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Today, Graft, a global, open-sourced, blockchain-based, decentralized payment gateway and processing platform, announced that it would launch an Initial Coin Offering, or ICO, program to raise funds for the growth of its groundbreaking blockchain-based payments business. The ICO is scheduled to begin on January 18, 2018.
Graft aims to bring a lasting solution to most of the problems that existing cryptocurrencies face at the point of sale, including long wait times and high transaction costs.The demand for cryptocurrencies has grown dramatically in recent years. This is apparent in the tremendous increase in the prices of cryptocurrencies like bitcoin, ethereum, and litecoin, considering that their prices are mainly demand-driven.
But have you ever wondered why you can’t pay for your dinner at any restaurant with cryptocurrency, especially after the increase in value they have enjoyed? The problem is, most existing cryptocurrencies are not designed specifically for point-of-sale.
The Long Confirmation Time for Crypto Transactions Discourages Consumers
In the cryptocurrency world, confirmation incorporates the stages of authorization, authentication, clearing, and settlement; the same stages that are involved in credit card payments. When you add up the time these stages take in a traditional credit card payment, you’re very likely to find that cryptocurrencies, say bitcoin, are faster. Bitcoin confirmation would usually happen in anywhere from 10 minutes to a few hours, while the entire process for a credit card usually takes a couple of days.The shorter time for bitcoin is good for the merchant because they can access their funds faster, but it’s time wasted for consumers because most of the time, they have to wait out the entire confirmation period before the purchase is complete. Credit card payments do not require this type of time commitment from customers.
Using Cryptocurrency Is Expensive For Consumers
Here’s a line from Satoshi Nakamoto’s famous paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System” that announced the launch of bitcoin: “The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions, and there is a broader cost in the loss of ability to make non-reversible payments for nonreversible services.” The high costs that are associated with the conventional payment systems are one of the things that bitcoin was supposed to tackle. The opposite is what is happening when it comes to using bitcoin as a regular currency. A journalist with the U.S. business news provider CNBC experimented with the use of bitcoin as a regular currency earlier this year. The journalist noted that “bitcoin transactions can get expensive,” saying that bitcoin transactions cost her 40 percent more than dollar or credit card transactions on average. She called out high exchange rates and transaction fees. Moreover, the fact that consumers pay the transaction fees as opposed to merchants in credit card payments discourages the mass adoption of bitcoin.
Graft is looking to solve the problems of transaction costs and settlement times with a merchant-centric, agile blockchain. One thing that Graft has done that is not common amongst blockchains is that our transaction fees, like credit card payments, are proportional to the transaction size, as opposed to the network state and record size that dictate transaction fees for existing cryptocurrencies. Graft also encourages micropayments by making them incredibly cheap, as opposed to the Bitcoin network. Transaction fees for smaller payments range between 1-2 cents.
Unlike most of the solutions in the space, GRAFT offers a payment network that is compatible with major existing payment technologies. This allows merchants to accept both fiat and cryptocurrency payments, enjoy instant settlement, and have seamless access to their funds in their preferred currency. This ease of use for both consumers and merchants will go a long way toward ensuring that cryptocurrencies deliver on their promise of being a more efficient medium of exchange.
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