The digital world quickly took over our lives and integrated itself into every part of our day. However, even as the Internet continues to evolve by leaps and bounds, payment systems are still stuck in the past. Multiple siloed payment networks have created disparate value fragments that are not united by an easy to use and accessible protocol.
The W3 Consortium, which set the general rules for the growth of the Internet back when it first took off, now has another vision for the world. Even as the internet-connected fragmented documentation systems, systems of value will be connected by common standards. This is the vision for the Internet of Value, a world where value moves as fast as information does today.
In 2015, W3C published a document that outlined this vision for the Internet, with the expectation that the Internet of value would bring about “an open and interconnected network of value exchange”. This vision involved the linking of multiple closed networks under common and accessible standards. According to them, this would have a disruptive impact in the spaces of financial inclusion, development of small businesses and liquidity of markets.
W3C set down some principles for the development of IoV, describing the environment in which it would need to be developed. Primarily, there are many value networks and there always will be, such as banks, stock exchanges, patent offices, blockchains and many more. This is the reason W3C was set on developing a set of standards to connect these value networks. They stated that the world is tending towards a state of “increased global trade and interconnectivity”.
They further detailed the ways to connect these value networks, including examples such as cash, a medium with high risk and low fees, debit and credit cards with lower risks and higher fees, and novel value exchange methods such as digital assets. This meant that IoV needed to be open and accessible, and built on an environment of trust and security, just like the Internet is today.
Of course, this also meant that it would be built on open and neutral standards, with a requirement for both privacy and transparency. This translated to standards that are free to acquire, free to adopt and not encumbered by patents. The reason for this is that anyone who wished to integrate with or extend the Internet of Value must be able to do so with a low barrier of entry.
The Evolution of Interoperability
This spurred the development of the Interledger Protocol, a scheme inspired by the definition of the Internet Protocol. The purpose of the ILP is to enable hosts to route payments through an interconnected set of ledgers. These ledgers can comprise of anything, from banks’ ledgers to stock exchanges records, the ledger book of a small company, or even a huge public ledger like the Bitcoin blockchain.
The protocol works by passing the payments from one interledger module to another until the destination is reached. This is done through an interpretation of the receiver’s interledger address, making the address an integral part of the protocol.
ILP also allows for the routing of payments through multiple digital asset ledger, while greatly reducing the risk of failures for the senders and receivers. This is done through a technique known as secure multi-hop payments that work in conjunction with automatic routing on a global network of networks.
The end result is that any sender can be connected with any receiver, across multiple different value silos. ILP allows users to receive money from any ledger without setting up accounts on lots of different services. It has recently received an upgrade in the form of ILPv4, a simplification of the previous versions of the protocol.
The reason for this change is so that it is optimised to route a large number of constant low-value packets. This is to enable a system known as STREAMing, or Streaming Transport for the Real-time Exchange of Assets and Messages. This also comes with improvements to interoperability, as the ILP can now be integrated into any type of ledger, even those that are not built to be interoperable. This contributes to the neutrality, security, simplicity, and end to end principles inspired by the Internet.
Coil Carries ILP forward
Coil is a service developed to monetise web content in a way that is accessible to both the user and the content creator. It requires users to sign up with Coil and pay a fixed monthly subscription. Upon the user visiting a website that supports the API that Coil is built on, known as Web Monetisation, Coil donates to the creator on their behalf.
This is done using the aforementioned STREAMing payments, with Coil sending about 300 millionths of a dollar every second the user is on the page. Coil is supported on Youtube and Twitch, among others, with Coil donating to creators by using existing donation systems. However, as Coil’s payments are processed through ILP, any currency can be utilised for sending and receiving. This includes digital assets such as XRP, which are utilised due to their high speed and low cost.
Coil works with an extension for Google Chrome, with limited support currently for other browsers. Even as they donate based on usage, user’s subscriptions are at a flat rate every month, which is currently $5. In the future, Coil aims to offer higher levels of integration and multiple tiers of subscription.
The world seems to be quickly moving towards a standardised system for value transfer. The rise of the Internet of Value could facilitate ideas such as value transfer between two connected devices on IoT, and even subtler features such as tips or sharing money easily. Overall, the rise of ILP and services like Coil have laid the foundation for the Internet of Value.
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