Vitepay- Elegant design + Swift payments + Stablecoin Support; Merchant Adoption is the Remaining Ingredient!


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    When we think of public blockchains and cryptocurrencies, the first and foremost application that usually strikes us is their enormous benefits as payment systems. In the eyes of critics & fans of cryptocurrencies alike, the prima facie validation of success of blockchain systems would be adoption of cryptocurrencies as a means of transaction in day-to-day activities (like payments for online merchandise, groceries, games, coffee shops, restaurants, physical book stores, in-app purchases, ecommerce etc). Ironically, since the advent of Bitcoin in 2008, we haven't seen even renowned blockchain platforms scratching the surface of payments. We have the Satoshi's dreamchild, Bitcoin that is unhackable, immutable record of value but it is still limited to trading on exchanges; we have the incredible vision of Vitalik Buterin in the form of Ethereum smart contracts but the platform is too slow to scale; we even have payment networks like Ripple that are currently being used by banks but still far away from gaining adoption among masses. None of these solutions have really got mainstream adoption for payments in day-to-day activities or transactions for businesses. As if technology impediments were not enough, the regulatory regime have not been supportive for these nascent cryptocurrencies either.

    To be more specific:

    • While one set of blockchain networks like Bitcoin and Ethereum are decentralized and secure, they are not ripe for mainstream adoption yet due to scalability and speed issues.

    • Ripple has its own issues in that it is a permissioned and private blockchain network that might be suitable for a closed ecosystem of organizations, but probably not trustless enough to be used for public payments among masses (atleast not in its current state), and (b) most banks are utilizing just the ledger part of Ripple and not really the underlying XRP token for payments which questions the real utility of its token. Further, it seems unlikely that banks would want to hold currencies as assets on their balance sheets to conduct business transactions, given the volatile nature of cryptocurrencies.

    • Stellar is a permissionless network and its Federated BFT consensus is frequently described as more evolved than Ripple's but its native token XLM faces challenges similar to Ripple's XRP.

    • Some contend that "stablecoins" issued on blockchains networks (although centralized) may have a better chance of acceptance as holding assets by banks and masses as they mitigate the problem of volatility associated with cryptocurrencies.

    You can see the community divided here in several factions here. To classify broadly, individuals subscribing to:

    (a) Hardcore principles of decentralization sticking to Bitcoin & Ethereum as payment currencies,

    (b) A somewhat looser form of decentralization for faster payments and hence, inclining to payment solutions similar to Nano, Ripple and Stellar, believing that the volatility in cryptocurrencies will eventually fade

    (c) "Stablecoins" as the future medium of payments

    Regardless of which of the three categories mentioned above turn out to be successful in future, most of us would agree on the following:

    • The underlying network based on distributed ledger technology makes payment transaction settlements significantly faster and cost efficient compared to existing banking solutions

    • Relative to providing a solution enforcing a stablecoin like USDT (Tether), JPM coin (JPM coin is a dollar based stable coin issued by JP Morgan), or a cryptocurrency alone, providing the user with multiple choices/options that includes both cryptocurrencies and stablecoins on the same blockchain network for a given transaction would be more appropriate.

    Now that the backdrop is set, I would now share why I find design of Vitepay appealing.

    • Vite provides a medium of instantaneous and feeless payments using its innovative DAG structure with a snapshot chain securing the network. Thus it provides the convenience of a centralized payment system without compromising the security of the network.

    • The platform provides optionality for buyers & merchants to accept/use both cryptocurrency or stablecoins (see Vite-USDO partnership description below).

    • Another great point about Vitepay that distinguishes Vite is that even if the entire ecosystem of Vite payments is run using the stablecoin USDO, the role of VITE token is not compromised. How? Well, while small merchants and users can use the Vite payment system with a small POW at no cost, larger businesses will still need to hold VITE tokens for their higher throughput requirements. They can either buy VITE tokens directly from Vite DEX/exchanges or simply borrow them from the network stakers in lieu of some interest. In my opinion, atleast the model on which Vitepay is being designed appears perfectly aligned for user convenience and security without distorting the advantages of token utility (unlike the case in XRP or XLM where the use of underlying blockchain network alone may not bring any significant benefits to tokenholders).

    • Features like in-built DEX and support for smart contracts should bring more adoption to Vitepay.

    What is Vitepay?
    Vite Pay is a technology running on Vite network, responsible for the payment function of product purchase work. Vite plans to enable Vitepay connecting over 100 merchants in Japan, Southeast Asia, North America and other countries over the Vite network very soon. The team tested its Vitepay to test purchases at the popular Don Quijote Chain in Tokyo using Vite tokens through an app in Sep 2018. Vitepay is currently deployed at the Vite Store where it is used for purchases of Vite swags such as t-shirts and hats as well as credit for paying mobile phone bills and virtual points cards (for in-game purchases). The store currently accepts VCP tokens (Vite Community Points, issued on Vite’s network), which fans can obtain through Vite Labs’ community rewards campaigns.

    At the time of payment, the website directs the user to Vite Pay who can complete the payment. The payment is also available in Vite Pay Store.
    At the time of payment, the Vite Pay screen displays the amount of the order and the currency information. The payment can be made by scanning QR code or entering the transfer address. The payment speed is fast, at the order of seconds. After the payment is complete, the order amount will be settled to the merchant fund account.

    Vite_Pay.JPG

    A brief overview of Vite USDO partnership
    VITE announced a strategic partnership with stable currency USDO in February 2019. USDO is a stable currency with 1:1 anchoring USD supported by commercial Banks of many countries. It has full financial license and can be purchased and redeemed within one working day. USDO will provide VITE users with a stable and reliable channel between Vite enabled cryptocurrencies and USD. USDO will also access the merchant resources of VITE partner, and continuously expand the payment ecology of USDO for users.

    Conclusion
    While it can be convenient for a critic to assume that blockchains systems have failed to deliver, the technology is in a very nascent stage to draw conclusions about future of blockchain technology. This would be equivalent to drawing conclusions on future of internet by observing slow and cumbersome 40 KB internet connections in early 90s that hardly had any adoption back then. While it is too early to claim that Vitepay will emerge as one of the winners in the space, the design appears to be well thought-out. More specifically, I would like to see more adoption for Vite payment solutions among merchants and businesses. Post the integration of Vitepay with USDO, we can expect Vitepay to gain acceptance among merchants that seem to be the priority target for Vite currently. Hopefully, we will get to hear more updates relative to adoption of Vitepay this year.

    #insightvite #Vitepay


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