What are the real-life applications of Cryptocurrencies? How will these affect my everyday life? These are some of the questions I have received on social media and gatherings over the past few weeks. In order to answer these questions, I will be creating a series where I will be discussing how certain projects aim to disrupt and revolutionize specific industries.
Payment Systems— Request Network (REQ)
The current financial payment system has a number of drawbacks. However, modern life has evolved in such a way that it’s impossible to not use them daily. Some of the most important issues with the current system include:
- Security of personal information — In order to use the current payment systems (PayPal, Western Union, etc.) we need to provide our personal information (name, address, credit card details, etc.). Over the years, a number of these financial institutions have suffered data breaches compromising personal information.
- Fees — Due to the centralized nature of our current financial payment system, companies can afford to get away with high fees. For example, PayPal charges the “seller” 2.9% plus $0.30 per sale (in the US) and Visa charges an “interchange fee” of anywhere between 1.43% and 2.4%. Both buyers and sellers are impacted by this, as products need to be priced higher to cover these fees.
- Selling of information — Tying into my previous point about personal information, these centralized financial institutions are well within their rights (as per their terms & conditions) to sell your habits and data.
Request is a decentralized network that allows anyone to request a payment (a Request Invoice) for which the recipient can pay in a secure way. All of the information is stored in a decentralized authentic ledger. This results in cheaper, easier, and more secure payments, and it allows for a wide range of automation possibilities.
REQ aims to solve the issues found in our current financial payment systems in the following ways:
- Secure — Request doesn’t require you to share your banking information, therefore there is no risk of a malicious party intercepting and re-using this data. Taking an extract from REQ’s whitepaper:
For example, shopping on Amazon requires payment by credit/debit card, thereby exposing sensitive information. Alternatively, selecting the option to pay via Request, the users data remain protected. Amazon will post a Request on the network, the user’s account will detect it and request a confirmation of payment from the user. This will trigger a transfer at the lowest cost, without exposing the payment information.
- Cheap — Since there are no third-parties involved, costs are greatly reduced. The costs expected on the platform will be between 0.05% and 0.5% of the transaction. As volume of the network increases, in order for REQ to remain competitive, the cost will decrease.
- Flexible — It will allow payments in Ethereum, Bitcoin, ERC20 tokens and FIAT currencies.
- Simple— The payment flow is more secure and more user-friendly. One click to pay, and no manual input error possible.
How are the REQ Tokens used?
In order to make a transaction on the Request Network, the gateway will have to pay a fee (in the form of REQ tokens) which will be burned (or destroyed) in the process. This will confirm the success of the transaction. These fees will be adjusted over time depending on supply, exchange rate of supported currencies, etc. One thing to note, however, is that you don’t necessarily need to have REQ tokens; the necessary amount will be purchased (and burned) as part of the transaction.
As an example, a request at the beginning of the system might burned 10 REQ out of the total supply of 1 000 000 000 REQ. Later, after the system has been used for a while, a Request might burn 0.0001REQ out of a total supply of 100 000 REQ.
REQ doesn’t only focus on payment systems. It is building a payment platform were others can build applications in tandem with it. Additionally, it goes even further trying to improve other industries, including, invoicing, audit & accounting, internet of things, and more. I will be discussing these in future blog posts.
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