An electric company decides they want to use combine Bitcoin as a payment system with smart meter technology to enable real time billing.
To their existing smart meter they add lightweight Bitcoin node and wallet capability. The meter does not store a full copy of the blockchain but instead relies on
UBC-aware nodes to get accurate balance information. Transaction signing is handled on the meter side by a dedicated chip that refuses to sign any transaction with outputs addresses other than its own change addresses or to an address derived from the extended public key stored in a SIM-like card provided by the electric company to each subscriber. That same card also contains a 256 bit random shared secret to encrypt communications between the meter and the electric company. Both the meter and the electric company are using
hierarchical deterministic wallets. The meter uses BIP32 to calculate change and deposit addresses and the electric company uses the same protocol to create a different extended public key for each customer account.
Customers are reminded to add funds to their meter on a periodic basis, and the actual billing is handled on a per watt-hour basis using
rapidly adjusted micropayments. Even with a very short billing interval transactions only need to hit the blockchain between once per week and once per month. The electric company likes this because they never need to deliver electricity without being assured of payment, and the customers like this because it avoids the downside traditionally associated with prepaid services - their ability to get a full refund for the unused portion of a prepayment is guaranteed by the blockchain and the Bitcoin protocol instead of the whims of the service provider.
