Blockchain 2.0: Exchanging value in the physical and digital world, continuously and simultaneously
As machines are developing into intelligent autonomous machines, they drive their own buying choices. We must accept them as a new customer group with basic needs and change how products and services are designed, defined, communicated, priced and presented to them. Machines will develop their own ways (protocols) to communicate and discover services they need and exchange physical and digital value among each other. These new infrastructures and protocols might be built upon a combination of blockchain and AI/ML technology[1].
Maslow Pyramid for Human and Machine Needs Examples of basic physiological machine needs are energy, heating/cooling, consumable physical supplies, connectivity including data streams, (external) computing power and ongoing services. Many of these physiological needs are fulfilled by a liquid stream of a supply medium: electricity, gas or liquid fluid, usage based connectivity, real time data streams, time-based access to a physical service, a digital API or digital asset or usage based insurance services. A machine is giving either another supply medium or digital assets back in return for such a supply medium. This type of a continuous transaction among at least two or more machines is called a Liquid Supply Medium Exchange.
The concept of Liquid Supply Medium exchange can also be applied for human-machine transactions— think entertainment media stream streaming or usage based service — and hybrids teams of humans and machines.
This first part describes discrete blockchain payment methods including Ethereum or zCash and introduces some selected blockchain technology options such as Ethereum Raiden orµRaidenpayment channels, Bitcoinlightningpayment channels, or IOTA flash channels by using the practical example of Electric Vehicle (EV) Charging:Exchange of electric power and crypto-currency tokens between a charging pole and a vehicle.
We think that EV Charging is a typical use case as initial implementations of blockchain EV charging infrastructures have already been implemented including a Pan-European CV charging network over the last months by innogy SE and Motionwerk GmbH [2], [3], [4], [5]. This use case concept can be easily transferred to other examples as well.
In the second part of this article we describe an alternative approach to the blockchain payment channels by using digital asset transactions in blockchain databases (BigchainDB) and hybrid solutions in combination with payment channels. In addition we will introduce a new transaction type for digital twins of machines.
In today’s world fiat currencies, or cash, are the most liquid assets, because they can be “sold” for goods and services instantly with no loss of value. There is no wait for a suitable buyer of the cash. There is no trade-off between speed and value. It can be used immediately to perform economic actions like buying, selling, or paying debt, meeting immediate wants and needs. [6]
Today, digital and physical transfers are done via financial services involving banks by using fiat currencies. This (liquid) fiat money transfer system does not support Liquid Supply Medium Exchange in an effective way. There are always intermediaries and discrete processing steps required. The system is neither flexible nor (cost-)efficient enough — think of complex core baking and corporate ERP systems— nor protects the privacy of the parties involved in both, the new digital and the new machine economy.
In the new world where machines are continuously transacting physical and digital values a peer-to-peer (P2P) token streaming system is required. The adoption of today’s discrete payment methods and Third Party Intermediary (TPI) Services will not work to automate micro-transactions among billions of machines (and with humans).
Continuous Liquid Supply Medium Exchange and P2P Token StreamingIn a simple case a physical or digital value is exchanged between two machines while a digital token of value is transferred simultaneously.
