Recurring Billing In Blockchain: How DreamTeam Does Secure, Transparent & Reliable Recurring Transactions
Subscription business models are flourishing around the world. Different web services charge your bank account once, or if the subscription is for an extended period, generally once per month, providing you with some utilities in exchange. This is a quite common merchant-customer relationship today. However, technically, nothing prevents your bank or payment provider from charging you more than you owe, except moral and legal obligations.
We, at DreamTeam, are solving the problem of trust for the entire esports community, providing a way to pay for services securely by using blockchain technology and smart contracts that enable transparent and fair recurring billing. We have released recurring payments for the DREAM token for users of DreamTeam.gg’s platform just recently.
Curious how it works? Continue reading!
Blockchain and Distributed Ledger Technology
Despite the fact that blockchain is facing a lot of adoption and regulation difficulties in 2018, it’s a kind of technology which is here to stay, whether it’s blockchain, hashgraph, tempo or any other distributed ledger technology still to come, regardless of the algorithm.
The main value that blockchain and other similar technologies bring can be generalized as follows: they allow people to write and run programs which, practically, cannot be changed after creation nor tampered with during execution. In other words, these programs always run as designed, and no single party can influence their behavior.
This definition is valid for many cryptocurrencies that exist today if we consider them as programs that define how coins can be transferred back and forth. This also explains why cryptocurrencies and many kinds of tokens have real value: they cannot be generated out of thin air, by their defined “underlying programs”.
Recurring Billing in DREAM Tokens
In fact, smart contracts, or, more generally, decentralized programs can help us with any kind of agreement, but only with tokenized assets — a value directly registered in blockchain in the form of tokens. Blockchain cannot guarantee that your bank will release your money on time (unless your bank is built on top of it), but blockchain can guarantee that for tokenized assets, because tokens can be programmed, unlike dollars.
Today, our users can subscribe to get DreamTeam.gg premium features and pay for services using DREAM tokens securely and transparently. Without any exceptions, DreamTeam’s smart contract guarantees that the customer is charged once a period and not more nor less than was stated.
We, at DreamTeam, have developed a recurring billing smart contract for the DREAM token, as well as a smart contract factory that can be used to create the same recurring billing smart contracts for other tokens. Here is the algorithm of how token recurring billing is implemented:
- The recurring billing smart contract works with two entities: Merchant and Customer. In the case of Premium subscriptions, DreamTeam.gg becomes a merchant and inserts itself into a smart contract to charge and receive tokens, whereas customers are DreamTeam.gg users who attest that a particular merchant is authorized to charge their accounts.
- All recurring billing approved by a user has a Billing ID, given and used by DreamTeam to charge a user’s account. One user’s account can have multiple active billings at the same time.
How DreamTeam back end interacts with a smart contract
Here’s how recurring billing works under the hood:
- DreamTeam inserts themselves in a smart contract and retrieve a Merchant ID, which is used to identify with which merchant the customer is entering into the agreement.
- DreamTeam users, using our convenient user interface, allow DreamTeam to charge them. Then they allow a particular recurring billing, which is requested by DreamTeam.gg.
- Once allowed, DreamTeam can charge a user’s account by making a charge transaction to a smart contract, but no more than once in a specified period of time. On each charge, tokens go directly from the customer’s account to DreamTeam.
From the user’s perspective, the subscription process is really simple. The user just needs to press a button that enables recurring billing and a Premium subscription on DreamTeam.gg. Once the user confirms the transaction in their Ethereum wallet, the billing cycle is activated.
If you would like to know all the technical details of our implementation, refer to this technical article.
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