENCES
J. Poon and T. Drya, The Bitcoin Lightning...
Conditional payments enable
trustless connectors
Internetworking Ingredients:
1. Ledger Abstraction
2. Routers
3. Multi-Hop
4. Address + Packet
5. Routing
{
account: "g.us.usd.chase.bob.car",
amount: "10",
data: "SGVsbG8gV29ybGQhCg..."
}
Interledger In One Slide
{
account: "g.crypto.bitcoin.1BvBMSEY...",
amount: "10",
data: "SGVsbG8gV29ybGQhCg..."
}
Interledger Addresses Work for An...
Core of IP is the Address and Packet Formats
Internetworking Ingredients:
1. Ledger Abstraction
2. Routers
3. Multi-Hop
4. Address + Packet
5. Routing
Addressing is Separate From Routing
Please deliver to
g.crypto.bitcoin.1x... Right away!
Today: Connectors Broadcast Routes to One Another
I’ve got
g.crypto.ethereum.
I can reach
g.eur.bitstamp.
I can reach
g.cr...
Internetworking Ingredients:
1. Ledger Abstraction
2. Routers
3. Multi-Hop
4. Address + Packet
5. Routing
Internetworking:
Payments From Anyone, to Anywhere
Internetworking Costs
Plummet
New Use
Cases
Everywhere you want to be.
There are some things money can't buy.
For everything else, there's MasterCard.
TODAY
Payment N...
This used to be true for
information networks too
"… biggest …"
"… more members …"
"… more services…"
Internetworking commoditized reach
America's fastest Internet.
Reliable. Safe. Fast.
High-speed Internet from AT&T
Fast, reliable, unlimited Internet
WITH IN...
Efficient Switching Removes Fixed Costs
unviable viable viable
fixed cost
Transaction size
Cost
Transaction size
Cost
pre-...
Internet — Cost vs Volume
SOURCES
Cisco
DrPeering
Internetworking Costs
Plummet
New Use
Cases
The Internet Enabled Fundamentally New Business Models
Internetworking Costs
Plummet
New Use
Cases
INTERNET OF VALUE
Pay For Lunch with Gold, Stocks, or Community Currency
INTERNET OF VALUE
Pay for Media As You Stream It
Sending Payment...
$1241.20 remaining; current speed: 13.2 $/s
Demo Time!
W3C Web Payments API - Interledger is Supported Method
● National Payment Infrastructure
● Central Bank Settlement
● Cross-Border Payments
● Remittances and Mobile Money
● Conne...
● Join the community calls + mailing list
● Running an ILP Kit
● Implementations in Go, Rust, <insert your favorite>
● Rou...
BlockchainBanks Mobile Money Online Wallets
Help Create the Internet of Value!
interledger.org @interledger
Interledger Overview // Berlin Node.js Meetup
Interledger Overview // Berlin Node.js Meetup
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Interledger Overview // Berlin Node.js Meetup

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Introduction to the Interledger Protocol presented at the Berlin Node.js developer Meetup

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Interledger Overview // Berlin Node.js Meetup

  1. 1. Interledger Evan Schwartz Node.js Dev at Ripple Co-Inventor of Interledger @_emschwartz Internetworking for Money
  2. 2. Agenda 1. Payments need interoperability 2. Interledger connects ledgers 3. Impact of internetworking 4. Demo!
  3. 3. Developer has an idea for a new service
  4. 4. How to monetize?
  5. 5. Credit card to sign up?
  6. 6. Few services can convince users to give CCs
  7. 7. Advertising?
  8. 8. Selling users’ data?
  9. 9. Why is it so hard to just get paid?
  10. 10. Payments are broken.
  11. 11. Payment Methods Accepted By Prineta.com Accepting Payments OnlineAccepting Payments Online
  12. 12. Every Tech Company Has A Payment Product
  13. 13. Blockchains Have the Same Problem
  14. 14. Payment Networks Are Disconnected BlockchainBanks Mobile Money Online Wallets
  15. 15. ?
  16. 16. X
  17. 17. Need to pay from any network, to any network Payments Should Be As Easy As:
  18. 18. We need: 1. A standardized payment API 2. To pay anyone, on any network
  19. 19. We need: Internetworking
  20. 20. in·ter·net·work·ing Connecting networks through gateways that route data packets between the networks noun
  21. 21. Internetworking Connects Everyone
  22. 22. BlockchainBanks Mobile Money Online Wallets Internetworking For Payment Networks
  23. 23. Interledger Internetworking for Money
  24. 24. Interledger Project KEY FACTS Open Protocol Community Group @ W3C 240+ Contributors Banks Central banks Payments companies Tech giants Consulting companies Blockchain companies
  25. 25. Interledger is not a blockchain.
  26. 26. Interledger has not a single network.
  27. 27. Interledger has no built-in currency.
  28. 28. Interledger is an internetworking protocol.
  29. 29. OUR INSPIRATION The History & Architecture of the Internet
  30. 30. SIMPLICITY
  31. 31. Internet Architecture IP WIFI BLUETOOTH ETHERNET Internetwork Network Transport TCP UDP Application HTTP SMTP NNTP NTP RTP
  32. 32. Interledger Architecture ILP BLOCKCHAINS BANKS MOBILE MONEY Interledger Ledger Transport IPR PSK PSK-ECDH Application SPSP HTTP-ILP PAYTORRENT
  33. 33. Interledger 101
  34. 34. Internetworking Ingredients: 1. Ledger Abstraction 2. Routers 3. Multi-Hop 4. Address + Packet 5. Routing
  35. 35. Internetworking Ingredients: 1. Ledger Abstraction 2. Routers 3. Multi-Hop 4. Address + Packet 5. Routing
  36. 36. BlockchainBanks Mobile Money Online Wallets Need a Way to Interact with Every Kind of Ledger
  37. 37. All Ledgers Are Treated Equally
  38. 38. IP Works Over Every Type of Network
  39. 39. Internetworking Ingredients: 1. Ledger Abstraction 2. Routers 3. Multi-Hop 4. Address + Packet 5. Routing
  40. 40. Payments Within One Network Are Trivial Sender ReceiverLedger
  41. 41. Payments Across Ledgers Sender ReceiverLedger Ledger ?
  42. 42. Connectors Link Two Ledgers Connector EUR USD
  43. 43. Connectors Exchange Currencies Alice 100 Chloe 0 Chloe 107 Bob 0 EUR USD
  44. 44. Connectors Generate Revenue from Spreads Alice 100 Chloe 0 Chloe 107 Bob 0 EUR USD
  45. 45. Payments Across Connectors? EUR USD ? BTC
  46. 46. Internetworking Ingredients: 1. Ledger Abstraction 2. Routers 3. Multi-Hop 4. Address + Packet 5. Routing
  47. 47. Multi-hop is trickier with money than with data
  48. 48. Correspondent Banking: Optimistic Execution EXECUTE
  49. 49. Correspondent Banking: Optimistic Execution FAIL
  50. 50. 1. PREPARE 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
  51. 51. 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
  52. 52. 1. PREPARE 2. EXECUTE Sender is Guaranteed Fulfillment or Money Back 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
  53. 53. Conditional payments enable trustless connectors
  54. 54. Internetworking Ingredients: 1. Ledger Abstraction 2. Routers 3. Multi-Hop 4. Address + Packet 5. Routing
  55. 55. { account: "g.us.usd.chase.bob.car", amount: "10", data: "SGVsbG8gV29ybGQhCg..." } Interledger In One Slide
  56. 56. { account: "g.crypto.bitcoin.1BvBMSEY...", amount: "10", data: "SGVsbG8gV29ybGQhCg..." } Interledger Addresses Work for Any Ledger
  57. 57. Core of IP is the Address and Packet Formats
  58. 58. Internetworking Ingredients: 1. Ledger Abstraction 2. Routers 3. Multi-Hop 4. Address + Packet 5. Routing
  59. 59. Addressing is Separate From Routing Please deliver to g.crypto.bitcoin.1x... Right away!
  60. 60. Today: Connectors Broadcast Routes to One Another I’ve got g.crypto.ethereum. I can reach g.eur.bitstamp. I can reach g.crypto.bitcoin.
  61. 61. Internetworking Ingredients: 1. Ledger Abstraction 2. Routers 3. Multi-Hop 4. Address + Packet 5. Routing
  62. 62. Internetworking: Payments From Anyone, to Anywhere
  63. 63. Internetworking Costs Plummet New Use Cases
  64. 64. 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
  65. 65. This used to be true for information networks too
  66. 66. "… biggest …" "… more members …" "… more services…"
  67. 67. Internetworking commoditized reach
  68. 68. 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
  69. 69. Efficient Switching Removes Fixed Costs unviable viable viable fixed cost Transaction size Cost Transaction size Cost pre-internetworking fixed costs price out long-tail use cases post-internetworking new business models become possible
  70. 70. Internet — Cost vs Volume SOURCES Cisco DrPeering
  71. 71. Internetworking Costs Plummet New Use Cases
  72. 72. The Internet Enabled Fundamentally New Business Models
  73. 73. Internetworking Costs Plummet New Use Cases
  74. 74. INTERNET OF VALUE Pay For Lunch with Gold, Stocks, or Community Currency
  75. 75. INTERNET OF VALUE Pay for Media As You Stream It
  76. 76. Sending Payment... $1241.20 remaining; current speed: 13.2 $/s
  77. 77. Demo Time!
  78. 78. W3C Web Payments API - Interledger is Supported Method
  79. 79. ● National Payment Infrastructure ● Central Bank Settlement ● Cross-Border Payments ● Remittances and Mobile Money ● Connecting Cryptocurrency Exchanges ● Blockchain Interoperability ● Micropayments Interledger Use Cases Today
  80. 80. ● Join the community calls + mailing list ● Running an ILP Kit ● Implementations in Go, Rust, <insert your favorite> ● Routing research ● Ledger plugins for other ledgers ● Building micropayments into apps/services ● More ideas? Get in touch! Ways to Get Involved
  81. 81. BlockchainBanks Mobile Money Online Wallets Help Create the Internet of Value! interledger.org @interledger

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