Why Bitcoin’s peer-to-peer nature is good news for an Internet of Things

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“Peer-to-peer” is in the title of Satoshi Nakamoto’s paper that heralded the arrival of Bitcoin and mainstream awareness of blockchain technology. The idea is simple: everyday users transacting directly, without the need to expose sensitive information to other parties. 

It’s a new model for commerce, one where records are immutable and can’t be lost, and where parties can trade securely and privately. With Bitcoin, you also don’t need to be online at the time that someone sends you money to receive it.

The goal: empowering the individual

There are any number of use cases besides payments, including:

  • Music: Where creators benefit from an inexpensive, secure, and transparent way to receive royalties directly from listeners
  • Software licensing: Where vendors can ensure the conditions associated with their license are adhered to continuously and cost-effectively
  • Digital artwork: Where tokens can be used to protect digital objects and control access to original creative content

Exchanging digital assets or data directly is about “empowering the individual”, as Dr Craig Wright, nChain’s Chief Scientist, puts it. A definitive record on the blockchain of transactions between retailers and consumers, conducted using simplified payment verification (SPV), could be valuable for cases of dispute resolution—not to mention audits—while user privacy and identity can be protected.

Integrating with the Internet of Things

But it goes further: as Dr Wright explained at the recent Global IoT summit in Dublin, the original design of Bitcoin can allow not only people or users, but also IoT devices to securely exchange data at an impressive scale. That means everything from wearables to smart home objects and telematics devices. In this setup, the blockchain acts as a base layer, powering and securing tools such as a ‘multilevel IOT’ (MIOT) controller.

IoT systems generate large volumes of data, relying on underlying technology with:

  • network scalability
  • strong cybersecurity
  • reliable connectivity
  • minimal network latency

This is exactly the kind of attributes and properties that Bitcoin allows—and why we’re so excited about the benefits it can bring.

The benefits of IPv6 for blockchain

Why does this matter? The Internet Protocol (IP) defines addressing methods to connect devices across the internet; whether that’s your laptop or something larger, like a server. The latest iteration, IPv6, allows for more addresses than IPv4, which means more devices, and more peers, can directly connect to each other. Adoption of IPv6 is growing rapidly, and this is an ideal time to be leading the conversation about how that opens an opportunity for blockchain and the world of IoT.

“IP-to-IP connectivity has always been a cornerstone of the way Bitcoin was designed. By allowing billions of devices and users to interact peer-to-peer, the system can handle unbounded volumes of transactions on a global scale, says Dr Wright.

One way to think of it is that if an IP address is the online version of your home address, Bitcoin secures the infrastructure inside; the plumbing, electricity and so on—as Dr Wright explains: “Many people are still confused about how the BSV blockchain will become the plumbing for global trade. IPv6 and the BSV blockchain are technical complements that can, and will, power new models for global trade.”

The future internet

IPv6, blockchain, IoT devices, cloud computing and even 5G—as we’ve talked about before—are all interconnected facets of a future internet that we are working to build. One that can scale to cater for a global market and communicate at the speeds needed for real-time data exchange. We’ve patented a number of inventions that underpin this infrastructure and believe the blockchain we help maintain is the only one fit for purpose for enterprise applications.

To understand more about how we’re working together with Latif Ladid, Founder of the IPv6 Forum, watch his summary of recent developments here.

NB: This article is a summary of a presentation given by nChain’s Chief Scientist Dr Craig S Wright at the Global IoT summit in Dublin. Visit their website to learn more.

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