On the 9th of January 2009, a new evolution of money and payment systems began with the introduction of Bitcoin and the revolutionary Blockchain technology. Bitcoin allowed us to finally send and receive money without the need for a third party (e.g. a bank) and as a result, reduced transaction fees and time period of the transaction significantly.
Fast forward to mid-2018, we have seen the price of Bitcoin reach astronomical highs of over 19,000 USD(from an initial us$0.008) and a world obsession over Blockchain technology. However, through the exponential adoption of Bitcoin and other cryptocurrencies, some underlying problems have developed. Not unsolvable problems, but issues that need immediate attention nonetheless.
The first problem is that a major hack is still one of the greatest worries of people in the cryptocurrency community. The infamous Mt. Gox hack in 2014 and the Coincheck hack earlier this year resulted in the stealing of $473 million and $534.8 million user funds respectively. Due to events like these, many people have become aware of the importance of having a secure storage of their private keys, which in turn has lead to more and more people using hardware wallets such as Trezor and Ledger Nano S.
Modern hardware wallets have provided solutions to reduce the hacking of digital assets by providing a way of storing your private key offline. Meaning your private key is never exposed to the Internet, so it will be unaffected by hacks or viruses.
The second problem is the scalability limitation of Blockchain. Due to the huge amount of traffic, transactions are becoming more and more expensive, as well as taking a much longer time to be confirmed. Due to the capped Block size of the Blockchain (1MB for the Bitcoin Blockchain), there is competition for your transaction to be put on the Blockchain ledger. Hence, causing transaction costs and confirmation time to increase.
Popular payment system Visa is currently able to process around 24,000 transactions per second, and according to 2016 numbers, they process an average of 150 million transactions per day. At the moment, Ethereum can only process 20 transactions per second, while Bitcoin can only process, an even more lackluster, 3–7 transactions per second.
So can one of the cryptocurrencies replace all current payment systems? Let’s use Bitcoin as an example since it is currently the most widely adopted cryptocurrency. According to various sources, the size of each Bitcoin transaction is about 258 bytes, therefore if Bitcoin were to process the same amount of transactions per second as Visa, that would be around 300 terabytes of data per year. So too cut it short, Bitcoin cannot currently reach the scalability potential of Visa, let alone to replace other electronic payment systems altogether.
So what could the solution be? This is where off-chain payment channels come in. Off-chain payment channels, first implemented by Lightning Network (Bitcoin) and Raiden Network (Ethereum) involve using smart contracts to allow two parties to have multiple unconfirmed transactions before closing the channel and then only broadcasting the most recent version onto the Blockchain. So how exactly does it work you ask? If you and I wanted to set up a bitcoin payment channel, we would both deposit a certain amount of Bitcoin that we would like to trade in a 2–2 multisig contract. Once we have deposited these funds, they are not returned to us until the payment channel is closed. Because of the multisig contract we are able to make as many transactions as we want, without ever needing to broadcast it on the Blockchain. Once we are done making transactions, we would close the payment channel, in which case the final allocation of Bitcoin is recorded on the Blockchain, and we can both withdraw our funds. As a result, hundreds of transactions can be made without the need for high transaction fees, and transaction speed increases drastically, allowing Cryptocurrencies to become an extremely scalable payment system.
This is why we started Unikeys. As a company,
we realised something: the number of crypto holders was increasing at an exponential rate, and despite this, it is still extremely challenging to spend cryptocurrency on everyday purchases. The ecosystem simply needs the right tools to trigger a wider acceptance into our societies and at different levels, e.g. individuals, entreprises, financial institutions, central bank etc.
We hope to empower people to seamlessly and safely adopt cryptocurrencies into their lives by bettering the user experience for both the consumer and the merchants. Through storing our users private key offline, we are protecting them from hackers and therefore, providing our users with a secured value storage. Furthermore, due to the biometric feature embedded in the UKey card, the user is required to biometrically authenticate every transaction. So even if the user’s card is stolen, no one will be able to retrieve the private key and make transactions on the user’s behalf. Hence, creating a new sense of security crypto holders never had before. Additionally, Through the implementation of payment channels, instant transactions are enabled, increasing the logistical convenience for both consumers and merchants. Unikeys also puts great importance on offering financial advantages to merchants who accept cryptocurrencies. Credit card users are required to pay between 2% to 3% on every transaction. By using the Unikeys processor, merchants receive bank deposits in their own currency for only a 0.5% to 0.75% transaction fee.
We are the first company providing a comprehensive suite of solutions to the masses, which will allow cryptocurrencies and tokens to become a universally adopted payment system.
Check out our website and the Unikeys whitepaper at:
https://www.unikeys.io/wp-content/uploads/2018/06/White-Paper-V1.1.pdf.
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▪️Official Site: https://www.unikeys.io
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▪️LinkedIn: https://www.linkedin.com/company/Unikeys/
▪️Medium: https://medium.com/@Unikeys
▪️Telegram: https://t.me/joinchat/FhdCtRJPbCX40kQ6YwEIBw
