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Cc: Pierre-Alexandre Meyer <pierre@kill-bill.org>,
	Bitcoin Dev <bitcoin-development@lists.sourceforge.net>
Subject: Re: [Bitcoin-development] Extension for BIP-0070 to support
	recurring payments
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Figured I would have a crack at reviewing this since Mike is out for a bit.
It was great running into you guys at the bitcoin fair in SF! Small world :)

I like how simple this is. You just give it an url to fetch the next
payment request and a date to fetch it.

What should happen if the client tries to fetch the PaymentRequest early or
late? Does it become valid after some date and stay valid for some length
of time? Also, what should happen if the client tries to consume the same
PaymentRequest twice (or multiple times) during the same period?

I do not think daily/weekly/monthly is flexible enough. What do you think
about having a concrete start time and end time when the next
PaymentRequest will be valid? This also prevents the wallet from having to
remember when it last sent a payment and getting skewed over time.

When a wallet hits the polling_url to download the next PaymentRequest, it
seems we need a way to communicate an error code to the wallet, for example
if the server canceled the contract without the wallet knowing. Perhaps a
separate polling_status_url, with a corresponding ACK message to indicate
if the PaymentRequest is available. What do you think of that idea?

One high-level comment -- the wallet in this design doesn't have any way of
knowing when the payments are supposed to end. I feel this is important to
show to the user before they start their wallet polling infinitely.




On Sat, Feb 8, 2014 at 6:48 PM, Stephane Brossier <stephane@kill-bill.org>wrote:

> Mike, Gavin,
>
>
> We started to work on the merchant side to test the integration of our
> prototype for the recurring payments. We modified the 'Payment Request
> Generator' from Gavin to include a new check box 'set recurring'. We forked
> the code and checked in our modification here:
> https://github.com/killbill/paymentrequest/commit/e530f6ec528266aacfd076d7c3154ad39267c3f3
>
> We also found a few issues with the code diff that we sent yesterday for
> bitcoinj and checked in the bug fixes  in our fork-- so the diff sent
> yesterday is slightly outdated.
>
> So at this point we have a working prototype for bitcoinj and we are
> waiting for your feedbacks. We also started to look at integrating the
> protocol in Kill Bill to check that what is proposed supports indeed the
> business cases of a full recurring billing platform.
>
> Hope to hear from you guys soon!
>
>
> On Feb 7, 2014, at 6:57 PM, Stephane Brossier <stephane@kill-bill.org>
> wrote:
>
> Mike and all,
>
> Pierre and I just committed a prototype implementation of the recurring
> payment protocol using bitcoinj. You can find the diff on our fork:
>
> https://github.com/killbill/bitcoinj/commit/40c657c4191498f12539c60316116aa68af368a7
>
> We did not write the server (merchant side), but wanted to have some
> feedback before going deeper (merchant implementation and tests). We did
> our best to build it on top of the existing BIP-0070 protocol-- only a few
> additions in the messages, but no new calls and no new uri scheme. We
> created a new package 'recurring' where most of the new code lives.
>
> At a high level:
>
> 1. Creation of the subscription:
>
> The initial handshake for creating the subscription is exactly similar to
> the one for the payment protocol (PaymentRequest is used to provide the
> contract)
>
> 2. Wallet can decide to poll the merchants for its active subscriptions.
>
> Here the flow is exactly similar to the payment protocol but the wallet
> receives a callback to verify the payment matches the contract and should
> go through.
>
> Please give us some feedback whenever you have the chance. In the meantime
> we will start implementing the merchant side and test the code.
>
> Cheers!
>
>
>
> On Jan 31, 2014, at 10:13 AM, Mike Hearn <mike@plan99.net> wrote:
>
> That looks OK at a very high level. Things you probably want to think
> about:
>
>    - How to trigger it off the existing payment protocol (no new top
>    level messages or mime types or uri extensions please)
>    - Data structures to define the payment schedule
>    - Do you allow pre-submission of time locked transactions or not?
>
> I think as you prototype these things will become clearer.  You could try
> prototyping either in Bitcoin Core (C++) or bitcoinj (java, look at the
> PaymentSession class).
>
>
>
> On Wed, Jan 29, 2014 at 3:47 AM, Stephane Brossier <stephane@kill-bill.org
> > wrote:
>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>>
>> *From what I have seen so far, there seems to be an agreement that this
>> is a nice feature to add. We are pretty new to that community and so we
>> don't know exactly what the process is, and in particular how we reach
>> consensus via email. I am certainly open to follow 'the way' if there is
>> one, but one solution would be to follow Mike's suggestion on providing a
>> (prototype) implementation first and then defining/refining the BIP. Odinn
>> also suggested a possible retribution for our time through crowd-sourcing
>> which I am interested to pursue if that makes sense. We have quite some
>> experience on the subscription side of things and while we are growing our
>> knowledge on the Bitcoin technology (and ecosystem at large) we would
>> benefit from: * some feedbacks on the high level proposal * additional
>> requirements we might have missed So, below is a high level description of
>> what we have in mind. If this sounds reasonable, we could start working on
>> an implementation. I. Abstract --------------- This describes a protocol to
>> enable recurring payments in bitcoins and can be seen as an extension of
>> BIP-0070. The main goal here is to have the customer subscribe to a service
>> of some kind (that is, agreeing on the terms of that subscription
>> contract), and then have the wallet make recurring payments without any
>> intervention from the customer as long as the payments match what the
>> customer agreed on paying. An example of such service would be an online
>> streaming website, to which a user pays a fixed recurring monthly fee to
>> access videos (a.k.a. resources). Note that there is also usage based
>> billing: for example, the user may need to purchase additional access for
>> premium videos (overage charges). This type of billing is more complicated
>> and there are many variations to it used in the industry (pre-paid, ...). For
>> the sake of discussion, we'll focus on fixed recurring payments only, but
>> we will keep usage in mind to make sure the protocol will be able to
>> support it as well. II. Motivation ------------------ Subscription based
>> services have been growing in the past few years and so the intent it to
>> make it possible for customers to pay in bitcoins. Bitcoin's push model
>> presents new advantages for the customer compared to traditional payment
>> methods: the user has control over the subscription (for example, there is
>> no need to call the merchant to explicitly cancel the credit card
>> payments). It also opens the door to subscription management tools in
>> wallets (e.g. Hive apps), which would give user an overview of what they
>> are paying each month. III. Flow of
>> Operations----------------------------------------*
>>
>>
>>
>>
>> * Creation of the subscription: - - - - - - - - - - - - - - - - - - - - -
>> - 1. The customer clicks 'subscribe' -> A message is sent to the merchant.
>> 2. The merchant sends back a message to the wallet with the details of the
>> subscription such as the amount to be paid. In reality, there will be more
>> information but for the purpose of the prototype implementation this is
>> sufficient. 3. The wallet prompts the customer for authorization. 4. The
>> customer authorizes (or denies) it. 5. The wallet sends the confirmation to
>> the merchant. 6. The merchant confirms the subscription was created.
>> Ongoing payments: *
>>
>> *- - - - - - - - - - - - - - - - *
>>
>>
>>
>>
>>
>>
>> * From that time on and since Bitcoin is a 'push' model, the wallet is
>> responsible to poll the merchant for due payments associated with that
>> subscription. Note that the merchant could specify hints to the wallet on
>> when to poll (specific dates) or not during the registration of the
>> subscription. Note that we can't simply have the wallet push X bitcoins
>> every month: the user account on the merchant side may have gotten credits,
>> invoice adjustments, etc. since the last invoice, so the amount to pay for
>> a given billing period may be lower than the regular amount. It could even
>> be zero if the user decides to make a one-time payment to the merchant
>> directly using a different wallet. Hence, the wallet needs to get the
>> latest invoice balance to make sure how much it should pay. This also opens
>> the door for the support of overage charges. Quick note on the
>> implementation on the merchant side: an entitlement system is a piece of
>> logic on the merchant side which grants the user access to certain
>> resources depending on the account status (unpaid invoices, etc.). This
>> goes often hand in hand with a dunning system, which progressively
>> restricts access as the user's account is more and more overdue. Since
>> wallets can be offline for an extended period of time, payments may be
>> missed and lead to an overdue state (e.g. extra fees, service degraded). It
>> is the responsibility of the customer to ensure the wallet is up often
>> enough for payments to happen. In that recurring phase where the wallet
>> polls the merchant, the wallet is responsible to check that payments match
>> the subscription contract; that is, the amount, frequency of payments, ...
>> match what the customer agreed on. If so, the payment is made without
>> asking for explicit approval from customer, and the flow is similar to
>> BIP-0070: The message is sent to the merchant, and in parallel, a
>> transaction is sent to the btcnet. The merchant sends an ACK to the wallet
>> and of course checks the states of the transactions on the btcnet to mark
>> that payment as successful. Subscription change (optional): *
>>
>> *- - - - - - - - - - - - - - - - - - - - - - - - *
>>
>>
>> * Optionally we could implement a change in the ongoing subscription to
>> address the upgrade/downgrade scenarios. Of course, we could also simply
>> support a cancellation followed by a creation of a new subscription, but
>> having that as a one atomic message is probably better. The steps are very
>> similar to the initial registration. 1. The customer clicks 'upgrade',
>> 'downgrade', ... -> A msg is sent to the merchant. 2. The merchant sends back
>> a msg to the wallet with the detail of the NEW subscription. 3. The wallet
>> prompts the customer for authorization. 4. The customer authorizes (or
>> denies) it. 5. The wallet sends the confirmation to the merchant. 6. The
>> merchant confirms the change in the subscription. Cancellation of the
>> subscription: *
>>
>> *- - - - - - - - - - - - - - - - - - - - - - - - - *
>>
>>
>>
>> * The cancellation is initiated from the customer: 1. The customer clicks
>> 'cancel' -> The wallet is informed that it  should not accept any new
>> payment associated to that subscription. 2. The wallet sends a message to
>> the merchant to inform about the cancellation. 3. The merchant confirms the
>> subscription was cancelled. *
>>
>
>
>
>

--089e0122a26e5ac05404f21e89a1
Content-Type: text/html; charset=ISO-8859-1
Content-Transfer-Encoding: quoted-printable

<div dir=3D"ltr"><div class=3D"gmail_default" style=3D"color:rgb(51,102,102=
)">Figured I would have a crack at reviewing this since Mike is out for a b=
it. It was great running into you guys at the bitcoin fair in SF! Small wor=
ld :)</div>

<div class=3D"gmail_default" style=3D"color:rgb(51,102,102)"><br></div><div=
 class=3D"gmail_default" style=3D"color:rgb(51,102,102)">I like how simple =
this is. You just give it an url to fetch the next payment request and a da=
te to fetch it.</div>

<div class=3D"gmail_default" style=3D"color:rgb(51,102,102)"><br></div><div=
 class=3D"gmail_default" style=3D"color:rgb(51,102,102)">What should happen=
 if the client tries to fetch the PaymentRequest early or late? Does it bec=
ome valid after some date and stay valid for some length of time? Also, wha=
t should happen if the client tries to consume the same PaymentRequest twic=
e (or multiple times) during the same period?</div>

<div class=3D"gmail_default" style=3D"color:rgb(51,102,102)"><br></div><div=
 class=3D"gmail_default" style=3D"color:rgb(51,102,102)">I do not think dai=
ly/weekly/monthly is flexible enough. What do you think about having a conc=
rete start time and end time when the next PaymentRequest will be valid? Th=
is also prevents the wallet from having to remember when it last sent a pay=
ment and getting skewed over time.</div>

<div class=3D"gmail_default" style=3D"color:rgb(51,102,102)"><br></div><div=
 class=3D"gmail_default" style=3D"color:rgb(51,102,102)">When a wallet hits=
 the polling_url to download the next PaymentRequest, it seems we need a wa=
y to communicate an error code to the wallet, for example if the server can=
celed the contract without the wallet knowing. Perhaps a separate polling_s=
tatus_url, with a corresponding ACK message to indicate if the PaymentReque=
st is available. What do you think of that idea?</div>

<div class=3D"gmail_default" style=3D"color:rgb(51,102,102)"><br></div><div=
 class=3D"gmail_default" style=3D"color:rgb(51,102,102)">One high-level com=
ment -- the wallet in this design doesn&#39;t have any way of knowing when =
the payments are supposed to end. I feel this is important to show to the u=
ser before they start their wallet polling infinitely.</div>

<div class=3D"gmail_default" style=3D"color:rgb(51,102,102)"><br></div><div=
 class=3D"gmail_default" style=3D"color:rgb(51,102,102)"><br></div></div><d=
iv class=3D"gmail_extra"><br><br><div class=3D"gmail_quote">On Sat, Feb 8, =
2014 at 6:48 PM, Stephane Brossier <span dir=3D"ltr">&lt;<a href=3D"mailto:=
stephane@kill-bill.org" target=3D"_blank">stephane@kill-bill.org</a>&gt;</s=
pan> wrote:<br>

<blockquote class=3D"gmail_quote" style=3D"margin:0 0 0 .8ex;border-left:1p=
x #ccc solid;padding-left:1ex"><div style=3D"word-wrap:break-word"><div>Mik=
e, Gavin,</div><div><br></div><div><br></div><div>We started to work on the=
 merchant side to test the integration of our prototype for the recurring p=
ayments. We modified the &#39;Payment Request Generator&#39; from Gavin to =
include a new check box &#39;set recurring&#39;. We forked the code and che=
cked in our modification here:&nbsp;<a href=3D"https://github.com/killbill/=
paymentrequest/commit/e530f6ec528266aacfd076d7c3154ad39267c3f3" target=3D"_=
blank">https://github.com/killbill/paymentrequest/commit/e530f6ec528266aacf=
d076d7c3154ad39267c3f3</a></div>

<div><br></div><div>We also found a few issues with the code diff that we s=
ent yesterday for bitcoinj and checked in the bug fixes &nbsp;in our fork--=
 so the diff sent yesterday is slightly outdated.</div><div><br></div><div>
So at this point we have a working prototype for bitcoinj and we are waitin=
g for your feedbacks. We also started to look at integrating the protocol i=
n Kill Bill to check that what is proposed supports indeed the business cas=
es of a full recurring billing platform.</div>

<div><br></div><div>Hope to hear from you guys soon!</div><div><div class=
=3D"h5"><div><br></div><br><div><div>On Feb 7, 2014, at 6:57 PM, Stephane B=
rossier &lt;<a href=3D"mailto:stephane@kill-bill.org" target=3D"_blank">ste=
phane@kill-bill.org</a>&gt; wrote:</div>

<br><blockquote type=3D"cite"><div style=3D"word-wrap:break-word">Mike and =
all,<div><br></div><div>Pierre and I just committed a prototype implementat=
ion of the recurring payment protocol using bitcoinj. You can find the diff=
 on our fork:&nbsp;</div>

<div><a href=3D"https://github.com/killbill/bitcoinj/commit/40c657c4191498f=
12539c60316116aa68af368a7" target=3D"_blank">https://github.com/killbill/bi=
tcoinj/commit/40c657c4191498f12539c60316116aa68af368a7</a></div><div><br></=
div>

<div>We did not write the server (merchant side), but wanted to have some f=
eedback before going deeper (merchant implementation and tests). We did our=
 best to build it on top of the existing BIP-0070 protocol-- only a few add=
itions in the messages, but no new calls and no new uri scheme. We created =
a new package &#39;recurring&#39; where most of the new code lives.</div>

<div><br></div><div>At a high level:</div><div><br></div><div>1. Creation o=
f the subscription:</div><div><br></div><div>The initial handshake for crea=
ting the subscription is exactly similar to the one for the payment protoco=
l (PaymentRequest is used to provide the contract)</div>

<div><br></div><div>2. Wallet can decide to poll the merchants for its acti=
ve subscriptions.</div><div><br></div><div>Here the flow is exactly similar=
 to the payment protocol but the wallet receives a callback to verify the p=
ayment matches the contract and should go through.</div>

<div><br></div><div>Please give us some feedback whenever you have the chan=
ce. In the meantime we will start implementing the merchant side and test t=
he code.</div><div><br></div><div>Cheers!</div><div><br></div><div><br>

</div><div><br><div><div>On Jan 31, 2014, at 10:13 AM, Mike Hearn &lt;<a hr=
ef=3D"mailto:mike@plan99.net" target=3D"_blank">mike@plan99.net</a>&gt; wro=
te:</div><br><blockquote type=3D"cite"><div dir=3D"ltr">That looks OK at a =
very high level. Things you probably want to think about:<div>

<ul><li>How to trigger it off the existing payment protocol (no new top lev=
el messages or mime types or uri extensions please)</li>
<li>Data structures to define the payment schedule</li><li>Do you allow pre=
-submission of time locked transactions or not?</li></ul><div>I think as yo=
u prototype these things will become clearer. &nbsp;You could try prototypi=
ng either in Bitcoin Core (C++) or bitcoinj (java, look at the PaymentSessi=
on class).</div>


</div><div><br></div></div><div class=3D"gmail_extra"><br><br><div class=3D=
"gmail_quote">On Wed, Jan 29, 2014 at 3:47 AM, Stephane Brossier <span dir=
=3D"ltr">&lt;<a href=3D"mailto:stephane@kill-bill.org" target=3D"_blank">st=
ephane@kill-bill.org</a>&gt;</span> wrote:<br>


<blockquote class=3D"gmail_quote" style=3D"margin:0 0 0 .8ex;border-left:1p=
x #ccc solid;padding-left:1ex"><div style=3D"word-wrap:break-word"><b><div =
style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span style=3D"=
font-size:15px;font-family:Arial;font-weight:normal;vertical-align:baseline=
;white-space:pre-wrap">From what I have seen so far, there seems to be an a=
greement that this is a nice feature to add. </span><b><div style=3D"line-h=
eight:1.15;margin-top:0pt;margin-bottom:0pt;display:inline!important">


<span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical=
-align:baseline;white-space:pre-wrap">We are pretty new to that community a=
nd so we don&#39;t know exactly what the process is, and in particular how =
we reach consensus via email. I am certainly open to follow &#39;the way&#3=
9; if there is one, but one solution would be to follow Mike&#39;s suggesti=
on on providing a (prototype) implementation first and then defining/refini=
ng the BIP. Odinn also suggested a possible retribution for our time throug=
h crowd-sourcing which I am interested to pursue if that makes sense.</span=
></div>


</b></div><br><span style=3D"font-size:15px;font-family:Arial;font-weight:n=
ormal;vertical-align:baseline;white-space:pre-wrap"></span><br><span style=
=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical-align:base=
line;white-space:pre-wrap"></span><div style=3D"line-height:1.15;margin-top=
:0pt;margin-bottom:0pt">


<span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical=
-align:baseline;white-space:pre-wrap">We have quite some experience on the =
subscription side of things and while we are growing our knowledge on the B=
itcoin technology (and ecosystem at large) we would benefit from:</span></d=
iv>


<div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span styl=
e=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical-align:bas=
eline;white-space:pre-wrap">* some feedbacks on the high level proposal</sp=
an></div>


<div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span styl=
e=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical-align:bas=
eline;white-space:pre-wrap">* additional requirements we might have missed<=
/span></div>


<br><span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vert=
ical-align:baseline;white-space:pre-wrap"></span><div style=3D"line-height:=
1.15;margin-top:0pt;margin-bottom:0pt"><span style=3D"font-size:15px;font-f=
amily:Arial;font-weight:normal;vertical-align:baseline;white-space:pre-wrap=
">So, below is a high level description of what we have in mind. If this so=
unds reasonable, we could start working on an implementation.</span></div>


<br><span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vert=
ical-align:baseline;white-space:pre-wrap"></span><br><span style=3D"font-si=
ze:15px;font-family:Arial;font-weight:normal;vertical-align:baseline;white-=
space:pre-wrap"></span><p dir=3D"ltr" style=3D"line-height:1.15;margin-top:=
0pt;margin-bottom:0pt">


<span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical=
-align:baseline;white-space:pre-wrap"> </span></p><div style=3D"line-height=
:1.15;margin-top:0pt;margin-bottom:0pt"><span style=3D"font-size:15px;font-=
family:Arial;vertical-align:baseline;white-space:pre-wrap">I. Abstract</spa=
n></div>


<div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span styl=
e=3D"font-size:15px;font-family:Arial;vertical-align:baseline;white-space:p=
re-wrap">---------------</span></div><br><span style=3D"font-size:15px;font=
-family:Arial;vertical-align:baseline;white-space:pre-wrap"></span><div sty=
le=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt">


<span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical=
-align:baseline;white-space:pre-wrap">This describes a protocol to enable r=
ecurring payments in bitcoins and can be seen as an extension of BIP-0070. =
The main goal here is to have the customer subscribe to a service of some k=
ind (that is, agreeing on the terms of that subscription contract), and the=
n have the wallet make recurring payments without any intervention from the=
 customer as long as the payments match what the customer agreed on paying.=
</span></div>


<br><span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vert=
ical-align:baseline;white-space:pre-wrap"></span><div style=3D"line-height:=
1.15;margin-top:0pt;margin-bottom:0pt"><span style=3D"font-size:15px;font-f=
amily:Arial;font-weight:normal;vertical-align:baseline;white-space:pre-wrap=
">An example of such service would be an online streaming website, to which=
 a user pays a fixed recurring monthly fee to access videos (a.k.a. resourc=
es). Note that there is also usage based billing: for example, the user may=
 need to purchase additional access for premium videos (overage charges). T=
his type of billing is more complicated and there are many variations to it=
 used in the industry (pre-paid, &hellip;). For the sake of discussion, we&=
rsquo;ll focus on fixed recurring payments only, but we will keep usage in =
mind to make sure the protocol will be able to support it as well.</span></=
div>


<div><b><br></b></div><br><span style=3D"font-size:15px;font-family:Arial;f=
ont-weight:normal;vertical-align:baseline;white-space:pre-wrap"></span><div=
 style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span style=3D=
"font-size:15px;font-family:Arial;vertical-align:baseline;white-space:pre-w=
rap">II. Motivation</span></div>


<div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span styl=
e=3D"font-size:15px;font-family:Arial;vertical-align:baseline;white-space:p=
re-wrap">------------------</span></div><br><span style=3D"font-size:15px;f=
ont-family:Arial;vertical-align:baseline;white-space:pre-wrap"></span><div =
style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt">


<span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical=
-align:baseline;white-space:pre-wrap">Subscription based services have been=
 growing in the past few years and so the intent it to make it possible for=
 customers to pay in bitcoins. </span></div>


<br><span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vert=
ical-align:baseline;white-space:pre-wrap"></span><div style=3D"line-height:=
1.15;margin-top:0pt;margin-bottom:0pt"><span style=3D"font-size:15px;font-f=
amily:Arial;font-weight:normal;vertical-align:baseline;white-space:pre-wrap=
">Bitcoin&rsquo;s push model presents new advantages for the customer compa=
red to traditional payment methods: the user has control over the subscript=
ion (for example, there is no need to call the merchant to explicitly cance=
l the credit card payments). It also opens the door to subscription managem=
ent tools in wallets (e.g. Hive apps), which would give user an overview of=
 what they are paying each month.</span></div>


<br><span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vert=
ical-align:baseline;white-space:pre-wrap"></span><br><span style=3D"font-si=
ze:15px;font-family:Arial;font-weight:normal;vertical-align:baseline;white-=
space:pre-wrap"></span><div style=3D"line-height:1.15;margin-top:0pt;margin=
-bottom:0pt">


<span style=3D"font-size:15px;font-family:Arial;vertical-align:baseline;whi=
te-space:pre-wrap">III. Flow of Operations</span></div>--------------------=
--------------------</b><div><b><br><span style=3D"font-size:15px;font-fami=
ly:Arial;vertical-align:baseline;white-space:pre-wrap"></span><br>


<span style=3D"font-size:15px;font-family:Arial;vertical-align:baseline;whi=
te-space:pre-wrap"></span><div style=3D"line-height:1.15;margin-top:0pt;mar=
gin-bottom:0pt"><span style=3D"font-size:15px;font-family:Arial;vertical-al=
ign:baseline;white-space:pre-wrap">Creation of the subscription:</span></di=
v>


<div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span styl=
e=3D"font-size:15px;font-family:Arial;vertical-align:baseline;white-space:p=
re-wrap">- - - - - - - - - - - - - - - - - - - - - - </span></div><br><span=
 style=3D"font-size:15px;font-family:Arial;vertical-align:baseline;white-sp=
ace:pre-wrap"></span><div style=3D"line-height:1.15;margin-top:0pt;margin-b=
ottom:0pt">


<span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical=
-align:baseline;white-space:pre-wrap">1. The customer clicks &#39;subscribe=
&#39; -&gt; A message is sent to the merchant.</span></div><div style=3D"li=
ne-height:1.15;margin-top:0pt;margin-bottom:0pt">


<span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical=
-align:baseline;white-space:pre-wrap">2. The merchant sends back a message =
to the wallet with the details of the subscription such as the amount to be=
 paid. In reality, there will be more information but for the purpose of th=
e prototype implementation this is sufficient.</span></div>


<div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span styl=
e=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical-align:bas=
eline;white-space:pre-wrap">3. The wallet prompts the customer for authoriz=
ation.</span></div>


<div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span styl=
e=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical-align:bas=
eline;white-space:pre-wrap">4. The customer authorizes (or denies) it.</spa=
n></div>


<div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span styl=
e=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical-align:bas=
eline;white-space:pre-wrap">5. The wallet sends the confirmation to the mer=
chant.</span></div>


<div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span styl=
e=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical-align:bas=
eline;white-space:pre-wrap">6. The merchant confirms the subscription was c=
reated.</span></div>


<br><span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vert=
ical-align:baseline;white-space:pre-wrap"></span><div style=3D"line-height:=
1.15;margin-top:0pt;margin-bottom:0pt"><span style=3D"font-size:15px;font-f=
amily:Arial;vertical-align:baseline;white-space:pre-wrap">Ongoing payments:=
</span></div>


</b><div><b><div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt=
"><span style=3D"font-size:15px;font-family:Arial;vertical-align:baseline;w=
hite-space:pre-wrap">- - - - - - - - - - - - - - - -</span></div>
<div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span styl=
e=3D"font-size:15px;font-family:Arial;vertical-align:baseline;white-space:p=
re-wrap"><br></span></div></b></div><b><span style=3D"font-size:15px;font-f=
amily:Arial;vertical-align:baseline;white-space:pre-wrap"></span><div style=
=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt">


<span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical=
-align:baseline;white-space:pre-wrap">From that time on and since Bitcoin i=
s a &#39;push&#39; model, the wallet is responsible to poll the merchant fo=
r due payments associated with that subscription. Note that the merchant co=
uld specify hints to the wallet on when to poll (specific dates) or not dur=
ing the registration of the subscription.</span></div>


<br><span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vert=
ical-align:baseline;white-space:pre-wrap"></span><div style=3D"line-height:=
1.15;margin-top:0pt;margin-bottom:0pt"><span style=3D"font-size:15px;font-f=
amily:Arial;font-weight:normal;vertical-align:baseline;white-space:pre-wrap=
">Note that we can&#39;t simply have the wallet push X bitcoins every month=
: the user account on the merchant side may have gotten credits, invoice ad=
justments, etc. since the last invoice, so the amount to pay for a given bi=
lling period may be lower than the regular amount. It could even be zero if=
 the user decides to make a one-time payment to the merchant directly using=
 a different wallet. Hence, the wallet needs to get the latest invoice bala=
nce to make sure how much it should pay. This also opens the door for the s=
upport of overage charges.</span></div>


<br><span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vert=
ical-align:baseline;white-space:pre-wrap"></span><br><span style=3D"font-si=
ze:15px;font-family:Arial;font-weight:normal;vertical-align:baseline;white-=
space:pre-wrap"></span><div style=3D"line-height:1.15;margin-top:0pt;margin=
-bottom:0pt">


<span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical=
-align:baseline;white-space:pre-wrap">Quick note on the implementation on t=
he merchant side: an entitlement system is a piece of logic on the merchant=
 side which grants the user access to certain resources depending on the ac=
count status (unpaid invoices, etc.). This goes often hand in hand with a d=
unning system, which progressively restricts access as the user&#39;s accou=
nt is more and more overdue. Since wallets can be offline for an extended p=
eriod of time, payments may be missed and lead to an overdue state (e.g. ex=
tra fees, service degraded). It is the responsibility of the customer to en=
sure the wallet is up often enough for payments to happen.</span></div>


<br><span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vert=
ical-align:baseline;white-space:pre-wrap"></span><br><span style=3D"font-si=
ze:15px;font-family:Arial;font-weight:normal;vertical-align:baseline;white-=
space:pre-wrap"></span><div style=3D"line-height:1.15;margin-top:0pt;margin=
-bottom:0pt">


<span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical=
-align:baseline;white-space:pre-wrap">In that recurring phase where the wal=
let polls the merchant, the wallet is responsible to check that payments ma=
tch the subscription contract; that is, the amount, frequency of payments, =
&hellip; match what the customer agreed on. If so, the payment is made with=
out asking for explicit approval from customer, and the flow is similar to =
BIP-0070: The message is sent to the merchant, and in parallel, a transacti=
on is sent to the btcnet. The merchant sends an ACK to the wallet and of co=
urse checks the states of the transactions on the btcnet to mark that payme=
nt as successful.</span></div>


<br><span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vert=
ical-align:baseline;white-space:pre-wrap"></span><div style=3D"line-height:=
1.15;margin-top:0pt;margin-bottom:0pt"><span style=3D"font-size:15px;font-f=
amily:Arial;vertical-align:baseline;white-space:pre-wrap">Subscription chan=
ge (optional):</span></div>


</b><b><div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><sp=
an style=3D"font-size:15px;font-family:Arial;vertical-align:baseline;white-=
space:pre-wrap">- - - - - - - - - - - - - - - - - - - - - - - - </span></di=
v>


<div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span styl=
e=3D"font-size:15px;font-family:Arial;vertical-align:baseline;white-space:p=
re-wrap"><br></span></div></b><b><span style=3D"font-size:15px;font-family:=
Arial;vertical-align:baseline;white-space:pre-wrap"></span><div style=3D"li=
ne-height:1.15;margin-top:0pt;margin-bottom:0pt">


<span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical=
-align:baseline;white-space:pre-wrap">Optionally we could implement a chang=
e in the ongoing subscription to address the upgrade/downgrade scenarios. O=
f course, we could also simply support a cancellation followed by a creatio=
n of a new subscription, but having that as a one atomic message is probabl=
y better. The steps are very similar to the initial registration.</span></d=
iv>


<br><span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vert=
ical-align:baseline;white-space:pre-wrap"></span><div style=3D"line-height:=
1.15;margin-top:0pt;margin-bottom:0pt"><span style=3D"font-size:15px;font-f=
amily:Arial;font-weight:normal;vertical-align:baseline;white-space:pre-wrap=
">1. The customer clicks &#39;upgrade&#39;, &#39;downgrade&#39;, &hellip; -=
&gt; A msg is sent to the merchant.</span></div>


<div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span styl=
e=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical-align:bas=
eline;white-space:pre-wrap">2. The merchant sends back a msg to the wallet =
with the detail of the NEW subscription. </span></div>


<div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span styl=
e=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical-align:bas=
eline;white-space:pre-wrap">3. The wallet prompts the customer for authoriz=
ation.</span></div>


<div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span styl=
e=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical-align:bas=
eline;white-space:pre-wrap">4. The customer authorizes (or denies) it.</spa=
n></div>


<div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span styl=
e=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical-align:bas=
eline;white-space:pre-wrap">5. The wallet sends the confirmation to the mer=
chant.</span></div>


<div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span styl=
e=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical-align:bas=
eline;white-space:pre-wrap">6. The merchant confirms the change in the subs=
cription.</span></div>


<br><span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vert=
ical-align:baseline;white-space:pre-wrap"></span><div style=3D"line-height:=
1.15;margin-top:0pt;margin-bottom:0pt"><span style=3D"font-size:15px;font-f=
amily:Arial;vertical-align:baseline;white-space:pre-wrap">Cancellation of t=
he subscription:</span></div>


</b><b><div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><sp=
an style=3D"font-size:15px;font-family:Arial;vertical-align:baseline;white-=
space:pre-wrap">- - - - - - - - - - - - - - - - - - - - - - - - - </span></=
div>


<div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span styl=
e=3D"font-size:15px;font-family:Arial;vertical-align:baseline;white-space:p=
re-wrap"><br></span></div></b><b><span style=3D"font-size:15px;font-family:=
Arial;vertical-align:baseline;white-space:pre-wrap"></span><div style=3D"li=
ne-height:1.15;margin-top:0pt;margin-bottom:0pt">


<span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical=
-align:baseline;white-space:pre-wrap">The cancellation is initiated from th=
e customer:</span></div><br><span style=3D"font-size:15px;font-family:Arial=
;font-weight:normal;vertical-align:baseline;white-space:pre-wrap"></span><d=
iv style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt">


<span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical=
-align:baseline;white-space:pre-wrap">1. The customer clicks &#39;cancel&#3=
9; -&gt; The wallet is informed that it &nbsp;should not accept any new pay=
ment associated to that subscription.</span></div>


<div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span styl=
e=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical-align:bas=
eline;white-space:pre-wrap">2. The wallet sends a message to the merchant t=
o inform about the cancellation.</span></div>


<div style=3D"line-height:1.15;margin-top:0pt;margin-bottom:0pt"><span styl=
e=3D"font-size:15px;font-family:Arial;font-weight:normal;vertical-align:bas=
eline;white-space:pre-wrap">3. The merchant confirms the subscription was c=
ancelled.</span></div>


<br><span style=3D"font-size:15px;font-family:Arial;font-weight:normal;vert=
ical-align:baseline;white-space:pre-wrap"></span><br><span style=3D"font-si=
ze:15px;font-family:Arial;font-weight:normal;vertical-align:baseline;white-=
space:pre-wrap"></span></b></div>


</div></blockquote></div><br></div>
</blockquote></div><br></div></div></blockquote></div><br></div></div></div=
></blockquote></div><br></div>

--089e0122a26e5ac05404f21e89a1--