SmartMesh Offline Payment with CBDC in Extreme Weather

The Problem

Digital economy, brought about by advancements in Internet and world-wide-web applications has brought convenience and economic benefits to many. Gone are the days when one has to make withdrawals at a bank and carry loads of paper money for purchases. According to Statista, the digital payments segment has a global transaction value of US$5,204 billion in 2020, and it is estimating that by 2023 there will be 1.31 billion proximity mobile payment transaction users worldwide, up from 950 million users in 2019. Such digital payment services are made possible by infrastructures such as telecommunications and the electric power grid.

These critical infrastructures, however, are extremely vulnerable to natural disaster and could bring the local economy to a standstill. As seen in a recent flooding disaster, ZhengZhou, the provincial capital of Henan province, was plunged back to the ‘Digital dark age’ after disaster wreaked havoc on internet and electricity. The infrastructures that once brought convenience are now culprits for the collapse of modern social and economic system. People could no longer make call nor send message to friends and family, and commerce was almost non-existent with people not being able to pay with cell phones and have limited cash on hand.

Such single and concentrated points of failure issues exist in today’s digital payment system which cannot function without the Internet. With digital payment continue to proliferate into our life, this pain point must be resolved before digital payment systems can be feasibly deployed worldwide especially in areas of intermittent internet or during emergency conditions.

The Solution

SmarMesh®’s HyperMesh™ solution addresses the single and concentrated points of failure by a cost-effective, decentralized and both vertically and horizontally integrated infrastructure comprised of edge-computing nodes and blockchain technology. Enabled by SmartMesh’s Spectrum™ blockchain and Atmosphere™ cross-chain architecture, HyperMesh™ can interoperate with any CBDC blockchain platforms to create an international digital payment system. Photon payment network, a SmartMesh Layer-2 protocols, enables transactions to be completed in a secure manner with or without Internet, allows communication and commerce to continue even in extreme situation like in a natural disaster.

Most decentralized solutions start at the blockchain layer and build up. In Contrast, HyperMesh™ is a highly vertical solution, encompassing both hardware and software stacks. HyperMesh™ addresses the fundamental hardware connectivity issue; the mesh networks, powered by MeshBox® indoor and outdoor WiFi routers, is self-contained and capable of providing local communication and payment services. They can also provide the last-mile connectivity working with existing Internet backhauls like fiber, cellular and satellites. This versatile hardware layer enables HyperMesh™ solution to operate without or with intermittent or limited internet connectivity.

The diagram above illustrates the differences between commerce done in a conventional digital payment system versus the SmartMesh® Photon Payment System.

In the conventional digital payment system, every consumer payment transaction travel through the internet to the bank backend system for authorization and then back to the POS terminal at the merchant shop to complete the transaction.  When the internet or telco network is down, no transaction can be completed.

Photon Network leverages a state-channel architecture which is secured by the Spectrum blockchain.  Some offline payment solutions create a temporary payment commitment when the internet is not available and can only finalize the transactions after verification on a blockchain or centralized system when internet becomes available.  In contrast, SmartMesh® realizes a reliable and secured offline payment solution for digital currency using Photon payment network, a Layer 2 architecture.  Photon is similar to Lightning Network on Bitcoin and Raiden Network on Ethereum, but with an important differentiation.  The SmartMesh® team has developed the offline transaction function by combining the existing Layer 2 Photon architecture and Layer 0 – the mesh network. This allows Photon transactions to be confirmed and completed almost instantaneously with or without Internet, without the need to interact with the Spectrum blockchain.

Atmosphere, the SmartMesh® cross-chain interoperability architecture enables transactions with CBDC to be done freely across other blockchains. Atmosphere is built with security and privacy as priority and has incorporated various technologies like distributed keys (private key of contracts is sliced and held by different notary), Hash Time-lock Contract (HTLC) atomic swap (ensure tokens lock-in only if contract has received matching secret from main and sub-chain within a timeframe), threshold signatures, homomorphic encryption, zero-knowledge proof and PBFT to build secure and stable cross-chain interoperability.  Atmosphere is suitable for a variety of application scenarios, including cross-chain exchange, cross-chain payment, cross-chain data access payment, private transactions, etc.

Central banks that are exploring issuance of CBDC have concerns over security and resilient of the delivery channel especially at the consumer level.  With Photon offline payment and Atmosphere cross-chain capability, SmartMesh® infrastructure can be the conduit between central banks, retail banks and mainstream users wherein transactions using CBDC can be conducted anywhere, anytime, under any internet conditions, all in a secured manner.

SmartMesh® is positioned to help emerging markets build the Value Internet and provide a comprehensive digital payment system for CBDC.  The ability to conduct offline payments is essential for emerging markets in Southeast Asia where network coverage is weak and unstable. SmartMesh® Photon payment network is also the foundation for IoT Machine-to-Machine (M2M) transaction and supports distributed high-concurrency payments in the Internet of Everything, where trillions of devices will use broadband, narrowband or integrated Space-Ground-Integrated networks to communicate and make transactive-IoT payments. Offline payment and transactions are even more indispensable in the Internet of Everything use cases.

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