Following up on part one of this series, we're moving on to discuss blockchain and cryptocurrencies in more detail. Here at CounterPath, we're still in the preliminary stages of blockchain research, but here is a brief overview of how it will work.
Micro Billing Transactions
As described above, new service billing options will allow end users to be invoiced in a micro transaction, directly related to service usage and split up in ways that, crucially, suit the customer’s requirements. For example, I may not want to pay for an entire year’s subscription to “all-you-can-eat” screen-sharing and conferencing at price X, when I can pay infrequently based on time and duration of use, and numbers of participants, along with whether I choose HD or standard content. This is already applied in other industry segments – if you choose to rent an Amazon or Comcast video, you are often offered HD or standard versions, each with a different price.
Blockchains are decentralized and distributed digital ledgers, specifically designed to allow transactions of any nature, to be recorded in a way that is immutable. This provides the audit trail we need to see what CounterPath services have been requested, and to enable the correct fees to be applied to the VAR or end user. As there is a chain of secured transactions, part of which may be the upsold and non-CounterPath products that the VAR offers as part of their extended service, this gives the customer, the VAR, and CounterPath everything they need to be assured of the validity of the transaction and the identity of the customer. So we can be confident that only those that have paid, receive the service due. Of course, this is bi-directional, ensuring those that have paid receive what they expect. Fraud and service misuse, already present in many other service environments, is significantly mitigated if not removed entirely.
The use of smart contracts within this environment also allows discounted or multi-tier services to be offered based on a broad range of options, subsequently triggered by the smart contract script. For example, initially infrequent followed by bulk use of screen share, collaboration or other such services may be automatically discounted as part of a smart contract arrangement. This discount can be applied directly and without further engagement, as use of the service fluctuates around preset triggered thresholds.
Authentication and Authorization with Peer-to-Peer Distribution
The blockchain approach also enables identity authentication and authorisation as a one-off process. Thereafter, that initial secured transaction assures that the person or company requesting the service is really who they say they are and no further authentication is required. This has significant impact when we consider the increased mobility of our users. As they traverse networks, countries and regions their services and profile moves with them, transparently but securely.
One other aspect of blockchain propagation also leads to an elegant solution for authorization as an alternative to trusted third-party servers. Blockchain uses a peer-to-peer approach for distribution and synchronization of the blockchain transactions. When coupled with service slicing and loaning or sharing of those services amongst other users, this can be a complicated problem to solve if users do not want to use a trusted server hosted in some remote location and shared or timestamped tokens, such as OAuth 2.0 (via OpenID Connect or UMA).
For example, if I subscribe to a screen share solution, and wish to allow a colleague to use the subscription, I would typically have to provide them my login credentials. This is normally not allowed by the terms of service and in general is not an advisable solution. A CounterPath blockchain alternative would be to provide a micro-loan transaction between the two people, independent of a third party server, which authorized the use of the screen share solution for a period of time, or limited number of uses. The blockchain would then be used to authorise, authenticate and distribute that “permission note”. This would take the form of actual payment for use of the service subscription owned by the first party, or an alternative virtual currency transaction that has minimal or no intrinsic value for providing access, but carries the provisioning and permission details for the service. As both parties are using their private keys, this would not be reusable by anyone else, and a smart contract could be used to limit the duration or frequency of use for the permission. Blockchain transaction processing requires some payment during the verification of the transaction (the mining) and associated handling fees, so there would need to be some payment attached for it to be part of the existing blockchains.
An example of the sharing process in today’s services might be subscriptions such as the Readly magazine app, or Microsoft Office 365, whose users are actively encouraged to share the service, which can mitigate the cost. However, both these solutions require users to identify and authenticate directly with Readly servers or Microsoft platforms. It is not designed for micro or temporary usage, and is unsuitable if you do not wish all your details stored at these companies servers.
Blockchain offers an alternative to this through its native peer-to-peer design.
Stay tuned for the final instalment of this blockchain series, where we wrap up our thoughts on crypto!
In the meantime, be sure to visit our website to learn more about CounterPath: