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Interledger Update
Stefan Thomas
Web Payments IG // TPAC 2016
Payment Networks Are Disconnected
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BlockchainACH Mobile Money Card Networks
BlockchainACH Mobile Money Card Networks
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Internetworking For Payment Networks
How Does It Work?
Transferring Funds Across Networks
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Sender RecipientLedger Ledger
Connectors Link Two Ledgers
Connector
Alice 100
Chloe 0
Chloe 110
Bob 0100 110
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EUR USD
Bilateral Connections Don't Scale
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Bilateral Connections Don't Scale
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O(n2)
Networks Do Scale
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O(n)
But There Isn't Always A Direct Connection
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O(n)
We Need Multiple Hops
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O(n)
TO:
us.wf.bob
First Step: Interledger Address
Sender Attaches Packet to Local Transfer
Alice 100
Chloe 0
Chloe 110
Bob 0100
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us.wf.bob
1023.20
Connector Forwards the Packet via Another Transfer
Alice 0
Chloe 100
Chloe 110
Bob 0
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110
us.wf.bob
1023.20
If Connectors Fail, Would We Lose Money?
Alice 100
Chloe 0
Chloe 110
Bob 0
?
100
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Ledgers Provide Hold Functionality
Alice 100
On Hold 0
Chloe 0
Chloe 110
On Hold 0
Bob 0
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Holds Are Dependent on Conditions + Expiries
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EXECUTEROLLBACK
Condition Fulfillment Executes Transfer
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EXECUTEROLLBACK
Timeouts Cause Funds to Be Returned
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EXECUTEROLLBACK
Sender Commits FundsTo Initiate Payment
Funds Are Committed From Left to Right
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Alice 100
On Hold 0
Chloe 0
Chloe 110
On Hold 0
Bob 0
COMMITMENT
Sender Puts Funds On Hold
Alice 100
On Hold 0
Chloe 0
Chloe 110
On Hold 0
Bob 0
100
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us.wf.bob
1023.20
Connector Gets Notification of Funds on Hold
Alice 0
On Hold 100
Chloe 0
Chloe 110
On Hold 0
Bob 0
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?
us.wf.bob
1023.20
Connector Puts Funds on Hold
Alice 0
On Hold 100
Chloe 0
Chloe 110
On Hold 0
Bob 0
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110?
us.wf.bob
1023.20
Recipient Gets Notification of Funds on Hold
Alice 0
On Hold 100
Chloe 0
Chloe 0
On Hold 110
Bob 0
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? ?
us.wf.bob
1023.20
Recipient Triggers ExecutionBy Fulfilling the Condition
Transfers Are Executed Right to Left
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Alice 0
On Hold 100
Chloe 0
Chloe 0
On Hold 110
Bob 0
EXECUTION
? ?
Recipient Signs Receipt
Alice 0
On Hold 100
Chloe 0
Chloe 0
On Hold 110
Bob 0
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? ?
Signature Fulfills Condition, Ledger Releases Held Funds
Alice 0
On Hold 100
Chloe 0
Chloe 0
On Hold 110
Bob 0110
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?
How Does the Connector Get Reimbursed?
Alice 0
On Hold 100
Chloe 0
Chloe 0
On Hold 0
Bob 110
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?
?
Connector is Notified That Funds Have Been Released
Alice 0
On Hold 100
Chloe 0
Chloe 0
On Hold 0
Bob 110
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?
Connector Passes on the Recipient’s Signature
Alice 0
On Hold 100
Chloe 0
Chloe 0
On Hold 0
Bob 110
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?
Receipt Releases Funds from Hold
Alice 0
On Hold 100
Chloe 0
Chloe 0
On Hold 0
Bob 110
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100
Sender Gets Non-Repudiable Proof of Payment
Alice 0
On Hold 0
Chloe 100
Chloe 0
On Hold 0
Bob 110
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COMMITMENT
Transfers Are Committed L2R, Executed R2L
EXECUTION
Making Something UsefulFor Developers; Today
ILP-EnablementAlso Known As The Right Way
Adoption To-DateStatus: Not Great
Protocols Have Humble BeginningsGotta Start Somewhere
Participants Create A "Virtual" Ledger
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And Settle Via An Underlying Settlement Ledger
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ACH, SEPA, PayPal, ...
And Settle Via An Underlying Settlement Ledger
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