This document discusses Interledger, an open protocol for payments across different networks. It begins by outlining the fragmented nature of today's payment systems and how Interledger aims to interconnect them. It then provides technical details on how Interledger works, including optimistic execution, conditional payments, and the role of connectors. Finally, it explores implications, such as lower costs enabling new use cases and business models, and open questions around privacy, currencies, and regulation.

1. Interledger
Internetworking for Money
Evan Schwartz
Co-Inventor of Interledger
@_emschwartz

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. Agenda 1. The Need for Interoperability
2. How Interledger Works
3. Streaming and Chunked Payments
4. Implications of the Internet of Value

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. Interledger Project
KEY FACTS
Open Protocol Community Group @ W3C 275 Contributors
Banks
Central banks
Payments companies
Tech giants
Consulting companies
Blockchain companies

6. Payments are broken.

7. The Payment Space is Highly Fragmented

8. BlockchainBanks Mobile Money Online Wallets
Payment Networks Are Disconnected

9. Can We Connect Everything to One Blockchain?
? ?
? ?

10. No.

11. The World Will Never Agree On One Ledger
Martin SoulStealer, Mexican Standoff, CC BY 2.0

12. BlockchainBlockchain Blockchain Blockchain
Blockchain Does Not Solve This Problem

13. BlockchainBanks Mobile Money Online Wallets
Internetworking For Payment Networks

14. Interledger
Internetworking for Money

15. Interledger is
not a blockchain.

16. Interledger is
not tied to a single network.

17. Interledger has
no built-in currency.

18. Interledger is an
internetworking protocol.

19. Payments Within One Network Are Trivial
Sender ReceiverLedger

20. Payments Across Ledgers
Sender ReceiverLedger Ledger
?

21. Connectors Link Two Ledgers
Connector
EUR USD

22. Connectors Generate Revenue From Spreads
Alice 100
Chloe 0
Chloe 107
Bob 0
EUR USD

23. OUR INSPIRATION
The History & Architecture of the Internet
Source: Motherboard Vice

24. SIMPLICITY

25. Internet Architecture
IP
WIFI BLUETOOTH ETHERNET
Internetwork
Network
Transport TCP UDP
Application HTTP SMTP NNTP NTP RTP

26. Interledger Architecture
ILP
BLOCKCHAINS
BANKS MOBILE MONEY
Interledger
Ledger
Transport IPR PSK PSK2
Application SPSP HTTP-ILP PAYTORRENT

27. Amount
Destination
Data
This Is Interledger

28. Optimistic Execution
EXECUTE

29. Optimistic Execution
FAIL

30. 1. PREPARE
Interledger: Two-Phase Execution Secures Multi-Hop Transfers

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. Amount
Destination
Condition
Expiry
Data
This Is Interledger

33. Amount
Destination
Condition
Expiry
Data
This Is Interledger
unitless

34. Amount
Destination
Condition
Expiry
Data
This Is Interledger
unitless
integer

35. Amount
Destination
Condition
Expiry
Data
This Is Interledger
unitless
integer
ex. 1140000000

36. Amount
Destination
Condition
Expiry
Data
This Is Interledger
unitless
integer
ex. 1140000000hierarchical

37. Amount
Destination
Condition
Expiry
Data
This Is Interledger
unitless
integer
ex. 1140000000hierarchicaldot-separated

38. Amount
Destination
Condition
Expiry
Data
This Is Interledger
unitless
integer
ex. 1140000000hierarchicaldot-separatedex. g.crypto.xrp.r123

39. Amount
Destination
Condition
Expiry
Data
This Is Interledger
unitless
integer
ex. 1140000000hierarchicaldot-separatedex. g.crypto.xrp.r123 hashlock

40. Amount
Destination
Condition
Expiry
Data
This Is Interledger
unitless
integer
ex. 1140000000hierarchicaldot-separatedex. g.crypto.xrp.r123 hashlock
sha256
ex. jBpj1tiDif0IxBQ

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. 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. 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. 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. 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. 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. 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. 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. 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. Successful Response
Fulfillment
Data
8askjc99swLq0zWr…
9xcvlkSF0512loxcv...
8askjc99swLq0zWr…
9xcvlkSF0512loxcv...
Copy

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. Demo!

53. Why is simplicity so
important for standards?

54. The World Will Never Agree On Almost Anything
Martin SoulStealer, Mexican Standoff, CC BY 2.0

57. 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

58. Will payments through Interledger be
small, large, or both?

59. Streaming and Chunked Payments
make everything small

60. 1. PREPARE
Connectors Want Short Hold Times to Minimize Free Option

61. 1. PREPARE
Connectors Want Small Payments to Minimize Fulfillment Risk

62. Payments through the open
Interledger will likely be
very small and fast

63. Sending Payment...
$1241.20 remaining; current speed: 13.2 $/s

64. Network may start with
low bandwidth (like dial-up),
but it will go up over time

65. Chunked Payments Need TCP-Like Transport Protocol
Source: Daewoo Kim, Slideshare

66. (Less Visual) Demo!

67. Internetworking:
Payments From Anyone, to Anywhere

68. Internetworking Costs
Plummet
New Use
Cases

69. 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

70. This used to be true for
information networks too

71. "… biggest …"
"… more members …"
"… more services…"
Source: Computer World via Google Books

72. Internetworking commoditized reach

73. 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

74. Internet — Cost vs Volume
Sources: Cisco, DrPeering

75. Internetworking Costs
Plummet
New Use
Cases

76. Source: Youtube Spotlight

77. The Internet Enabled Fundamentally New Business Models

78. Internetworking Costs
Plummet
New Use
Cases

79. INTERNET OF VALUE
Pay For Lunch with Gold, Stocks, or Community Currency
Source: AWOL

80. INTERNET OF VALUE
Pay for Media As You Stream It
Source: Digital Trends

81. INTERNET OF VALUE
Signup-Less Services

82. INTERNET OF VALUE
Services Pay for Their Own Hosting
Source: Wallpaper Vortex

83. OPEN QUESTIONS
What new services could we build if
payments were free and instant?

84. OPEN QUESTIONS
What if the Internet’s were funded by
micropayments instead of ads?
Would we want everything to be paid?

85. OPEN QUESTIONS
What will we use as currency if all
assets are connected together?
What will the impact be on states?

86. OPEN QUESTIONS
Should money be private?
Should we build TOR on Interledger?

87. OPEN QUESTIONS
What use cases should we focus on?
What would get developers excited to
build with Interledger?

88. BlockchainBanks Mobile Money Online Wallets
Help Shape the Internet of Value!
interledger.org @interledger