A new project that transmits bitcoin payments over the radio is up and running in Finland - and it's also transmitting a national Finnish cryptocurrency at the same time.
Kryptoradio is a data transmission protocol designed to transmit low-bandwidth information over one-way digital broadcast networks.
Joel Lehtonen, the project's founder, said he is focused on using Kryptoradio to transmit block chain information. The project is currently halfway through a two-month pilot phase in conjunction with Finnish broadcaster Digita, which allows the system to transmit bitcoin transaction information across its digital radio network.
Bitcoins via radio
The project transmits the data over the DVB-T network, which is a digital audio and video broadcast network used by TV and radio broadcasters around the world.
Kryptoradio's back-end computers connect to the block chain and turn the latest block's transactions into a data stream. This is then broadcast over the network, where it can be picked up by a Linux computer connected to a DVB-T receiver at the other end.
But why do any of this? Tuomo Sipola, who works with Lehtonen at a technology co-operative called Koodilehto, explained that one-way bitcoin block chain broadcasts offer a mixture of robustness and reachability. It's useful for anyone taking bitcoin payments, he suggested, as they don't need a constant Internet connection.
"Its a unidirectional technology, so the person who is selling something needs only to receive the payment information. Receiving a broadcast, you just listen to it. You don't have to subscribe to some mobile plan."
Paying for chocolate via radio
Where and how would this be useful? One possible use case could be vending machines, which sell everything from chocolate bars to laundry cycles.
If you own a vending machine and want it to accept bitcoin, but don't want to pay for a mobile Internet connection and associated modem, all you would need with Kryptoradio is a low-cost integrated DBV-T receiver and a pared-down Linux hardware subsystem.
The user would still need to have a mobile connection to use their own digital wallet, but your vending machine would be able to take zero-confirmation transactions entirely offline.
When you, as the machine's owner, want to spend those bitcoins later, you could sell them for fiat or conduct bitcoin transactions in the normal way from an Internet-connected device.
The other option would enable any bitcoin-accepting vendor to receive payments from anywhere in the world, even in remote regions where mobile data coverage wasn't available.
Transmitting a national currency
Kryptoradio isn't transmitting the whole bitcoin block chain over Digita's network, but it is sending a variety of items. In addition to serialising transaction blocks, it's also sending Bitstamp's order book and pricing information from BitPay in a communication stream that amounts to just 7.5 Kbits/sec of bandwidth.
That's not all, though. The project is also handling an entirely different cryptocurrency called FIMK, which is a spin-off from second-generation cryptocurrency NXT. Its founders describe it as "a basic income plan for national distribution of a portion of the currency to Finnish citizens."
The organisation behind FIMK, Krypto FIN ry, is paying a basic income of 100 FIM per month to anyone in Finland over 15 years of age that registers with the platform.
"With FIMK, we are using a simplified format which is not for full nodes, but contains everything needed for receiving payments via FIMK too," Lehtonen said.
Krypto FIN ry is sponsoring the Kryptoradio test phase for an undisclosed sum, but Sipola said this phase will finish at the end of October. After that, more funding will be needed - Lehtonen hopes to talk with investors that understand and support cryptocurrency concepts.
A backup for bitcoin?
Reach and convenience is one benefit of the system, Lehtonen said, but the other is robustness. It provides a second channel for transaction information, beyond fixed line or mobile Internet access, which serves as a useful backup for bitcoin node operators.
"The signal is useful for bitcoin node operators, who can add fault tolerance by connecting to Kryptoradio in addition to Internet."
Presumably, the DVB-T transaction data could also become a point of authority on the Internet, delivering a 'clean' set of blocks to bitcoin nodes. This could help to prevent Sybil attacks, in which malicious nodes try to convince a sufficient number of other nodes that their fraudulent transactions are real, effectively forking the block chain.
This isn't the only attempt to create a robust alternative channel for the bitcoin network. Bitcoin core developer Jeff Garzik is also pursuing his BitSat project, which proposes to use CubeSats as a means of transmitting bitcoin block chain information to nodes around the planet.
Network first, hardware later
This is all very exciting, but it won't be much use unless people are listening, and they'll need the hardware for that - but the average retailer isn't about to rig up a Linux box and a DVB-T receiver on their own.
Addressing this point, Lehtonen said:
"The system is open for everybody to develop these kind of devices. Our current plan is not to go into [the] hardware business, but we would like to co-operate with others. Currently we have been busy with the transmitter part so this is something we need to focus on at the end of the pilot stage."
As for a business model, Sipola said that the pair have discussed some profit concepts, including premium services for clients or providing a basic payment confirmation service with a delay, but nothing has been decided yet. In the interim, they just want to get the service deployed for cryptocurrency enthusiasts to play with.
This could be another step along the way to a more usable bitcoin standard if a convenient and user-friendly client-side receiver could be developed. If Lehtonen builds it, it will then be up to the developers to come.
Radio transmission image via Shutterstock