Or, as Latif Ladid put it, we are approaching the age of IPv6 and, with it, the more colloquially termed age of web3. If you haven’t already caught his talk at the recent Global Blockchain Convention in Dubai, what the advent of web3 promises is the final realization of the internet dream of a truly peer-to-peer network.
What do we mean by peer-to-peer?
Well, unless you were born before the age of Bon Jovi, you wouldn’t know that the internet was not always a welcome idea among the government policymakers and big computing companies at the time it was introduced.
Originally started as a military network, and even after the protocol technology was released to the world, there was a lot of political pushback on introducing an open computer network. Many industry incumbents, such as large telecom and computer companies with a monopoly on computer communications, stood to lose influence. But thanks to the advent of the home PC, and the distribution of computational resources to individual homes, the potential for these nodes to be connected together in some way was a large opportunity. But due to lobbyists, governments (including the U.S.) were against an open internet until 1991, and popularizing the internet was one of the few things that we can actually give Al Gore credit for. It was only then that the development of the World Wide Web and the open internet started to gain popularity over the proprietary network technologies that companies like Novell, IBM, and AT&T were pushing.
We are living in that age now, where we have generations of young people who grew up in the world that started in 1991: the Information Age. Where information is always just ‘at our fingertips’ and floating in the airspace all around us. But the internet has been around for so long now and has become so ubiquitous that many have lost sight of the original dream that it exalted—peer-to-peer communications.
When the tech giants lost control over the network technologies and hardware markets, they shifted to the role of communication intermediaries. Few understand that when you use the internet today, you are not communicating directly with your peer. You are communicating with a proxy company, their internet service provider or ISP, who then forwards those messages to the receiver. This is much like the current banking system. When Alice transfers money to Bob, she just initiates a transfer request to her bank, which then sends instructions to Bob’s bank, and debits and credits are done accordingly. There is actually no involvement of Bob at all. Bob’s money is sitting in an account at Bob’s bank.
Although the banks are legally unable to take Bob’s money, they can refuse to accept transactions incoming to Bob in certain circumstances.
The banks are analogous to ISPs. You rarely, if ever, communicate directly with another network peer. Your ISP could block access to your PC or home devices if it was legally impelled to. This is why currently, while the internet is open, it is not truly peer-to-peer. This is because people don’t have their own publicly addressable Internet address due to the IPv4 address space being entirely staked by large companies and ISPs. With a total address space of just over 4 billion unique addresses and large swathes of the space reserved for private networks, there is no way we could ever give an address to every person on the planet, let alone every electronic device.
IPv4 is akin to real estate on Hong Kong island. Every square inch of the island has already been claimed, and it is the business of large companies to rent out space to individuals through the use of network address translation (NAT). While you are reading this article downloaded from the publisher, the publisher’s host server is actually at an internal address on their ISP, and your PC or mobile phone is speaking through your ISP’s public Internet address. You are both using the internet indirectly through your respective ISP’s service. Your ISPs are the real nodes on the internet, not you nor the publisher of this article.
Nobody cared about this for a long time, because people were only concerned about the messages and whether or not they reached their destination. But for true commerce, we need more than just message passing. We need to have provable legal identities verifiable at the network level.
If IPv4 is like trying to get real estate on Hong Kong island, then IPv6 is real estate on the surface of a Dysan sphere.
As Latif put it:
“If we were to distribute ten million addresses each second, it would take 58,000 years before we would exhaust all the possible unique IPv6 addresses.”
Enough addresses for every person on the planet(s) for all our communicating devices in the foreseeable future. The key point is that, with each person and device having its own unique address, we can finally realize the dream of the internet. To have true peer-to-peer communications and be able to conduct trusted commerce with no middlemen.
If you have followed along up to this point, you may have realized how similar this notion of unique addresses is with IPv6 internet and bitcoin. In fact, bitcoin, as designed and released in 2009, solved the problem of having unique addresses for every possible transaction and exchange. With this innovation, bitcoin was the first truly successful implementation of digital cash, which is also a peer-to-peer transaction (in contrast to the bank account analogy, which has middlemen). And though bitcoin the coin (if used properly) is peer-to-peer, the coins themselves were still being passed through the intermediaries1 of our existing IPv4 internet, the ISPs. But with IPv6, we finally have the ability to go fully peer to peer. Meaning we will be able to conduct trade, having complete trust in the other party because they have identified themselves and have a verifiable unique Internet address which is registered to themselves, a natural person. And with the addition of bitcoin addresses, we can have verifiable unique addresses for every unique transaction between each person/device.
Imagine what the future of commerce may look like
Alice in Canada wants to buy something from Bob, who lives in South Africa. They exchange communications through the new internet, using their IPv6 addresses. This, along with sufficient third-party Certification Authorities, which can verify and validate Bob’s identity with his IPv6 address for Alice, means that she can be sure that this address is really Bob’s and vice versa. Then using their identity addresses, through a Diffie Hellman process, they construct a joint pair of one-time (OT) use bitcoin addresses that they will use for this transaction. Alice funds her OT address, then sends the bitcoins to Bob’s OT address by passing the signed transaction directly over the internet to Bob’s client.
There is no ISP in the middle of the internet routing, and there is no bank in the middle of the coin transfer. The transaction is private. There is no way for anyone but Alice or Bob to know that the OT transaction addresses used were for this purpose. But importantly, if compelled by legal authorities to reveal the nature of the trade, either of them will be able to show and prove it because the addresses can be deterministically generated from Alice and Bob’s personal IPv6 addresses and the transaction invoice, which was shared between them.
It can be done if you need to show that this transaction was for certain goods, say for tax reporting. If you need to prove that it wasn’t for something else or with somebody else, you can. If Bob wanted to falsely accuse Alice of stealing, Alice could reveal this transaction to the public. As long as both parties remain honest and the transaction is not illegal, it remains perfectly private. This is what we want—total privacy, but with total transparency.
Most people, when faced with the idea that everyone will have exactly one internet identity address, like a passport or personal ID number, are afraid that this will lead to governmental abuse. Of course, we have all heard of the social credit system enacted in China. But if used properly, with IPv6-powered identity addresses and signed ownership of devices (with each their own IPv6 addresses), we can envision as a system where any device can talk to any other directly, where each party can provably know the natural person at the other end of the wire they are communicating with.
This will lead to a drastic drop in internet fraud and wire fraud occurrences, and honest people will generally not want to communicate with parties who do not want to provable verify their identities.
Additionally, if joint One-Time use Bitcoin addresses are used for transactions, then all transactions are private and cannot be discerned unless one of the parties decides to reveal the details of a transaction. Just knowing a person’s identity address does not allow one to see the transactions in which it participates.
This is the more connected and more honest future, which will see an order of magnitude increase in the number of digital transactions and trades of goods and services globally. This is the true promise of Web3, enabled by a scalable bitcoin, used in a peer-to-peer fashion, and integrated with legal and identity systems, all using IPv6 addresses as network identifiers. This is the new internet, the connected commercial world.
Wall Street Technologist
 Additionally, for the BTC core network, they further engage in the use of intermediaries on the bitcoin network itself, designing wallets that publish signed transactions to the node network and for the recipient to receive their payment through the node network as an intermediary.
Watch: Latif Ladid’s keynote speech: IPv6-Based 5G/6g, IoT and Blockchain
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.