IPv6 and Bitcoin were made for each other – while BTC misses something

We’ve heard a lot about IPv6 lately and how the internet’s communication protocol can work with Bitcoin’s own protocol to make payments more secure, direct and private. Despite the myriad of words about IPv6 and Bitcoin in 2022, it is not a new idea. Integration with IPv6 has been part of Bitcoin’s roadmap from the start, and Bitcoin creator Dr. Craig S. Wright has encouraged Internet users to use IPv6 for decades.

IPv6 makes IP-to-IP transactions usable

In the 2008 White Paper, Satoshi Nakamoto described IP-to-IP transactions as the primary way to send payments with Bitcoin. Using a public “Bitcoin address” (a hash of the private key) and broadcasting the transaction to the entire network was a secondary method in case one of the parties was offline at the time.

However, the Bitcoin addressing method has since become the most well-known and is now the only way to send and receive Bitcoin transactions. No one really understood the purpose of IP-to-IP transactions, and the original process had security flaws. Since BTC Core developers lack foresight and imagination, and see Bitcoin only as a network of node participants instead of average users, BTC Core developers removed this functionality from the protocol in 2011. A screenshot of their conversation at the time (in this article here) showed that they never understood why it was there in the first place and had no intention of fixing or developing it.

If you needed further confirmation that BTC “is not Bitcoin” and have undermined Satoshi Nakamoto’s original vision, this is it.

Dr. Wright “never gave up hope of this, and nChain has been busy.” He has described IP-to-IP as the most efficient way to send Bitcoin transactions.

At the end of 2018, he published a series of articles on the subject and detailed how IPv6 could finally make Bitcoin’s IP-to-IP transaction plan usable – and how Bitcoin could finally deliver the Internet’s promise of payment functionality, embedded at a basic level.

The true purpose of Bitcoin’s IP-to-IP transactions is slowly becoming clear – too late for BTC, but since it was removed. BSV’s enormous computing power and scalability, plus its new SPV framework (eg LiteClient Toolbox) make it possible. It’s not just about payments either. All data can be exchanged and registered on the blockchain, with transactors deciding what information is shared and with whom.

Multiple unique addresses and built-in security

IPv6 has two major advantages here over IPv4. Although IPv6 has been around for decades, much of the Internet still uses the old communication protocol, IPv4. (If you’re wondering, there is no “IPv5.” This number was skipped to avoid confusion with Internet Stream Protocol version 5. An experiment that was never released publicly.)

IPv6’s first advantage is the one everyone knows best: instead of 4 billion unique addresses (of which 2 billion are usable), IPv6 allows almost infinite addresses. 2-4 billion IP addresses do not even cover the world’s population, let alone the tens of billions of extra devices that interact.

Individuals and devices cannot communicate (or act) directly with each other through IPv4 because they have to share addresses, usually via NAT (network address translation) which uses modified headings to identify them. IPv6 would give every device and person on earth a unique address and even allow billions of new / alternatives. This allows them to identify each other. In addition, hackers would no longer be able to “sniff” for security holes by scanning each IP address since there would be too many.

The lesser known (but more interesting for Dr. Wright) aspects of IPv6 are its built-in encryption and security. IPv6 makes Internet Protocol Security (IPSec) mandatory, along with all encryption code, and has endpoint authentication.

According to Wikipedia, IPv4 was “designed with few security provisions”, and requires several additional solutions to protect traffic. Examples include the now discontinued SSL (secure sockets layer) and TSL (transport layer security), which use inaccurate security certificate models and require developers for each application that uses them to handle security and authentication. This has led to many problems, to say the least.

IPv6 has built-in security protocols such as cryptographically generated addresses (CGA, also known as “privacy extended addresses”), an Authentication Header (AH) and Encapsulating Security Payload (ESP).

According to Dr. Wright, this enables automated machines to negotiate security and communicate with each other, and even control machines without knowing where they are.

“We may actually have a system that is difficult to find, let alone hack,” he said.

Reach out to IPv6 default groups

Groups like the IPv6 Forum have been working hard over the last couple of decades to finalize IPv6 standards and train system administrators on why they need to implement it soon. This naturally involves a lot of network reconfiguration work, both in front of a screen and physically with network hardware, as well as learning, and therefore IPv4 still exists.

All this is changing as the need for and benefits of IPv6 become more widely known. Dr. Wright has recently been very active on the subject, speaking on standard forums and engaging with members. The reception so far has been very positive, with influential participants talking publicly about how BSV and IPv6 could work almost seamlessly together, strengthened by IoT technologies and ever faster 5G / 6G wireless networks.

It is only possible with BSV blockchain

If IPv6 and Bitcoin’s IP-to-IP transactions create new opportunities for blockchain / digital payment integration, why must that blockchain be BSV? There are several reasons.

The first and most important is that the blockchain network must be scaled – both to handle huge amounts of data and make it a minimal transaction fee. So far, BSV is the only network that has achieved these achievements in a meaningful way, while remaining robust and secure.

Second, it requires something like Bitcoin’s simplified payment verification (SPV) to make transactions fast to process and reliable, even when a party is offline. Ordinary people should not have to run mining nodes or keep copies of every Bitcoin transaction ever made in the world just to use Bitcoin.

In addition, the blockchain network requires a solid framework to make SPV processes easy for any developer to build into their apps – to handle authentication and messaging. LitecCient Toolbox allows developers to easily integrate SPV into their applications.

All this means that Bitcoin becomes a network of actual users, not a network of nodes and miners. These users can have extra confidence that their data is secure and remain their own, instead of “trusting” them to social networks and other Silicon Valley companies. IPv6 is the way the internet should work, and BSV with SPV is how Bitcoin should work. It’s almost as if they were designed for each other – after all, Dr. Wright did this on purpose back in 2008, and it’s still the world’s only solution today.

See: Presentation of BSV Global Blockchain Convention, IPv6-bsed 5G / 6G, IoT and Blockchain

New to Bitcoin? Check out CoinGeeks Bitcoin for beginners section, the ultimate resource guide for learning more about Bitcoin – originally proposed by Satoshi Nakamoto – and blockchain.