Tuesday Team Talks № 16:
Blockchain In Payments
As part of our continuing educational blog series, today we will focus on blockchain as an alternative payment method in online transactions, and provide an example of how we utilize FRX ledger to process loan payments. Until recently, blockchain and cryptocurrencies were just enigmatic words that were used by a community of enthusiasts. However, over the past few years, the number of users of cryptocurrency wallets has seen a steady increase as use cases develop and mature.
In 2009 Satoshi Nakamoto introduced the world to blockchain by publishing a whitepaper called Bitcoin: A peer-to-peer electronic cash system. Satoshi saw an opportunity to utilize cryptography to bring about an alternative to the traditional monetary system to cut out middlemen and improve efficiency. Peer-to-peer transactions are processed by network nodes, using cryptography to solve mathematical equations in order to validate a transaction. Nodes are rewarded in native coins (cryptocurrency) for processing the transactions on the network.
Utilizing this cryptographic approach, several advantages were realized:
- High efficiency and speed of transactions;
- No third-party necessary to validate transactions;
- Lower transaction costs;
- Irreversible transactions, guaranteed fulfillment;
- Immutable ledger with all historical transactions;
- Round-the-clock availability and uptime;
- Opportunity to bank the unbanked;
However, mainstream adoption of this technology can only take place when the general public has access to easy-to-use interfaces that interact with the blockchain on their behalf.
Let’s dive into an example of how correctly utilizing this technology can unlock significant opportunities and benefits for users. To make transactions easier and faster, FintruX Network has introduced an FRX ledger. When lenders are on-boarded, they verify the amount of funds they wish to lend, which is then credited on an FRX ledger (1:1 with the local currency) in their account. Upon successful matching of lender and borrower, our system automatically transfers the appropriate FRX signifying the loan amount to the borrower. The borrower now has proof, on the public blockchain, that they are holding FRX that is representative of the lender’s funds. Borrowers can now present FRX to the lender to receive their funds in the required currency at their convenience. Upon receiving FRX, lenders will destroy the ledger and send the requested currency of corresponding value.
This feature enables funding to be done in seconds and opens the doors for new exciting possibilities. Cryptocurrencies have come a long way from when it was first introduced. It is now possible to use certain mainstream cryptos to pay for a car, a house, a holiday, rent, utility bills, and your taxes. We foresee a future where FRX will be widely accepted by all participants in our ecosystem and their vendors, so much so that when the borrowers receive their FRX, they will not need to exchange it out for an alternative currency immediately and can pay their obligations for business needs directly with the FRX.
This is how we can bridge the gap between fiat money and digital cryptocurrencies, to tackle the challenges involved with fees, delays and central points of failure. The benefits of the underlying blockchain technology are passed over to the end-users without the need for in-depth, complex knowledge of the technology. The future is exciting and we are proud to be utilizing this cutting-edge technology to benefit the global economy and advance the financial success of every SME.
The FintruX team
About us: FintruX Network is the true P2P lending ecosystem built on the blockchain, powered by credit enhancements and no-code generation. The platform makes it easy for borrowers to connect with reputable lenders and servicing agencies, save money with competitive interest rates, and get an affordable loan within minutes in a fair and transparent process without collateral.
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