Blockchain-Enabled Decentralization is the Solution to Visa’s European Failure

Friday, June 1st provided us with another reminder of the downfalls of centralization as millions of individuals and businesses across Europe were left unable to pay for goods and services. Thanks to Visa’s Europe-wide network outage that lasted throughout the day, unless you happened to have quick access to cash you were unable to buy any of the daily necessities of life.

Imagine that you’re sitting in your favorite restaurant having just enjoyed a meal. When it’s time to pay your bill, you discover that you can’t, because Visa-enabled cards are your only means of payment. Or that you’re running late for a Friday-afternoon meeting and are low on fuel. When you try to pay for fuel at a service station, you again discover that it’s impossible because of Visa’s network failure. If you live in Europe, there is a good chance that you saw signs like this around your city on Friday:

As you might imagine, downtime for any service that handles 150,000,000 transactions per day is going to cause effects ranging from irritation to outright panic. It only takes a quick scan through Twitter to get an idea of just how people were affected in different ways.

From those who couldn’t pay for their goods or services:

To those who were taking the brunt of the blame even though they had nothing to do with it:

It’s safe to say that there is never a good time for a critical piece of our international financial infrastructure to fail. Especially so for a company that has adopted the tagline “Always On.” Officially, Visa shared that the issue was due to a “hardware failure,” and given that transaction processing was affected but network connection was not, it is likely that some form of central database or other critical infrastructure had issues. Visa’s full statement:

Earlier today, Visa had a system failure that impacted customers across Europe. Our goal is to ensure all Visa cards work reliably 24 hours a day, 365 days a year. We fell well short of this goal today and we apologise to all of our partners, and most especially, to Visa cardholders. Visa cardholders can now use their Visa cards as we are currently operating at close to normal levels. The issue was the result of a hardware failure. We have no reason to believe this was associated with any unauthorised access or malicious event.

The good news is that failures like Visa’s are helpful in shining a light on decentralized, blockchain-powered protocols and applications that aren’t prone to these kinds of failures. In fact, Visa’s problems on Friday could have been prevented had they been transacting on a decentralized blockchain. In a decentralized network, hundreds to thousands of peer-to-peer nodes form the infrastructure of the network. Even if one goes down, other nodes are still running and transactions continue to process. For example, here’s a picture of Ethereum nodes in Europe:

From Ethereum’s Péter Szilágyi (

In the case of the Ethereum blockchain, it would take an attack that affects a majority of the nodes in the network to cause a catastrophic failure like Visa’s European example. As you can see above, that is unlikely to occur.

Blockmason has taken this idea a step further by creating a protocol that functions as a standardized and reliable way to record debt and credit obligations on the blockchain. Our Credit Protocol is perfect for credit card companies like Visa, where each transaction represents a debt obligation between the consumer, Visa and the merchant. Transactions through the Credit Protocol are processed by the 17,000+ nodes powering the Ethereum network. The outage of any one node will not cause a system-wide failure. And while some can point to the slow transaction speeds of blockchain-powered networks at the moment — remember, Visa processes tens of millions of transactions per day — the advent of second-layer scaling solutions such as Plasma or other next-generation blockchain implementations will solve this problem.

Here at Blockmason, we’re hard at work promoting the Credit Protocol with the goal of driving industry-wide adoption. We see a future where businesses and consumers aren’t stuck facing payment or credit transaction issues like those of last Friday. As a proof-of-concept of how companies can implement the Credit Protocol, we have released the first mobile distributed application built on the Credit Protocol, and one of the first blockchain-powered mobile apps available in app stores, Lndr (pronounced: len-der).

Lndr is an expense-sharing and bill-splitting app that allows users to create, manage and settle casual debts and IOUs on the blockchain. Currently, users can settle with Ethereum (ETH), with support for additional cryptocurrencies coming shortly. Users can also record their debt on-chain but settle it off-chain, in cash or other ways. The app currently supports multiple languages, records debts in various currencies and allows for cross-currency settlement. Eventually, users will be able to settle in fiat currency through PayPal integration which will be perfect for group events, like ski trips and holidays. Lndr and the Credit Protocol is the first and easiest way for consumers to build a credit history on the blockchain, which will let Blockmason integrate credit scoring with micro peer-to-peer lending in the future.

If you would like to try Lndr, you can find it in the App Store for iOS here and in the Google Play Store for Android here.