What if you wanted to use a Bitcoin transaction as a “trigger” for an event, to communicate information rather than to send money? How would you identify that the transaction took place and confirm that it came from the correct party? This is the start of this week’s âBitcoin Class with Satoshiâ episode with Xiaohui Liu of sCrypt and Bitcoin creator Dr. Craig S. Wright, the latest in a series of educational video tutorials for developers.
This week’s episode also involves a Bitcoin concept that has been around since the whitepaper, but its capabilities are rarely understood. That concept is Simplified Payment Verification (SPV) – a way to verify that events have occurred without using what Dr. Wright calls the âdumb conceptsâ of chaining or each user running their own node.
– xhliu (@sinoTrinity) May 11, 2021
âI send you a transaction and you send it to the blockchain,â says Dr. Wright. But on top of that, you can monitor and filter transactions to use only the ones you need. This may require a system of personalized alerts, triggered by hierarchies of Bitcoin addresses known (or verifiable) only to the parties involved.
âHow is this better than existing services like AWS?â Xiaohui asks. Dr. Wright explains that it’s useful for security – it’s harder to attack someone if you don’t know where they are, how they’re connectedâ¦ or even necessarily who they are.
Intermediaries yes, but no trusted third party. Keep that in mind. Bitcoin is not about trying to weed out middlemen who “efficiently aggregate services” (like real estate agents), that is not the purpose of Bitcoin.
Secure, private and pseudonymous communications can be important between businesses that need to keep their contact details private, especially when sending potentially confidential information over the open Internet. One party could guarantee that a transmission came from that source, or even form a point-to-point VPN – which is possible now, but with Bitcoin this can be temporary, include changing addresses, between parties that do not. unfamiliar with, or be used only for specific information. Participants in transactions don’t even have to be human; they can be IoT devices and / or automated systems.
Dr. Wright points out that these transactions are still not completely anonymous, rather âhiddenâ or with an âidentity protected by a firewallâ. An analyst could at some point in the future (with considerable effort) use Bitcoin’s audit trail to examine at least part of what the parties to the transaction were doing.
Imagine a software update – rather than relying on a certification company that could be compromised (like the infamous DigiNotar), a company could push verified software updates based on a set of root keys formed from it. information shared between that company and the customer. Addresses can be much more dynamic than this single digital certificate, changing often or being used once for specific purposes.
The information transferred between the parties or used to verify it may be Bitcoin tokens. The initial contact could be made with the information specifying how to perform the verification using the information available only to each party (so even if this process was intercepted, the attacker could not know it).
Instructions like “this is how I will browse the network, follow me” would become possible. These processes are cheap enough on BSV that they can be used for any type of communication, from confidential business and government operations to chat apps and social media. All kinds of networks could benefit from dynamic but secure connections.
There is a lot of value in being able to easily verify the identity of a party without necessarily knowing it, nor having to verify it all the time.
“Is this my key on the blockchain?” Yes or no. Is it valid? Yes or no. “It’s that simple, says Dr Wright. It’s what is possible using Bitcoin and SPV monitoring, and in a more secure and cost effective way than any existing system. – but the exact uses and processes for performing these actions are up to the developers to build.
‘Bitcoin Class’ goes far beyond the basics we’ve come to understand about BSV and its uses, discussing ways to form complex automations by extending it far beyond what’s happening on the blockchain itself. even. There are no easy solutions, but Bitcoin offers more options in a world where electronic networks are becoming increasingly difficult to trust.
New to Bitcoin? Discover CoinGeek Bitcoin for beginners section, the ultimate resource guide to learning more about Bitcoin – as originally envisioned by Satoshi Nakamoto – and blockchain.