Thing-to-thing electricity micro payments using blockchain technology

Abstract

Thing-to-thing payments are a key enabler in the Internet of Things (IoT) era, to ubiquitously allow for devices to pay each other for services without any human interaction. Traditional credit card-based systems are not able to handle this new paradigm, however blockchain technology is a promising payment candidate in this context. The prominent example of blockchain technology is Bitcoin, with its decentralized structure and ease of account creation. This paper presents a proof-of-concept implementation of a smart cable that connects to a smart socket and without any human interaction pays for electricity. In this paper, we identify several obstacles for the widespread use of bitcoins in thing-to-thing payments. A critical problem is the high transaction fees in the Bitcoin network when doing micro transactions. To reduce this impact, we present a single-fee micro-payment protocol that aggregates multiple smaller payments incrementally into one larger transaction needing only one transaction fee. The proof-of concept shows that trustless, autonomous, and ubiquitous thing-to-thing micro-payments is no longer a future technology.