Using Bitcoin For Payments
P2P
One of the first uses for Bitcoin is peer to peer payments. The first thing Bitcoin was used for was sending payments from one person to another person online for pizza, drugs, information, payment for work and even cyber attacks. The ability to send a payment from person to person (P2P) without middle man interference is the first phase of Bitcoin use.
P2M
The second phase of Bitcoin use is person to machine (P2M) payments. This is when a person pays a vending machine for food, a person pays a self driving taxi to drive them somewhere or when a person pays a door to unlock. One example of person to machine payments has been demonstrated in a technology called BitSwich created at Bitcoin Kinetics. The ability to directly pay service machines, vending machines and access devices without a middle man, opens up a new challenges to security, opportunity and incentives for expected behavior in persons & machines.
M2M
The third phase of Bitcoin use is machine to machine (M2M) payments. This brings an even more immersive data rich grouping of transactions into the Bitcoin ledger known as the Blockchain. Secondary & Third layer protocols over Bitcoin have been tested and used for some time now including Counterparty, OMNI, Lightning Network, all able to handle the the large amount of transactions from billions of IoT devices, evolving networks and data intensive sensors around the globe.
Bitcoin Payments Evolving
These three phases of Bitcoin use from P2P, to P2M and to M2M will evolve Bitcoin dramatically. First as a currency, in the eyes of the people, second as a payment system for the machines and then as an inventory ledger in society keeping everything in sync & on time. The switches, clocks and gateways of the machine world follow a distinct logic that can be simplified into a transaction based history & history based action.
Phase 1
Peer to Peer payments began with pizza, doxing & drugs. An easy way to pay for things without credit cards online, such as a pizza, giving the unbanked the ability to eat. A safe way to pay for information or data without giving up your personal identification for that data. A new way to buy drugs, weapons and magic the gathering cards without anyone freezing, reversing or taxing your payment.
Phase 2
Peer to Machine payments began with tools like BitSwitch, first showcased in a washing machine, modified to turn on from of a $1.00 BTC payment to a designated Bitcoin address. This demonstrated the ability to interact with a machine directly, using Bitcoin, for both payment & logic instruction given to the machine simultaneously. Without a middle man involved with the device, the person paying is now directly interacting with the machine, this is done for security and assurance of machine response.
Phase 3
Machine to Machine payments are being developed now by many companies using a multitude of different methods. This allows automation to follow accounting principals, logical economic models and using artificial intelligence, allows for financial integration into the Internet of Things. One example is a self driving car can now pay for gas without a credit card or cash. Another example is a security robot can pay to connect to WiFi in the event it loses cellular network service. One important example is you can give a drone Bitcoin, it can fly somewhere pay another robot for food and fly back to you with your order. This process structure allows for live accountability, secured payment integrity & instant automated response to transaction data.
