machine to machine payments
TRANSCRIPT
M2M Payments
@meinharrd | @SatoshiPay
Machine to machine?
1971: Caller ID for landlines
First machine to machine communication
1982: Carnegie Mellon University Coke machine
First IoT device
1995: Siemens M1 GSM module
Stripped down Siemens S6
IoT going mobile
Industrial applications:monitoring, tracking, telematics
Point of sale terminals
After 2000: More features, faster, smaller
IoT payments
Proprietary solutions byKORE, Gemalto, FTS
Revolving around vending machines and POS
Future use cases
Road tolls
Public battery chargers
Selling sensor data
Drones charging for delivery
M2M payment benefits
No cognitive load
Instant
Cost-effective
Deep integration in business logic / contracts
Permissions
Anonymity
Challenges
Transaction fees:
Cryptocurrencies potential solution
Security:
Storing payment data on devices
Legal:
“The current revision of the European Payment Services Directive is not fit for M2M payments.”
Prof. Dr. Rolf H. Weber (Zürich)
Cryptocurrencies
Also known as blockchain
No coin, no chain
Open
Programmable money
Standardised
Identity
21 Inc
Pre-installed payment infrastructure
+ ?2
(2013)(2014)
Cryptocurrency shortcomings
Not instant
Blockchain bloat
Relatively high fees
Solution: Smart Contracts
Bitcoin Payment Channel
Contract between sender and receiver
Funds parked on multi-signature escrow address
Transaction drafts exchanged “off-chain”
Contract can be executed by both partiesat any given time
Sender Wallet Recipient Wallet
Sender Wallet Recipient WalletTx
Sender Wallet Recipient WalletTx
Sender Wallet Recipient Wallet
Sender Wallet Recipient Wallet
Escrow
Sender Wallet Recipient Wallet
EscrowFunding Tx
Sender Wallet Recipient Wallet
EscrowFunding Tx
Refund Tx
Sender Wallet Recipient Wallet
EscrowFunding Tx
Refund Tx
Payment Tx
Sender Wallet Recipient Wallet
EscrowFunding Tx
Refund Tx
Payment Tx
Bitcoin Network
Sender Wallet Recipient Wallet
EscrowFunding Tx
Refund Tx
Payment Tx
Signature SignaturePayment Tx
Bitcoin Network
Sender Wallet Recipient Wallet
EscrowFunding Tx
Refund Tx
Payment Tx
Signature SignaturePayment Tx
Payment Channel
Bitcoin Network
No fees apart from 2 transactions
Instant
No blockchain bloat
Nanopayments
Thanks!
@meinharrd
@SatoshiPay
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are.net/meinhard