By Shahaf Bar-Geffen, CEO of COTI
COTI, the company behind the world’s first blockchain protocol optimized for payments and stable coins, has launched its Trustchain protocol, AlphaNet.
The protocol is an end-to-end solution for enterprises, merchants, payments apps’ developers and stable coin issuers – addressing the classic problems of blockchain, scalability and transaction costs.
It also introduces new features for payments and stable coins, such as stability framework and charged back transactions.
COTI’s Trustchain includes proprietary technologies that enable developers and enterprises to build independent global scalable payments networks, based on DAG (Directed Acyclic Graph), and issue price-stable coins.
COTI solves the major problems that are holding back the scalability of current cryptocurrencies and stable coins: speed, cost, energy consumption and trust. COTI’s solution is the world’s first protocol that is optimized for payments and stable coins, industries that are estimated in the trillions USD.
As a result, networks built on the Trustchain will be able to process tens of thousands transactions-per-second (TPS) in comparison to current blockchain solutions that process only a few transactions per seconds and with high cost per transaction.
COTI has already signed up 80,000 users and 5,000 merchants to use its technology worldwide as well as various enterprises, developers of payment networks, point of service devices among others.
Speed and cost
Cryptocurrencies, such as bitcoin, are based on blockchains that require each transaction to be confirmed by miners through solving difficult maths problems. This means that transactions incur costly ‘miner’s fee’ and could take hours to process. Not to mention the energy consumed to run computational power for intense coding. As a result, Bitcoin is only able to process just above 2 transactions-per-second (TPS). This also creates a dangerous and unfair situation in which mining farms solve most bitcoin blocks.
COTI has architected a new blockchain based on DAG (Directed Acyclic Graph) data structure, called the Trustchain. DAG is block-less blockchains where there are no miners or blocks.
Each new transaction is validating two previous transactions to be added to the ledger. In COTI’s Trustchain, there are no miners or blocks, allowing for virtually real-time and low-cost crediting of funds to the other party’s wallet. Therefore, unlike Bitcoin, COTI is able to process tens of thousands TPS.
Not only that, but most currencies based on blocked-blockchains are massively inefficient due to their energy consumption. Removing miners on the Trustchain will dispel the use of computing power and remove the abundance of energy consumption, emphasising the importance of environmental responsibility for crypto platforms.
On COTI’s Trustchain protocol, each participant is granted with a trust score to predict his trustworthiness behaviour on the network. Users who consistently receive minimal or no complaints for their activity receive higher positive scores. As a reward, they face lower fees for using the Trustchain. Those with spotless records will be charged zero fees by the system. With such an incentive system in place, users are encouraged to continuously conduct trustful and trustworthy transactions.
Furthermore, current blockchain-based payments can be untrustworthy due to the fact that they are irreversible. For instance, there is no buyer-seller protection in place that will guarantee a seller will deliver on their promise once payment has been transferred.
However, even with features like the Trustchain, disputes can happen. COTI replaces fiat’s lengthy and blockchain’s non-existent dispute resolution processes with a transparent and decentralised process. Disputes are resolved through a real jury of peers made up of COTI users, who are rewarded in COTI coins. COTI’s approach to mediation involves harnessing an independent network of crowdsourced mediators to resolve disputes fairly and efficiently.
ShahafBar-Geffen, CEO of COTI, said:
“Development of payment applications and stable coins is limited today due to the use of unsuitable blockchain. We are launching the world’s first protocol that is actually optimized for payments and stable coins, with a belief that developers and enterprises will build groundbreaking applications on our platform. Early traction proves that we have built a platform that is in real need,
“For cryptocurrencies to reach their true potential, they must become a cheaper, quicker and easier means of payment than they are currently. Unfortunately, any blockchains that rely on confirmations from miners will never be truly scalable. We need a system such as COTI that reevaluates the structure of blockchains.
“At COTI, we’ve not only built a digital currency, but an entire digital ecosystem based on an improved protocol.
“COTI is doing for payment apps and stable coins what Etherium did for dApps. This will set the standard for next-generation payment solutions and stable coins that is safe, easy to use, instant and cost-effective.”
COTI’s 30+ people team is built from highly experienced individuals, who previously held positions at IBM (former head of research), Ripple (former CRO), Blackrock (former CIO), Investec bank (former CEO), as well as cryptographers from Israeli elite army intelligence units.
Most of today’s blockchain platforms are optimized for dApps and not for payments. They also don’t provide the infrastructure and the tools required for everyday transactional use. This in addition to possessing numerous challenges related to identity, trust, stability, scalability and high transaction costs, which deter the adoption of cryptocurrencies for mainstream use.
COTI utilizes a DAG (directed acyclic graph) ledger to address these shortcomings, providing extreme scalability to process tens of thousands of transactions per second, as well as price stability mechanisms and low costs.