With streaming payments, the buyer device continuously sends small payments to the seller in exchange for small units of service, such as energy (e.g. charging an electric vehicle) or rent.
This way of payment significantly reduces the risks of payments between two parties who don't trust each other since the maximum amout they risk is the small unit of payment or service they exchange in each step.
The two parties (endpoints) of a payment channel can be:
Payment channels are based on Autonomous Agents that temporarily lock user funds while the channel is open. All micro payments happen off-chain, and they are therefore free, instant, and private. These micropayments gradually move the locked balance within the channel from buyer to seller. When the provision of service is finished, the parties close the channel and the aggregated payment is settled in a single on-chain transaction.
BIoT Wallet is a PoC wallet that supports payment channels for applications where a user is one of the endpoints.