We are excited to announce we’re drawing closer to launching payments on Mysterium Network. How will micropayments work within a decentralised VPN?
Payments are a crucial element of Mysterium Network. As such, we needed to design a solution which was capable of meeting real-world requirements of scalability and affordability. This system also had to comply with the ethos of decentralised ecosystems. These are two opposing forces, with no solution fit for Mysterium Network readily available in the market.
There was no easy way around it for us. But we believe we found a solution that fits these requirements.
This is more than just an exciting milestone for Mysterium Network We have worked extensively towards this moment for the better part of the year and are almost ready to deploy it.
Core challenges in designing payments for Mysterium Network:
Payments in Mysterium Network need to be lightweight and fast while honouring the core fundamentals of blockchain-systems: transparency, fairness, openness, protection from double-spending and fraud. It has to do all of this without relying on any centralised entity – making it trustless.
This trustless element has been the hardest goal to achieve by far, yet the most crucial.
Once deployed, payments will ensure that users can transact with one another autonomously, without a need for an intermediary (including us). If our attempt is successful – users won’t have to trust each other either. Instead they will trust in the network’s built-in economic game which is designed to incentivise everyone to cooperate. (Learn more about the distributed trustless ethos here).
Very soon we will start to introduce various components of Mysterium payments onto the testnet, so you can experiment and become familiar with how it’s all going to work (more on this later in this blogpost). Eventually the goal is to launch on the Mainnet with MYST tokens.
We work relentlessly towards such high standards because we believe it will help achieve our mission – to provide a secure and open internet for all. We understand the potential power of decentralized technologies to bring value and opportunity to people everywhere, but making them actually usable in real-world conditions is a challenge not solved by many so far.
Our quest to find the best P2P payment system
The architecture of our micropayments system is a fusion of research and experimentation with existing Layer 2 solutions. This eventually led to us building a home grown one, based on all our findings.
It first began as a research and development project as we strived to find the best design for fast, secure and trustless P2P payments. While blockchain payments are (generally) secure, censorship resistant, and have an open and permissionless APIs, they’re still relatively expensive and slow. And that just didn’t work in our case.
This lack of scalability – a network’s ability to grow and handle a growing number of users – means at a certain size the network will get clogged up by all the transactions being processed. Due to this, an Ethereum transaction could cost up to one dollar and take a couple of hours to be ‘settled’ in a block. These transactions get even more expensive when the network’s processing capacity becomes saturated. These limitations are unsuitable for the VPN service provided by Mysterium Network, which require fast, frequent and very small transactions – known as micropayments – executed on a global scale.
We analysed various Layer 2 solutions – independent networks or chains running ‘on top’ of the original blockchain to avoid it becoming too crowded. But none of these fit our particular use case. They were either still in their very early stage of development, too insecure or overly complex, or built for general use cases, making them non-optimal for Mysterium Network’s use case. These barriers led us to start working on a completely new payment system from scratch.
Developing a unique P2P payment system is not an easy task. Our goal was to create infrastructure which best serves the needs of both consumers of Mysterium Network, and nodes in the network.
Here are the main requirements of our proposed system:
- High throughput – the network’s ability to handle frequent and small payments (eventually thousands per second)
- Support for our native utility token, MYST
- Anonymity while also being secure, such as through the use of identity registration and reputation system
- Great user experience, removing as much complexity as possible for the end user.
Going back to the trust conundrum, we also had to consider that consumers won’t pay a large amount up-front and the service providers (nodes) are unlikely to offer their services without prepayment.
This is why we use a micropayment system, which lets nodes offer their service in short intervals, such as 20 seconds or 5 minutes. This pay-as-you-go model means that participants can start transacting straight away. A user can pay for a VPN service a couple of times per minute, sending (and therefore risking) only tiny amounts of tokens in exchange for the bandwidth they are renting.
The “Mysterium Accountant” concept and an introduction to payment promises (digital IOUs)
Our proposed solution fuses together the technologies and methodologies used by other payment solutions, such as State Channels. However, we are introducing a new party to the network called “Mysterium Accountant”. The Accountant will verify ‘payment promises’ made by consumers to nodes.
Instead of users constantly paying nodes in high volumes, consumers can make ‘promises’ to providers, similar to IOUs. These promises are “verified” by Accountant. The Accountant has a record of each consumer’s actual balance and funds, as well as a record of all of the promises made. When node runners decide they want to settle the account, the final tallied record is executed on the blockchain and sent as a single transaction.
Mysterium Accountant plays a similar role to a ‘hub’ between consumers and nodes. In saying that, it cannot use or freeze user funds. It’s only function is to verify the payment promises. This introduction of the “Mysterium Accountant” also takes our network one step closer towards becoming a trustless service.
As these micropayments are ‘promises’, rather than on-chain payments, we reduce the amount of transactions sent to the blockchain. This allows the network to handle much larger volumes of users and transactions, making our network faster and more scalable. This is our lightweight solution for micropayments. With it, we aim to provide hundreds of thousands of transactions per second!
To make sure we still honour decentralization, we designed the system in a way so there can be multiple Accountants existing in the network at the same time. It’s a very broad concept to explain within one post, so more will follow with much deeper explanations.
You can also dive deeper into specific concepts in our micropayments whitepaper.
What happens next?
We’re currently working to implement this payment solution on our tesnet. You will gradually see payment options in our various interfaces and applications. At first, as we migrate to this new payment model, nodes and users won’t have to do anything. Eventually you might see various engagement elements, such as a ‘top up’ button in a Mysterium app, new functionality in SDKs and so on.
Upon launch, we will assign newly minted tokens to each user on the testnet so heyou can experiment and play with this system. As with all new technologies, there will be an ongoing process of revising and iterating. We hope to learn a great deal about possible use cases, edge cases, abuse angles and on and on. We welcome your play and feedback, as it will be vital for us in getting ready to release usable and secure payments on the mainnet with actual tokens.
With the introduction of micropayments on mainnet we aim to create an incentive for both consumers and nodes to meet on the Network on fair terms.
Eventually Node runners will begin to receive tokens as they rent their bandwidth, applying pay-per-use model, moving away from monthly bounties. Future payment and charging models may be adapted as our network starts to operate in real-world market conditions. Nodes will be able to withdraw funds to their personal wallets.
As the whole network will be open in nature, it will open up the possibility for anyone to create better user-oriented apps, incorporate privacy into all sorts of services, create a better user experience for withdrawing earnings, add more use-cases for nodes, and more.
A big thank you to our current node runners, who are the backbone of our network and are helping us to build the foundations for an open and uncensored internet.