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Digital currencies are a viable payment solution, contrary to PayPal’s views

COTI — Currency of the Internet

PayPal CFO John Rainey recently stated in an interview with CNBC that the company hasn’t seen much interest in digital currencies from their merchants due to the volatile nature of cryptocurrency prices, explaining:

“If you’re a merchant and you have, let’s say, a 10 percent margin on a product that you sell and you accept Bitcoin, for example, and the very next day it moves 15 percent, you’re now underwater on that transaction. Right now, we don’t see a lot of interest from our merchants, but if it’s something that stabilizes in the future and is a better currency, then we’ll certainly support that.”

The latter statement echoes recent news of PayPal’s patent filed in March, which aims to increase cryptocurrency processing speeds. If the technology takes off, it will enable consumer-merchant transactions to be completed instantly and off-chain, eliminating exorbitant transaction fees in the process.

When that comes to fruition is yet to be determined, but the payment platform has many other shortcomings to contend with. Since its inception, PayPal has charged a host of fees to merchants and consumers depending on domestic or international transactions. These fees typically include a percent cut along with a fixed rate that can range anywhere from 2.9% to 6.5%, particularly for micropayments. For merchants with a 10% margin, as echoed in Rainey’s earlier comment, these fees are quite substantial. What’s more, bank transfers can take anywhere from 48 hours to several days, while instant credit card transfers necessitate additional fees. These issues are further compounded by the fact that certain PayPal functionalities are restricted depending on the country of jurisdiction.

To amplify its cross-border reach, PayPal will need to depart from its third party service providers, such as partnering banks and payments processors, in order to provide its client base with a cheaper and faster way to manage their finances. With the advent of cryptocurrencies, such as Bitcoin and newcomers like COTI, Currency of the Internet, offering compelling alternatives, PayPal is already trailing far behind.

Jack Dorsey, CEO of competing service Square Cash, recently expressed his optimism towards the mass adoption of digital currencies around the globe. “This technology is a fundamental shift to our world and can have so many positive outcomes. We have to do the work to educate regulators and educate the SEC why this technology is important,” explained Dorsey at the Consensus conference in early May. “The internet deserves a native currency; it will have a native currency. I don’t know if it’ll be Bitcoin or not, but I hope it will be,” he added.

While Square Cash is able to process Bitcoin transactions, the issues of price volatility, high fees and slow processing speeds are well known deficiencies of the dominant cryptocurrency. DAG-based systems, however, have emerged to target these shortcomings directly. COTI, for example, enables instant transactions with virtually zero fees. The payment platform also provides COTI-powered merchants with access to hedging services that enable them to reduce, or eliminate, their exposure to nearterm currency fluctuations. This works to eliminate the volatility they may be exposed to between the time a payment is received and the time of settlement. With price stability, cheaper transactions and fast processing, COTI adds an extra layer of trust to the mix with its Trustchain algorithm and buyer-seller protection system.

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COTI is also laying the licensing foundations that will enable it to comply with existing regulations. In COTI’s view, adherence to KYC and AML procedures, along with a DLT license will serve as a catalyst for the mainstream adoption of digital currencies and easing of cross-border constraints faced by countless merchants. This further dispels recent comments by PayPal CEO Dan Schulman regarding inconsistent regulation in the crypto industry.

The demand for an alternative to the limitations of incumbent payment systems is palpable. Merchants — particularly small businesses — are decidedly interested in driving down processing fees. 2,000 merchants and 50,000 users have already signed up to COTI’s alpha net launch this upcoming August. For PayPal to maintain its grip on the market, it will need to find workarounds to its insufficiencies, which are quickly being eclipsed by nascent digital currency contenders.

We are excited to announce that COTI will be launching a special pre-sale limited to our community. The Pre-sale contributions will start on June 4th 2018 for 2 days and available for whitelisted members only! For more details get in touch with us on Telegram or via email.

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COTI is a DAG-based Layer 1, specifically designed for Enterprises. COTI’s Protocol is scalable, fast, private, inclusive, low cost and is optimized for finance