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Bitcoin’s synergy with TCP:IP

The considerations in the Bitcoin protocol for an IPv6 future truly show the networking and engineering foresight of Satoshi Nakamoto. Though little was communicated about its synergies with IPv6 there are some immediate facts which demonstrate the thoughtful design.

Upon its release in 2009, the Bitcoin system was so ahead of its time that it contained design considerations to integrate it with a version of the Internet protocol suite that was still only just over the halfway hump to global adoption 13 years on.

The early history of Internet protocols

The Internet Protocol Suite is a set of communications protocols to interconnect network devices on the Internet. The suite is commonly abbreviated to TCP:IP after the two tightly coupled protocols, the Transmission Control Protocol (TCP) and the Internet Protocol (IP) but there are a few other protocols like Uniform Datagram Protocol (UDP) which are part of it the suite as well.

TCP:IP was formerly adopted as the standard for all military computer networking by the Department of Defence in 1982. While there was still over a decade of contention between nations, organisations, engineers and academics over which standard would result in the best and most robust networks, eventually and probably aided in part by the DOD adoption, TCP:IP became the de facto standard.

Internet Protocol version 4 (IPv4) was released in 1982 and at the time the nature of the industry probably left many to imagine that the 32-bit space for an IPv4 address was going to be enough for all the military and university machines that would need to be connected.

Considering around half of the 4.3 billion unique addresses of the 32-bit IPv4 address spaces were reserved for military uses, a few visionaries noticed that we were going to run out of addresses in the future.

Within a few years the Internet Engineering Task Force (IETF) was already working on developing a remedy to this as IPv6 which was released as a standard in 1995.

Because many commercial entities had architected their networking solutions relying heavily on IPv4, many opted for temporary solutions such as Network Address Translation to increase the IPv4 address space. These kind of ‘solutions’ were ultimately little more than kicking the can down the road and caused a whole raft of security and performance issues that still plague the Internet today.

Considering how often people are susceptible to the sunk cost fallacy and how chaotic it can become in multi-party decision making, it’s no surprise that getting adoption without top-down directives has been rather challenging.

Bitcoin’s creator prepared for the next evolution of the Internet protocol

IPv6 had to prove itself against a host of boondoggle hacks as it gradually onboarded more and more traffic on merit alone. In this respect, there are quite a few similarities to the adoption of the Bitcoin Protocol.

Though released by an individual rather than the IETF, Bitcoin was still essentially a leaderless protocol. The push to communicate the merits of the protocol came from evangelists and visionaries who could see the advantages of disintermediating third parties from digital financial transactions.

The considerations in the Bitcoin protocol for an IPv6 future truly show the networking and engineering foresight of Satoshi Nakamoto. Though little was communicated about its synergies with IPv6 there are some immediate facts which demonstrate the thoughtful design.

Bitcoin was initially released with IP-to-IP for when payments were to be made to an online destination. This was intended to be the main mechanism rather than the pay to bitcoin address methodology which was reserved for payments to an offline destination but has become ubiquitous since.

This model would have seen peers heavily leverage the simplified payment verification paradigm to exchange Unspent Transaction Outputs (UTXOs) directly with one another as an electronic cash system. Data could be embedded in these transactions via the PUSHDATA opcodes in chunks up to 4.3GB in size.

Interestingly 4.3GB is the largest size of a jumbo packet which could be transmitted as a TCP chunk in v6. Multiple 4.3GB chunks can be added in the inputs of a transaction where they are then concatenated and evaluated such as for matching a hash of a larger file.

As this synergy between the two protocols is exposed further and further, many IPv6 evangelists are suddenly finding dreams of how the Internet could work that they had almost written off as impossible, are now achievable.

Microtransactions – unlocking the Internet’s true value

The holy grail of the Internet was small casual micropayments. When your Bitcoin wallet can also natively generate the later bits of an IPv6 address, it natively embeds the payment protocol into the transport layer of data transmission. There is even an available 402 error http error code to denote payment is required before content on the web can be served.

Due to the abundance of IPv6 addresses and Bitcoin public keys, each session of an application can come from an entirely new IP address and transact from a fresh public private key pair.

That paradigm means there is effectively zero possibility for packets to be sniffed. With the 64-bits of address space for devices on a subnet, for someone to look for traffic it’s impossible to monitor the entire space and your messages have very little chance of being observed.

Other synergies with protocols are also present such as with segment routing (SRv6) within the transport layer which means the data packets of TCP can be encapsulated as inputs and outputs in bitcoin transactions with malleable digital signature schemes which can allow for payment to incentivise route finding optimisations.

The reality is that while we are aware of some things that can now be done, we are nowhere near able to conceptualise all the things that will now be made possible.

We hear many early Internet users lamenting at the state of the Internet today. Even seniors of regional Internet bodies are basically writing off the Internet in its current implementation as a failed experiment. 

When these people are shown the potential that is unlocked, their eyes light up and their brains whir into gear.

These are the type of people that will extend this relationship into the future and bring their realities to form.

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