An Overview of Cryptocurrency
The cryptocurrency market is growing at an exponential pace. It’s accelerating momentum is driven by the rise of blockchain technologies, the transformative impact of decentralization and the unprecedented profit potential of a new asset class. The innovation of this eco-system, comparable in technological importance to the internet’s invention, has generated extraordinary economic opportunities for investors who recognise its wider scale implications.
Digital currencies and crypto assets are building decentralized technologies, which stand to irrevocably change the global economy. This will occur through its role in distributing value, democratizing governance and disintermediating industries. This presents unseen opportunities on which investors can capitalize because there remains significant long-term growth in the young market. In fact, recent data analysis has found that there is a current annual compound growth rate of 31% which, if continued, will result in an estimated global market value of 1.80.6 trillion U.S. dollars by 20211. This means that even if a mere 30% of the market continues to circulate, total transaction volumes will exceed an estimated 500 billion US dollars throughout the global electronic payment industry alone during 20182.
In the cryptocurrency industry, there are three main categories of technologies in which to invest. The first is broadly synonymous with digital currency’s first use-case and solves for exchanges of money and stores of value; the second relates to decentralized applications (DApps) built on the blockchain; and the third involves protocol level technologies on which these applications are built. However, through an objective perspective one can come to the conclusion that a majority of cryptocurrencies are still nestled within the context of peer-to-peer exchanges of money and stores of value, in which cryptocurrency holders directly and irreversibly transfer assets from their own account to an alternate parties account through P2P transfers, with processing times varying from several minutes to several hours. The collective efforts of industry development, with a particular focus on e-commerce and mobile Internet specifically throughout the last 20 years, have resulted in a rapid sophistication and infrastructural growth of traditional electronic payment systems.
Features that users have since become accustomed, including:
➢ An All-in-one account or eWallet that supports multifaceted payment means (eWallets like Wechat Pay, Alipay supports both credit cards, debit cards, and credit facility without a physical card), and transaction credits (such as IOUs)
➢ Asian users, (especially within a Chinese demographic) prefer to pay with digital wallets integrated into mobile applications instead of relying on physical cards.
➢ Domestic and X-border transaction can be completed in seconds with a physical store or e-commerce site.
➢ Consumers who shop online are protected when they use escrow service such as Alipay’s escrow payment service.
In order to generate further income, merchants now integrate multiple payment methods to cater for an increasingly diverse array of clientele and improve the efficiency of their financial systems. Services that currently benefit merchants across the world include:
➢ Welcome of all secure payment methods according to customer preference, as they can help strengthen consumers’ purchasing power and increase income for the merchant.
➢ Fast settlement is preferred. T+0 model (merchants receive fund of transactions within the same business day they conducted) or even a real-time model. One example is the D0 transaction which accepts settlements on bank holidays and is popular amongst merchants in China.
➢ Since merchants now utilize multiple channels for product distribution (physical stores + online stores), payment methods should support consolidation of payment and related information for own operation and accounting efficiency.
➢ X-border business require and process foreign-currency transactions with an automatic currency conversion at preferred rates.
➢ To increase sales, merchants now integrate call for payment with their own business flow, for example, auto debit, subscription payments (subscription fee with cable companies, and a combination of various payment types such as instalments, multi-level distribution etc.
➢ Multinational companies enable payments across a diverse range of countries by streamlining transactions through a single service provider.
After 50 years of growth, electronic payment networks have since become separated from the industry association’s “consortium-member negotiation mechanism”3, thus resulting in a barrage of centralized conglomerates taking mass control of the market. To protect their self-interests, these industry “giants” have adopted an array of rigid, complex rules and mechanisms to restrict access and retain inherently inefficient systems. However, complex organizations, and bureaucratic inaction coupled with potential of corruption have all lead to a stagnation of innovation that have resulted in complicated payment rates and high risk. Such factors are also reasons as per why certain payment providers and electronic platforms in emerging markets like China and Brazil have become comparatively advanced in recent years. In lieu of these facts, the efficient, transparent, and secure nature of blockchain technology and cryptocurrencies are bound to create breakthroughs within these emerging markets first.
The vision for Alchemy Foundation (Alchemy) is to provide an open and decentralized protocols for the global payment industry, especially for acquirers to serve their X-border trade merchants. We will also provide payment companies with open-source protocols and rapid product development platforms that will use decentralization, smart-contracts, and consensus mechanisms to give their merchants and consumers access to fast, secure, convenient, flexible and rapidly popular global payment solutions.
With Alchemy and its experienced eco-system partners, the team is confident that they can empower the industry with inherited benefits brought by blockchain to provide a series of advanced payment solutions that are provenly welcomed by merchants across the world by utilizing smart contract payment protocols and incentivizing more payment providers to join the eco-system. We aim to activate the innovation capability of industry technology talent, achieve consensus within the community through protocols, ensure transparency of execution by technology, hence we are able to facilitate the mass adoption of cryptocurrencies into our day-to-day life in foreseeable future.
The advantage of Alchemy lies in our team’s deep understanding of the payment industry and our collective operational experience. The team is not only well-versed in the identifying global payment trends such as digital wallets, cross-border acquiring, hierarchical fund collections by multination corporations, commission disbursement with multi-level marketing companies but also maintains strong relationships with a diverse network of electronic payment industry communities throughout Asia.
The Alchemy decentralized payment network features are as follows:
- Open and scalable Alchemy consensus protocol to establish payment industry norms and promote changes in the payment industry
- Use lightning network technology to achieve real-time transaction of existing electronic payments
- Offer the most comprehensive support for various cryptocurrency payments for consumers and businesses to choose
- Online/Offline one-stop order; seamless integration with mainstream smart POS; fast access to various applications for online SDK/Plugin/API
- Decentralized basic network, operation and governance networks, including dispute arbitration, custody, credit scoring , risk control, anti-fraud, clearing, etc., to greatly improve operational efficiency and reduce operating costs
- Basic payment functions and solutions for large-scale commercial applications:
- PULLPAY, PUSHPAY; combined payment, subscription payment, targeted payment; multiple types of account systems
- Visual, simple, standardized smart contract market; lower threshold for commercial use of smart contracts
- Self-evolving communities and open ecosystems; attract more innovation technology companies to join the community and promote the development of the industry’s public chain
- Perfected localization compliance and anti-money laundering programs for different countries and regions
We believe that the payment of cryptocurrency should be more convenient, safer and more secure than the existing mobile wallet payment. For merchants, the cryptocurrency should be more comprehensive, safer and more efficient than the current aggregation payment scheme.