How do you speed up a blockchain to support micropayments between things like sensors and devices?
That was the question for Bosch researchers exploring the Economy of Things, in which IoT devices will need to buy and sell to one another.
In 2017, the researchers came across Perun, an early layer-2 protocol that passes state information off-chain through virtual channels. Bosch joined forces with several academics to implement this protocol and start creating an ecosystem, using a step-by-step strategy for open source.
The project joined Hyperledger Labs in 2020, and the partners have now demoed Perun running with Ethereum, Polkadot, and Cosmos blockchains. The university spun off a new company, PolyCrypt GmbH, with funding from the German government.
Perun was one of 2021’s 10 most active projects in Hyperledger Labs with developers completing an SDK and a library for embedded devices. Perun is now available for anyone looking for a fast, proven protocol to support micropayments.
Some years ago, IBM researchers realized that IoT devices would need to buy and sell from one another. In this “Economy of Things,” the items to be traded will include power, data, and connectivity. Most transactions will be fast, low value, and high frequency.
For a company like The Bosch Group that’s active in everything from autonomous vehicles to thermal plants, the Economy of Things will touch many lines of business. That’s why the company’s advanced research group, Bosch Research, was looking into the Economy of Things in 2017.
The first challenge was creating a secure platform to support automated micropayments between “things.” Naturally, this suggested distributed ledger technologies (DLTs) such as blockchain.
“We want to create a fair marketplace where everyone can participate, not a monopoly,” notes Chris Hoeppler, Open Source Officer for Bosch Research. “And we thought one of the technologies that might help would be DLTs.”
But blockchains don’t scale well. Reaching consensus on a transaction takes time. And tiny IoT devices have limited power, memory, processing, and connectivity. They certainly can’t run heavy code.
How could any blockchain possibly work around all these constraints? And how could Bosch help pioneer the standards needed for IoT devices to buy and sell among themselves?