COTI

ayamj (28)in #fintech • 6 years ago

Online merchants and consumers alike expect online buying and selling to be easy, efficient, and safe. Ecommerce transactions trigger complex automated processes that involve downstream players: banks and payment processors to name just two. In addition, technological advances in smartphones and e-wallets, shifting purchase patterns, and demand for cross-border, multi-currency electronic payments have fueled PSP competition to maintain and increase market share.
New technologies have already simplified and smoothed business-to-business and business-to-customer experiences with mobile payments, e-wallets, and contactless cards. As the online payment processing market grows, user demands for additional payment features and options lead growth in multiple directions.
Blockchain technologies and cryptocurrencies have proven to be successful mechanisms for managing payment transactions over the last several years. Currencies such as Bitcoin, Ethereum and many others have enjoyed exponential growth in popular interest and adoption1 , while blockchain technology has been been utilised in many applications, ranging from supply chain management
[11] to decentralised health records management
[17]. Indeed, many have likened cryptocurrencies to the early internet, citing its enormous potential to disrupt payment systems in the same way the internet disrupted information accessibility
[14]. However, while first generation cryptocurrencies have been enormously successful, they have faced fundamental challenges that have prevented them from achieving universal adoption. Linear blockchainbased cryptocurrencies are impaired by low transaction throughput2 ; cryptocurrencies that rely on a net.
Below is a list of the 5 main challenges in online payments

Fraud and chargebacks
Online transactions are “card-not-present” transactions. As e-commerce expands, opportunities for fraudulent misuse of payment networks and data theft grow right alongside. In addition to more obvious fraud-monitoring tools such as the customer account, validation services, and purchase tracking, a certified Level 1 PCI DSS payment processor’s risk management staff can sniff out fraud before it occurs.
Cross-border transactions
Cross-border payments can be slow, inefficient, and expensive, but they play an important role in global trade. Typically, national banking infrastructures can’t handle cross-border payments, resulting in independent and non-uniform development in technologies and software platforms that complicate or stall cross-border transactions. New developments are beginning to shape cross-border payment requirements:
• Emerging transnational systems will decrease reliance on correspondent networks
• Government-led initiatives and mandates will begin to regulate payments and fees
• Payment systems will manage credit risk, liquidity, and costs more effectively
• Multinationals will achieve economies of scale, with a side benefit of consolidating credit risk
• Outsourcing will increase processing efficiency and drive down costs
Card data security
Payment Card Industry Data Security Standards (PCI DSS) certification is required for every merchant or business accepting credit or debit cards, online or off. PCI DSS standards require merchants and processors to meet 12 criteria across six security arenas:
• Build and maintain a secure network and systems
• Protect cardholder data
• Maintain a vulnerability management program
• Implement strong access control measures
• Regularly monitor and test networks
• Maintain an information security policy
Multi-currency and payment methods
Global ecommerce means accepting a variety of payment methods and currencies. Electronic payments such as e-wallets, mobile payments, and credit/debit cards help online merchants compete in international markets by allowing their customers to pay in their native currencies. merchant account in its home currency.
Technical integration
Online payment systems run the proprietary gamut across hardware and software platforms. Credit card-affiliated payment processors, while more secure, can be expensive for online retailers. Added to the expense is the lack of interface between processing systems—it may be difficult or impossible for a PSP to link with other systems, resulting in processing and payment delays, lost transactions, and expensive fees.
COTI is a FinTech company that has developed a base protocol, known as the Trustchain™, which aims to address technical challenges plaguing other existing cryptocurrencies and limiting their mass adoption as means of payment. It includes consumer wallets, merchant processing tools and a digital currency exchange facility. The consumer-merchants payments industry is estimated to be a two trillion USD market however, it has been monopolised by Visa and MasterCard for the past 40 years. Nowadays, each transaction goes through 6-8 middlemen, each collecting a fee and potentially being a point of failure. COTI aims to address such shortcomings by combining the best of traditional payment methods with the best of traditional currencies. COTI network users can expect low-to-zero fees, full buyer-seller protections, a robust Trust Scoring Engine and decentralised Mediation System. COTI's team includes top management and R&D talent, veterans of the financial industry and blockchain experts. Our team includes Steven Heilbron (former CEO of Investec Bank UK), Dr. Matthew McBrady (former CIO of Blackrock), the founders of Processing.com and early investors in Twitter, Square, Coinbase, Ripple.
COTI (Currency Of The Internet)
solves these challenges by using an innovative base layer protocol in the form of a directed acyclic graph-based ledger built from transactions connected through time by harnessing trust-based algorithms. Trust should be based on a combination of historical behavioural data and objective information relating to buyers and merchants. COTI takes this into consideration, calculating trust scores using a unique machine-learning algorithm. Trust is used in the Trust Chain Algorithm to validate and confirm transactions faster. Trust Chains grow as new transactions attach to two prior transactions that have similar degrees of trust. This results in an innovative consensus-based confirmation mechanism, in which every user is incentivised to have a high level of trust while engaging in trust-building behaviour due to the benefits associated with having a high level of trust (i.e. faster confirmation times). COTI has built mechanisms to monitor, detect and defend against possible attacks, ensuring network security. An example of such a mechanism is COTI’s Double Spend Prevention (DSP) Nodes. COTI also introduces novel protocols to address disputes that may arise when sending transactions, a much required feature which is not possible with other cryptocurrencies. Dispute resolution is achieved through the use of a Mediation Service. This service takes advantage of the principles of game theory to ensure a fair outcome in the case of a dispute and votes to determine which of the two disputing parties is right. Keywords: Blockchain, COTI, Cryptocurrency, DAG, Distributed ledger, E-commerce