How to use IPv6 and Bitcoin: The Bitcoin Masterclasses in Slovenia

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In the second session of the second The Bitcoin Masterclasses in Slovenia, Dr. Craig Wright asked groups to share what they had come up with regarding use cases for Bitcoin, IPv6, and related technology. He’d assigned them this task after the first session, and in this one, groups shared their ideas.

Bitcoin: An incredibly resilient network

“Nodes are the guys who get paid. They’re there to do a service,” Dr. Wright says, kicking off the second session of the day. They do all parts of Section 5 of the Bitcoin white paper to get paid. This is why they store transactions and broadcast them—it’s a capitalist, money-based system, and nodes are incentivized to do the work they’re tasked with.

“When I invented Bitcoin, I used network science—not Karl Marx,” Dr. Wright says. He explains that, while the term has been twisted and misused, decentralization means that the network will remain resilient if any node is removed at random.

Delving briefly into the concept of packet switching, he explains that, for the first time, it meant that packets of data could be split and sent to their destination via various methods. Whereas before, connections were one-to-one (he gives the example of a telephone line going right across the country between two callers), with packet switching, data could travel in any direction, and nobody cared as long as it got there. This made things more resilient, and as Dr. Wright has explained many times, Bitcoin is about creating an “incredibly resilient network.”

“Short of nuclear war, Bitcoin will keep going for the next 140 years without a second of downtime,” Dr. Wright says. He then goes back to the groups he assigned to think of use cases for Bitcoin and IPv6.

Group one

Group one thought of using it as a peer-to-peer messaging service. By cutting out third parties, a new level of privacy is introduced to communications. Third parties can no longer listen in on conversations and gather information.

Dr. Wright agrees with this. However, he points out that it’s different from the likes of TOR. With Bitcoin, we leave an evidence trail, and if we do something illegal, investigators can figure it out using good old-fashioned human intelligence. This is very different from the ‘catch-all’ approach the NSA and other intelligence agencies use today.

The very nature of a system that has billions of transactions per second is private by virtue of the fact there are so many transactions occurring, he says. Some transactions will be IoT devices updating their positions, others will be cash transactions, and others will be cinema tickets, while others will be NFTs being minted and moved, and figuring out what’s what is extremely difficult without sitting down and actively tracing any given one.

It becomes impossible to monitor all of the transactions in such a way that invades privacy. Still, it is possible to actively look into those that are suspicious and then trace back and prove things provided someone has sufficient motivation to do so, such as investigators trying to establish a crime.

“That’s the difference between privacy and secrecy,” Dr. Wright tells us once again.

Group two

Group two said that IPv6 could be used to establish trust between two devices.

Dr. Wright says that we set all of this up, and he asks, “if I’m the owner of a device, can I issue keys?” He gives the example of having access to his car from his phone. He’ll want to protect that and ensure other unauthorized people don’t have access to his car.

However, he may choose to issue keys to trusted people like mechanics who are working on his vehicle or valets who will park it. It’s possible to give them limited access, such as the ability to open the car or drive it a specified distance.

We can issue keys with access policies for all sorts of devices, including mobile phones, he tells us. Better yet, when we put all of this on the blockchain, we can exchange information via hashes so as not to bloat the blockchain with spam.

Group three

This group came up with the idea of using blockchain for mobile IP registration. This can be used to record IP addresses when mobile devices move between networks. This could be used to verify and identify users.

“How does that link in with proof of identity?” Dr. Wright asks, linking this back to concepts he taught in his first Bitcoin Masterclass. He explains that mobile IPs link to keys and that this doesn’t always have to link back to a government-issued key ID. Instead, we can form hierarchies, allowing us to do things like proving where our phone is and accessing that information without anyone else knowing anything unless we allow them to.

Delving deeper, Dr. Wright says that, using these ideas, we can even have privacy and prove we weren’t somewhere at the same time. For example, using our mobile IP data, we could prove to authorities that we weren’t in a given place without necessarily saying where we were. Once again, privacy and secrecy are different things.

Group four

This group discussed AH and ESP.

AH stands for authentication headers—a built-in field in every IPv6 packet. It authenticates the packet, for example, proving that it came from a specific device. There must be ways to ensure malicious actors do not send back false data, and this group thinks using IPv6 is one way to do that.

Dr. Wright says that the information could be encrypted (or not). We can also use alert keys to send out information such as that there’s an attack on the network, and we can authenticate it. None of this has to be particularly complex, as many people seem to believe. He then gives some examples of ways this can be done.

Group five

This group considered various questions about nodes and the efficiency of the network. For example, they wondered how many nodes are part of an IPv6 multicast group. They also considered where to place nodes geographically and how they should be organized.

“Generally speaking, we wouldn’t have more than 1.2 million billion billion machines per group,” Dr. Wright says, joking about giving ants and grains of sand unique IP addresses.

Group six

This group discussed NDP (Neighbor Discovery Protocol) and IPsec. These are security-related and discovery protocols that allow clients to find other clients in the network.

“If we did some sort of overlay thing where we want to have certain types of machines anywhere on earth join and do stuff, we’d want to use something like that, wouldn’t we?” Dr. Wright asks rhetorically. We’ll need protocols to enable machines to find each other globally, allow them to join multicast groups, etc., and we’ll want to do it in a secure way, he tells us.

As Dr. Wright has repeatedly said during this Masterclass, many of the lesser-known protocols become important again when talking about a global peer-to-peer network.