The introduction and uprising of cryptocurrencies was driven by one key goal. The new, curious technology was quite literally taking on the world, aiming to completely disrupt money as we know it.
More than ten years on, the dream is still alive. Sure, cryptocurrency has branched out and become much more than just a global payment option. But at the core, cryptocurrency and distributed ledger technology is still tailor made to create a better, more efficient and fairer payment landscape.
Bitcoin was the leader of the original charge. Since then many have tried to stand on the shoulders of giants, so to speak. New concepts with protocol changes aiming, or sometimes even praying, to become a global payment method. These changes are made to correct the issues which are thought to have prevented the large scale adoption of cryptocurrency thus far.
COTI has taken a leap beyond the payment currencies we’ve seen before. They acknowledge that other blockchain based currencies have successfully created networks with low transaction fees and high transaction throughput.
But they also recognise that these aren’t the only factors that have prevented adoption. That’s why COTI has been created – to create a trust based online currency that consumers want to use and merchants are happy to accept that facilitates safe, trust-filled transactions.
Introducing COTI – Currency Of The Internet
COTI is a highly scalable cryptocurrency that leverages Directed Acyclic Graph (DAG), not blockchain. This is because the team believes that DAG is more suitable than blockchain for payments as it is highly scalable with low transaction costs.
COTI operates on a proprietary consensus algorithm known as the Trustchain. The Trustchain lies on a multi-DAG data structure which works in tandem to drive up scalability. COTI claims to be capable of processing more than 100,000 transactions per second, which is more than four times larger than some traditional payment systems.
Scalability isn’t a point to brag about – it’s merely a requirement. All the game-changing elements that support the currency are what really makes COTI stand out.
Tackling trust with Trustchain
Trust is a huge issue in any payment process, online or offline. When there is a lack of trust between unknown parties, there is risk. Chargebacks, transaction cancellations, scams or anything else could happen when trust is lacking.
With traditional payment systems, any individual or merchant can be classified based on their risk level. This can be very useful, but it’s not always fair. Most often classification is based on an association with a particular industry rather than on behaviour, which is prejudice.
With cryptocurrencies, payments are trustless and almost always final. When you’ve sent your money, it’s gone for good. The lack of trust is frightening and it has enabled malicious users to exploit others for personal gain all too frequently.
COTI solves the issue of lack of trust with the Trustchain algorithms which takes into account a combination of a user’s historical behaviour data and objective information about the user to calculate a trust score using a unique machine-learning algorithm.
Users are incentivized to earn a higher trust score because trust is used to validate and confirm transactions faster in the Trustchain consensus mechanism.
Initially a trust score is attributed to a user based on a questionnaire and document verification during the sign up process. From there, network usage drives a users trust score based on how the user interacts with the network, which is assessed by the advanced machine-learning Trustchain algorithms.
There are many different factors that can change a trust score. Scores change based on a combination of bonuses and penalties, which could be anything improving a score by completing a successful transaction to receiving a penalty for irregular behaviour.
User activities are weighted based on time, with more relevancy provided to the most recent events. Activities are also weighted based on their severity, with more severe activities affecting a trust score for longer than less severe activities. You can learn all about how a trust score is calculated here.
Unlike other cryptocurrencies, COTI has a dispute resolution system built in that leverages game theory to ensure a fair outcome. It’s called the Arbitration Service.
Any user can appeal through the Arbitration Service. When an appeal is raised the decentralized dispute system will use game-theoretical economic incentives to prompt a jury to reach the correct decision and resolve the appeal.
One of the biggest pain points of payment cryptocurrency adoption is the lack associated payment tools and merchant integration support. No currency is going to succeed based on speed and scalability alone. If it’s hard for businesses to use, they won’t bother.
That’s why COTI has built a range of user and merchant facing tools that are purpose built to be very easy to use, which could significantly increase the adoption of COTI.
COTI has the benefits of a highly scalable, cheap and fast decentralized cryptocurrency but contains a number of other components that differentiate COTI from other payment focused cryptocurrencies.
COTI is a payment ecosystem with advanced trust-based mechanics that incentivize users to act in a legitimate, trustworthy manner. Furthermore, any user is able to raise disputes which will be resolved by a completely decentralized Arbitration Service.
Quite frankly – COTI is such a deep project packed full of features that we have barely brushed the surface here in terms of detail. We will dig further into the power of COTI in future articles.
By Alex Aves
*Disclaimer – COTI are our Media Partners and therefore this content is sponsored by them. The fees paid by this project are used to pay for The Daily Chain salaries, dev work, hosting services, travel expenses etc.. that are required to make this company a success and continue to provide the community with great content on a daily basis.