Bitcoin payments ‘a natural fit’ in IPv6, ETSI report finds

Getting your Trinity Audio player ready...

As IPv6 becomes more widely used worldwide, Bitcoin is gaining attention from the influential groups that develop, set, and promote IT technical standards. In the latest example, ETSI’s IPv6 Enhanced Innovation (IPE) has produced a report titled “IPv6-based Blockchain.” It details how new security enhancements built into new internet protocol (IP) standards are just suitable for blockchain-based payments and other applications. It specifically refers to Bitcoin’s original design as its primary example.

ETSI (European Telecommunications Standards Institute) supports developing and testing information and communications technologies that eventually become official European (and global) standards. Started in 1988 and based in France, it has over 900 member organizations globally and focuses on wireless networks, content delivery, home/office, transportation, and interoperability. 

The 22-page report is available in full here. It begins by noting that Bitcoin’s original design in 2008 included IP-to-IP functionality—something that was removed from the protocol later due to the security inadequacies of IPv4. Though IPv4 is still widely used, IPv6 has gained momentum in the past decade, and its growth could herald a reintroduction of blockchain-based applications.

Benefits and use cases

The report mentions that IP-to-IP functionality can still be used in IPv4, where unique IP addresses are available, by utilizing security features in existing frameworks, such as DNSSEC (Domain Name System Security Extensions) and TLS (Transport Layer Security) certificates. However, it’s the transition to IPv6 that would finally unlock these advantages for all users and all devices natively.

To the general public, the most recognizable feature of IPv6 is its ample supply of IP addresses—a near-infinite number that would guarantee unique addresses for every user and device, large or small, across the entire internet. IPv4’s far more limited address range has made unique addresses scarce and valuable, with most users acquiring addresses via workaround measures such as NAT (Network Address Translation) routing and address sharing. This, and IPv4’s lack of built-in security features, made the original Bitcoin’s IP-to-IP functionality impractical and far less secure.

Each IPv6 address is cryptographically generated. This becomes a self-authenticating measure to establish secure communications between parties, or to generate unique “session keys” for single Bitcoin transactions without the need for private/public key exchange.

“It is clear that Bitcoin payments are a natural fit with Cryptographically Generated Addresses,” the report stated. Application software could identify whether a user is using IPv6 and/or running Bitcoin and use that information to begin a secure channel for messaging and payment transactions. The report also describes how a Bitcoin payment could be sent directly to a domain name if it can be resolved to an IP address.

It then describes several other practical use-case examples where Bitcoin/blockchain transactions would be advantageous. They include:

• Webserver Access – a client looking to access information on a particular server could be charged for the amount of access, most likely by utilizing micropayments.
• Local Link Payments – where a user can send money to someone physically nearby if they’re accessing the internet on the same network.
• IP Messaging – the ability to send secure and private messages (email or other) directly between parties, which may include payments.
• Transportation terminals and fares – the report describes prepaid and pay-as-you-go journeys where a traveler/commuter can interact with station terminals to make direct payments.

There is no need for any Bitcoin-specific functionality to be included in new IP standards—instead, Bitcoin was designed to leverage existing IPv6 functionality. The main objective now is to ensure IPv6 becomes the internet’s most widely-used protocol. This will happen eventually out of sheer necessity for more addresses, but if users and admins come to understand the additional benefits of secure payments and messaging, IPv6 will gain universal adoption much sooner.

Watch: Dr. Craig Wright’s at IIT Kanput speaking about Bitcoin & IPv6, P2P exchanges enabling an Internet of Everything:

https://www.youtube.com/watch?v=nCLCormnZlc