Bitcoin, the cryptocurrency to beat, has found its way into well over a million digital wallets worldwide but it's yet to hit mass adoption. Finnish technology co-operative Koodilehto believes the answer to Bitcoin's search for wider accessibility and reliability could lie in TV and radio signals.
"We want to improve the availability of the Bitcoin network and offer an alternative that doesn't require an internet connection," Koodilehto's Tuomo Sipola says. "TV networks are very reliable, as they have been designed to work in challenging conditions almost anywhere."
Since early September, a pilot of 'Kryptoradio' — a data transmission protocol developed by Sipola and Joel Lehtonen — has been successfully transmitting Bitcoin transaction and exchange rate data in real time through Finland's digital national TV network.
The network, which covers the entire Finnish population, is run by Digita, which describes the partnership as an "interesting and exciting" way to open up "new possibilities".
"What we offer is one-way Bitcoin payment confirmation information and exchange data which anyone can receive through a standard digital TV device and our custom software," Sipola says.
Kryptoradio works by connecting to the Bitcoin network as a transaction occurs. Kryptoradio inspects the transaction and turns the information into a data stream which it sends over the Digita network. Each payment contains identifying information retained from the block chain, which enables it to be sent to the correct recipient.
On the recipient side, the broadcast is picked by a computer connected to any DVB-T receiver allowing Bitcoin payments to be accepted and monitored without an internet connection. Currently, any computers that use Kryptoradio must run Linux, but Koodilehto is looking at expanding support to other platforms.
Bitcoin everywhere and anywhere
According to Koodilehto, offering internet-free ways of trading Bitcoin makes the system more accessible and reliable. Kryptoradio won't suffer from internet outages, for example, and can be used in areas where internet connections are poor or where operators don't want to invest in mobile infrastructure.
Koodilehto claims in the future the service could be used to create Bitcoin counterparts for cash payment terminals, which can be utilised in everything from cash registers to vending machines. But for now the co-op is focusing on the transmission side and has opened up its protocol to encourage third party developers to get involved.
"We can send any kind of information we want, but at the moment we use very little bandwidth because Bitcoin data doesn't take up much space," Sipola says. "It's also possible to send text messages via Kryptoradio. There are many uses and applications beyond Bitcoin."
When the need to broadcast larger amounts of data grows, the DVB-T network can be scaled up to meet those needs, Sipola says. Currently Bitcoin protocol restricts block sizes to one megabyte but Koodilehto believes that handling 10 megabyte blocks won't be a problem in the future.
Kryptoradio isn't the only initiative aimed at finding new channels for Bitcoin: there are plans to build a Bitcoin satellite network, BitSat.
"We have many common goals with BitSat and we can share some software to achieve those goals. Our projects aren't competing since satellite signals are more difficult to receive in some environments," Lehtonen says. "By using two or three different ways to broadcast the information, just like TV programmes are available via cable, satellite and terrestrial, we can make the Bitcoin network more accessible."
Big players have also started to show more interest in virtual currencies.stated that Bitcoin could be used to strengthen existing financial systems and it is teaming with Bitcoin payments processor companies, including Coinbase, to start accepting the virtual currency.
While unsurprisingly financial institutions have shown concern over security, Kryptoradio believes the measures in place are robust enough for current transaction levels.
"We are using ECDSA signing, so we have digital verification of the origin of the broadcast and we can filter out their signal [if people try to misuse the service]. They can't force payment transfers," Lehtonen says. "The Bitcoin network has also its own way to prove the work of the network which means there is a double check in place."
Future challenges and protecting eggs
Kryptoradio aims to start its commercial development phase later this year, but Lehtonen says there are still several challenges to overcome before the system is ready for commercialisation.
"We have now seen that it can be done," he says. "The lowest level blocks are already there and now it's more about building on that and providing development services for other developers."
"We still need to do more testing to see what kind of receivers and antennas are needed. We might need to change our radio technology or transmission parameters so that the broadcast could move better through buildings. But these can be improved as the project continues."
Lehtonen and Sipola will also look at funding options after the two-month pilot phase. "One model we are looking into is selling air-time," Lehtonen says. "It would be a combination of sponsorship and business.
"It would also be nice to have an international broadcast to create more possibilities for developers. We are still thinking about the ways to do that and trying to find the right contacts."
While Krytoradio was built because of faith in Bitcoin, the founders recognise there's a long road ahead for digital currencies, and they're not putting all their eggs in one basket. The service has also started transmitting the Finnish FIMK virtual currency and the founders say other cryptocurrencies can be supported as can diversification into other field such as crisis communication.
"Bitcoin has the most traction of all cryptocurrencies available so I believe if any cryptocurrency system will break through it will be Bitcoin," Lehtonen says. "Its scalability issues are being solved and we believe Kryptoradio can be one of the solutions which helps to make it more usable around the world."