Tag Archives: Payment

Litecoin: The Everyday Cryptocurrency

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In our last piece, the Mystic Media Blog covered the up and coming cryptocurrency Ripple. This week, we’ll examine another major cryptocurrency player: Litecoin.

Litecoin is a swifter, more nimble adaptation of Bitcoin utilizing the Bitcoin Core protocol. As Litecoin founder Charlie Lee puts it: Litecoin is designed to be the silver to Bitcoin’s gold.

Charles Lee graphically denotes the relationship between Bitcoin and Litecoin on his Twitter profile using an image of Vegeta from Dragon Ball Z wearing the Litecoin insignia and Goku who wears Bitcoin’s insignia.
Charlie Lee graphically denotes the relationship between Bitcoin and Litecoin on his Twitter profile using an image of Vegeta wearing the Litecoin insignia, and Goku wearing Bitcoin’s insignia.

Litecoin was created in October 2011 by Charlie Lee, a former Google engineer. When creating Litecoin, Charlie Lee aimed to mimic the Bitcoin protocol while decreasing the block generation time and the maximum number of coins. In doing so, he reduced transaction times and fees. Litecoin processes transactions in only 2.5 minutes while Bitcoin takes about 10 minutes. Additionally, Litecoins are capped at 84 million, quadruple the cap of coins for Bitcoin. As of February 2018, the transaction fee for Litecoin averaged $0.30 while Bitcoin averaged $8.50.

The quicker transaction times, smaller fees, and larger number of coins make Litecoin a faster, more nimble cryptocurrency with more practical usages than Bitcoin. Charlie Lee has stated that his goal was to compliment, rather than compete with Bitcoin.

“The vision has always been that I wanted Litecoin to complement Bitcoin—not compete. Bitcoin can be used for  moving millions of dollars between banks, buying houses, buying cars. It’s really secure… Litecoin can be used for cheaper things.” – Charlie Lee

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Since Litecoin is modeled off of Bitcoin Core, it will benefit from improvements to the Bitcoin system while serving a complimentary purpose. While Litecoin is not a direct Bitcoin competitor, it does have competitors within the cryptocurrency sphere. Bitcoin Cash essentially offers the same proposition: A cryptocurrency based off of the Bitcoin system, but designed to be mobile for purchasing goods rather than simply functioning as a store of value. Charlie Lee himself has acknowledged the competition between Bitcoin Cash and Litecoin.

Many would say the main advantage that Bitcoin Cash has over Litecoin is not in its technology, but in its marketing. Bitcoin Cash has the Bitcoin name and its founder Roger Ver is the CEO of bitcoin.com, making him one of the most influential personalities in the cryptocurrency sphere.

If Litecoin can beat out Bitcoin Cash to become the ultimate compliment to Bitcoin, then it will be a cryptocurrency to watch. Litecoin has a tradition of adopting advanced technology like Segregation Witness and Lightning Networks early, which will certainly be to its advantage as it vies for consumer usage in the coming years. Whether or not it will beat out Bitcoin Cash in the long run remains to be seen, but there is no question Litecoin will be one of the top cryptocurrencies to watch.

Everything You Need to Know About XRP and the Ripple Payment Network

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While many cryptocurrencies aim to decentralize the banking system, one currency stands alone in their attempts to collaborate with banks: Ripple.

In our past two articles, we’ve spotlighted the top 10 cryptocurrencies to look out for in 2018 and the top trends to know about to invest wisely in cryptocurrency in 2018. Both articles had one common topic: Ripple.

While Bitcoin was created to decentralize the financial industry, Ripple is the only digital asset actively working with banks to improve rather than undermine their operations. Ripple boasts the ability to process on average over 1,500 transactions per second, making it the fastest cryptocurrency on the market. Ripple has teamed up with Western Union, Santander, American Express, and more to test the fastest cross-border transaction network available.

The process of making cross-border payments is unnecessarily tedious. In the internet era, the only reason why a currency transfer should take a week to process is because of  outdated procedures. Ripple attempts to create the currency exchange for the digital age. While traditional international transfers require two banks, two reserve banks, two correspondents, and up to a week to process, Ripple offers a transfer method that reduces the time and costs of traditional methods while also offering less failure points and higher security.

Check out Team KoinOK’s Medium post for a smooth summary of how Ripple changes the traditional transfer process.

The other major difference between Ripple and Bitcoin lies in their ledgers. While Bitcoin has a completely decentralized ledger enabled by proof-of-work, Ripple is owned by a private company. Ripple’s internal ledger does not use proof-of-work, but rather a consensus protocol with an amendment system that enacts all amendments that receive 80% support from developers over the course of two weeks. Ripple’s ledger is internal and therefore centralized.

Ripple consists of two components: the digital currency (XRP) and an open payment network that facilitates the transactions. Ripple markets the payment network toward banks as a way of enacting real-time settlements. Ripple is designed as a currency-agnostic transaction system. In order to avoid a currency exchange, currencies are converted into XRP and then sent to the recipient. Unlike Litecoin, XRP are not intended in the long run to be used by consumers to purchase products, but instead to be a middle-man currency that enables instant transactions. XRP and the Ripple network are designed to create a currency-agnostic value web designed to do for currency transfer what email did for messaging.

Rather than take our word for it, check out this awesome summary by Ripple CEO Brad Garlinghouse:

WHAT IS THE CONNECTION BETWEEN THE VALUE OF XRP AND THE PAYMENT NETWORK?

The acute investor must ask: if the Ripple payment network is Ripple’s main innovation, then what is the value of XRP? The long-term value of a cryptocurrency will be dictated by the problem that it is solving. If Ethereum becomes the platform for executing smart-contracts for a massive corporation like Amazon, then that ensure it’s existence in the long run, improving its function as a  store of value. If Ripple becomes the main transfer network for banks, its existence in the long term will be ensured and the function as a store of value will be greatly enhanced.

BOTTOM LINE

The transparency of the team behind the Ripple network and their vision of the platform instills great confidence in its ability to maintain value as a currency. If Ripple can achieve its goal of creating an internet of value where banks can exchange currency as easily as information, then it will definitely have the staying power to outlast the alt-coins and attain significant value over the coming years.

Should My Business Consider Accepting Cryptocurrencies? An Overview

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Recently, Bitcoin has flooded the news cycle, rising in value from about 1,000 per bitcoin on January 1st 2017 to upwards of $16,000 as of December 7th 2017. Square, a prominent payment app, recently announced they will pilot a program that allows for Bitcoin trade. With Bitcoin on the rise, the all-important question becomes: Should your app or website accept cryptocurrencies?

Over the next several weeks, we will endeavor on a series of blogs to answer all of the questions necessary to make that decision, including:

  1. What cryptocurrencies are, how they work, and why they are important.
  2. The pros and cons of accepting cryptocurrencies on your app or website
  3. Choosing your cryptocurrency wallet.
  4. What Blockchain is, how it’s important to cryptocurrencies and its other revolutionary applications.
  5. An exploration of why Bitcoin is the most popular cryptocurrency and of  other prominent cryptocurrencies.

In order to explore cryptocurrencies, we must start at the beginning. The first successful cryptocurrency was Bitcoin, created in 2008 by the still unknown inventor Satoshi Nakamoto. While Nakamoto’s identity is still a mystery, the significance of their invention is not. They initially announced it as a “Peer-to-Peer Electronic Cash System”. Past attempts at creating digital currency involved a decentralized system, however, Nakamoto attempted to decentralize the currency by mimicking the technique of Peer-to-Peer file sharing networks.

In order for a payment network to function, there must be a ledger to prevent fraudulent double spending—forged transactions. In the physical world, banks function as the central entity which keeps records about balances. With Bitcoin, Nakamoto created an alternate system. Since the network is decentralized, every entity on the network must have a list with all transactions to check if future transactions are valid. Not only that, there must be an absolute consensus about the records in order for them to become a part of an immutable record of historical transactions known as the “Blockchain”.

Nakamoto set in place a rule that only “miners” can confirm transactions. Miners take transactions, verify them in exchange for a token of cryptocurrency, validate them, and spread them in the network so that every node adds them to the database and the transaction becomes a part of the blockchain. The only way to create a valid Bitcoin is for a miner to complete this function.

Technically, anyone can be a miner. Since there is no central authority to regulate mining and prevent a ruling party from abusing it, Nakamoto set a rule that miners need to invest some of their computing power to the solving of a cryptographic puzzle using the SHA 256 Hash algorithm, in order to verify transactions. Without getting too technical, the miner must complete a cryptographic puzzle in order to build a block and add it to the blockchain, the reward for which is a specific number of Bitcoins depending on the difficulty of the puzzle. Miners compete to solve these problems and the first to solve it and validate the transaction receives the reward. This is part of the consensus that no peer can break.

While the system is complex, the use of the currency is ultimately quite simple. As outlined in BlockGeeks overview, 5 properties separate Bitcoin transactions from other transactions:

  • Bitcoin transactions are irreversible.
  • They are not tied to real-world identities but to pseudonymous addresses. This is one of the reasons Bitcoins are frequently used on the black market.
  • Transactions are enacted instantly and are global.
  • Cryptocurrencies are secured by a cryptography, making them extremely secure.
  • Without a central authority, cryptocurrencies are permissionless to use.

Cryptocurrencies often limit the supply of tokens, which is true of Bitcoin. The token supply of Bitcoin decreases in time and will reach its final number sometime around 2140. The monetary supply is controlled by a schedule written in code—in other words, purely through mathematics.

Whereas the statement on your bank account represents a debt owed to you by the bank, Bitcoins are not indicative of debts, they are literal currency with inherent value like a diamond. And the value of that currency has skyrocketed in the past year. Only 10 years after its creation, Bitcoin and cryptocurrencies are currently in an inchoate stage, making it all the more important for intelligent citizens to track their progress and global impact.

Next week, we will review the pros and cons of accepting cryptocurrencies through your app or website. Stay tuned!

How Mobile Commerce Is Changing Retail Sales

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Smartphones have brought about unparalleled convenience in our daily lives. We are constantly connected to our rolodex of contacts with a variety of methods of communication. We can access all the information available on the world wide web anytime. Consumers looking to make purchases on the go can find the nearest store with ease. For businesses, the mobile platform represents not only a major avenue for advertising, but an opportunity to give customers the ultimate convenience when purchasing products.

According to Internet Retailer, mobile commerce represents 30% of all US e-commerce and rose by 38.7% from 2014 to 2015. Mobile commerce drives sales, and businesses lacking a mobile strategy are missing out on a major opportunity to increase revenue. Here are the top mobile commerce trends for 2016:

INTEGRATING PHYSICAL WITH DIGITAL

Although the digital world is virtually omnipresent in households, the appeal of immediately receiving one’s purchases by shopping in store remains attractive. Retailers are increasingly offering a variety of online + in-store options to capitalize on the convenience of digital and the immediacy of making a physical purchase.

Apps like Curbside have partnered with Target & Kroger’s to enable customers to reserve their purchases and skip the line when picking up products.

Beacon-enabled features like geo-targeted offers and loyalty rewards are becoming more and more popular. Geo-targeted offers can drive in-store traffic when delivered effectively. According to Target Marketing Magazine, 85 of the top 100 retailers are planning to adopt beacon technology by the end of 2016. Business Insider has predicted beacons will directly influence over $44 billion in US retail sales in 2016.

PERSONALIZED MOBILE PAYMENTS DRIVE LOYALTY

Although services such as Apple Pay and Android Pay were once hailed as the future, they have had a hard time receiving mass adoption. While mobile payment services haven’t gained popularity, the mobile wallet has made a major impact on commerce. Starbucks drives 16% of transactions through its mobile app. Walmart Pay arrived in December 2015, and now Target is next in line to develop their own payment app.

WEARABLES ON THE RISE

According to Arc, there will be a 61% growth in wearable ownership in 2016. App developers and retailers are still plotting on how to capitalize on wearables. Many anticipate a hands-free shopping experience in which one can simply walk out with their purchases and have automatic charges through wearable devices. Malls and large stores like Walmart may use wearables to make it easier for consumers to navigate stores. Wearables represent a major avenue for retailers to create innovative strategies and dictate trends to come.

THE MOBILE WEB DRIVES PURCHASES

While about 85% of time spent on mobile devices occurs in apps, the mobile web has actually proven to be a more successful in driving website traffic. While app usage is prevalent, consumers spend 80% of their app time on their top 3 apps. The mobile web drives twice the amount of site traffic than mobile apps. With 82% of smartphone users looking to their phones in stores when deciding what to buy, many anticipate the mobile web to surpass apps as the largest revenue driver in the next few years.

HOW CAN MOBILE COMMERCE HELP YOUR BUSINESS?

With technology in constant flux, the potential to drive revenue with a refined mobile strategy is constantly growing. Mobile strategies must be created, enacted and reevaluated with every new OS and device. Mobile is an ongoing investment. Understanding the value of a mobile strategy and how each device can enrich a customer’s interaction with your business will lead to long-term revenue growth.

Apple Pay Shakes Up eCommerce

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One of the major features which defined iOS 8 as a success was Apple Pay. Combined with Touch ID, Apple Pay allows users to make purchases on their iPhone using finger-print scanning technology equipped on iPhone 5 and 6. Apple Pay has aroused its fair share of controversy from the banks, who claim Apple, in addition to Google and Paypal, is infringing on one of their core revenue streams. This post will explore the ins and outs of Apple Pay, it’s potential impact on eCommerce, and what it has to offer your business.

Let’s start with the basics. Apple Pay is a mobile payment system and digital wallet designed to make both in-store and online purchasing easier for the user. When purchasing items on a smartphone from iTunes, the App Store, or third-party apps, Apple Pay uses Touch ID for instant check-out. When purchasing items in-store, Apple Pay utilizes near-field communications so that, like in the digital world, all it takes is a fingerprint scan for a seamless check-out experience.

Apple Pay is not the first of it’s kind. Google Wallet, launched in 2011, was the first major mobile payment system. Google Wallet also utilized near field communications, bu Google Wallet, unlike Apple Pay, did not catch on in any big way. In fact, the recent surge in Apple Pay use has actually caused a resurgence in Google Wallet use.

One of the main differences between the two platforms is Apple Pay’s insistence on protecting the user’s private information. “We are not in the business of collecting your data,” said Apple’s Senior Vice President of Internet Software and Services Eddy Cue at the Apple Pay announcement in September. “So when you go to a physical business and use Apple Pay, Apple doesn’t know what you bought, where you bought it, or how much you paid for it. The transaction is between you, the merchant, and your bank.”

When you add a card with Apple Pay, it only stores a portion of your credit card information, along with a device-specific Device Account Number, but all of your personal information is encrypted. Apple Pay demonstrates it’s not only possible to have secure in-store mobile transactions on your iPhone, but  these transactions are actually even more secure than physical ones.

Apple Pay has been expanding rapidly. It launched with the support of McDonalds, Whole Foods, Nike, and Uber. Recently, ten more banks, including SunTrust, TD Bank North, and Commerce Bank all agreed to use the service. Apple says in a recent New York Times article it supports the cards of 90% of the credit card purchase volume in the US.

Statistics on Apple Pay point to staggering potential. According to MarketingLand, in September 2014, 49.7% of online shopping done on a mobile phone was on an iPhone. 81.6% of tablet e-commerce transactions are done on iPads.

So what does Apple Pay mean for eCommerce? For one, it makes secure purchasing easier than ever for consumers. There’s hope that given the increased competition in payment options, retailers could see decreased fees and improved profit margins.

Alex Martins, chief executive of the Orlando Magic, recently said to the New York Times: “One of the biggest pieces of feedback we get from our fans is that the food and beverage lines are too long… It keeps them from going to the concession stand because they don’t want to miss the action. This, and technologies like Apple Pay, will speed up our service.”

Retailers are also hoping for opportunities to team up with Apple Pay for promotions, however, this would require Apple to keep transaction data in their database, which Apple is currently opposed to for security reasons. As the service refines, it seems inevitable there will be exclusive Apple Pay deals and more of an effort to push consumers to utilize the service. The question is whether Apple Pay will eventually be able to take the next step and replace physical credit cards. Only time will tell.

Mystic Media is an app development and strategic marketing firm providing a host of services to clients, from Android and iOS Development, eCommerce, Web Design, and more. Contact us today by clicking here, or by phone at 801.994.6815

Android Payment Technologies – The Death of Physical Cash Seems Eminent

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One of the major points which consistently arises in evaluating the perks of the Android platform is its superiority as a mobile payment device. Mobile payment is the future. Of what use is a credit card or even cash when it’s purpose can just as easily be served on a smartphone with additional convenience? As mobile payment technologies continue to evolve, the death of physical cash seems eminent.

 Google Wallet, first released in 2011, is the major mobile payment technology used for Android. Google Wallet supports all major credit and debit cards, including Visa, MasterCard, American Express and Discover. By storing all of the user’s credit card information on the cloud, Google Wallet makes it easy to pay for anything whether in-store or online.

Most Android payment technologies utilize NFC, or Near Field Communications, a set of standards for smartphones which allows communications by touching or putting the devices in close proximity. NFC allows you to pay for purchases through your smartphone without the hassle of paper or signage, all one needs to do to make a purchase is either tap the smartphone against a NFC compatible device or have it in proximity.

The major critique of NFC technology is the lack of security and cost of implementing the technology. Recent advancements have brought upon the development of Host Card Emulation, which makes it cheaper for merchants to install NFC technology into their organization and allows for secure transactions wherever the user pleases.

While Android remains the leader in mobile payment technologies, Samsung is currently giving them a run for their money with the Galaxy S5. The S5 is the first smartphone to utilize fingerprint technology to authorize payments. Fingerprint technology eliminates the need for passwords or PINs, not only making payments more secure, but protecting the user’s other accounts which often utilize the same complex password or PIN.

The numerous competitors in the mobile payment technologies market only goes to show the demand for mobile payment solutions. If your business expects to compete in any given market, it’s vital to eliminate any and all stresses in the process of purchasing. More to come shortly… Stay Tuned!