Satoshi envisioned a payment system that was faster, cheaper and irreversible. No financial institution needed. Nor did it need a 3rd party to mediate conflicts either.
‘’A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution.’’ Satoshi Nakamoto
The idea of sending a payment without going through a financial institution is a plus. The decentralization makes sense. Transactions are fast and cheaper. But realistically there is and always will be one high risk factor. You are not dealing face to face.
The Bitcoin in many ways is similar to a model that exists for decades. Western Union’s model. Both ways you can send money P2P without dealing face to face. On both models transactions are final and nonreversible.
Bitcoin is decentralized and Western Union is centralized therefore more expensive and bureaucratic, but in the end they serve the exact same purpose (sending cash) and are both final.
Due to its non reversibility, Western Union is clear and advises clients not to send money for purchases as the risk of scams is huge and they strongly advises to personally know the person to whom you are sending the cash.
Western Union is clear in its model. Bitcoin is decentralized and unclear.
BLOCKCHAIN, TRADITIONAL PAYMENTS & UTRUST:
Advantages:
Blockchain transactions are faster and cheaper than traditional models. Due to it’s nature they are irreversible and therefore safer for sellers.
‘’Transactions that are computationally impractical to reverse would protect sellers from fraud’’ Satoshi Nakamoto
Problem:
The mainstream traditional payment services are outdated, expensive, slow and full of fraud. People are using cryptocurrencies for commercial transactions as an escape.
The majority of cryptocurrency transactions are commercial. In essence cryptocurrency payment processors have a nonreverseble model like Western Union but serve a commercial purpose as PayPal.
Nowadays there are some big payment platforms that allow sellers to accept cryptocurrencies from buyers, such as cryptopay, bitpay, coinpayments. Although this platforms are faster and cheaper to use, than traditional payment solutions, they lack on realism and understanding of human nature. The idea of having an online commercial payment platform that does not rely on a 3rd party mediator to ensure the safety of the transaction for the buyer is unrealistic due to its own nature (the payments have a commercial purpose and are not done face to face).
‘’A certain percentage of fraud is accepted as unavoidable.’’ Satoshi Nakamoto
What is the percentage? Who defines it?
Solution:
By blending a strong buyer protection mechanism with blockchain’s advantages, UTRUST created the best payment solution in the world.
UTRUST payments are fast, cheap, reliable and safe. An independent mediator mechanism will ensure the trust and safety that, for now, is absolutely necessary.
In order for us to benefit from the blockchain’s advantages and take cryptocurrencies mainstream as a leading payment solution we need to fully understand the human nature and where it stands.
‘’and routine escrow mechanisms could easily be implemented to protect buyers.’’ Satoshi Nakamoto
One day it will be routine. For now and due to human nature buyers protection needs to be a standard.
Check out our project and share your thoughts!
References
Bitcoin: A Peer-to-Peer Electronic Cash System by Satoshi Nakamoto
Nuno Correia, CEO & Co-founder UTRUST, 20/08/2017
