PERSPECTIVE: Is There an Answer to Instant Transactions in Cryptocurrency?
The Lightning Network vs Ripple vs OMC/COTI
It’s been an interesting month in cryptocurrency and its ascendancy into the realm of instant payment transactions. As different industry players seek to solve the issue of real-world fast and efficient transacting, who will deliver the goods?
Two potential giants in the industry continue to move forward, but you could be forgiven for thinking no one appears to care. And a young upstart finalizes a new technology that could revolutionize the use of crypto in retail transactions.
Earlier this week Ripple announced that Ria Money Transfer, the 2nd largest money transfer company in the world, has signed an agreement to use the RippleNet technology to access Ripple’s global blockchain payment network. Sounds like a big deal, right?
However, Ripple only increased 1.5% following the news. While that may sound decent, it has to be compared to the other top 10 cryptos to really understand what’s happening. All the top 10 cryptos increased in value this week… all of them. And relative to the others, even with this huge partnership agreement, Ripple was the 2nd LOWEST increase among the top 10.
Which begs the question WHY?
It could boil down to function. Ripple has always been a crypto that didn’t want to behave like a crypto. They are a company, not an independent token. Their value is clearly controlled by the parent company, and they were created to function with corporate banking as a new alternative for bank to bank money transfers. They are not a coin that wants to “recreate” the banking industry. In fact, they very much want the banking industry to continue. They just want to replace SWIFT, international banking’s 43-year-old existing system, which is slow and cumbersome.
And while Ripple seems to be succeeding in slowly replacing the SWIFT system, to the observant consumer it’s just the banks setting themselves up to make more money. While the system is clearly faster than SWIFT, there is no reason to suspect that the banks will return the costs saved back to their customers. As a rule banks are in it for the profit, and this system, faster and cheaper than SWIFT, will increase their bottom line.
Another concern is that there are those who believe that Ripple may end up classified as a security. And if it does end up as a security, it will come under the SEC’s tightly controlled guidelines. And while Ripple might not care, your smart crypto investor does.
Most crypto enthusiasts LOVE the independence from banking and government that cryptocurrency represents. They love the speculative nature of the industry, anxiously waiting to see who will become the next “big deal.” And to put it simply, they don’t find a token embedded inside the banking system sexy. If they wanted to go mainstream, they would just invest in Amazon stock.
The second news of the week is for The Lightning Network, which announced it has reached over 8,000 nodes and a capacity of USD $5.6 million. While these aren’t particularly large numbers, it does show growth. So, for those who are fans of the technology, it was a positive spin.
The downside is that The Lightning Network, which sits atop the Bitcoin blockchain, was an innovative idea a few years ago but has taken a long time to show signs of being a working solution for the turtle-slow pace of the Bitcoin Blockchain. And while it does speed things up quite a bit, it is still amazingly slow compared to many of the newer technologies that have been introduced in the past year. As has been mentioned previously, it may be a case of a good idea reaching maturation too late to compete with newer technology. Because as long as Bitcoin is considered by the world a “value asset” like gold, it will never become a vehicle for daily commerce.
The third subject of interest this week is COTI’s recent announcement that they had completed the running of their TestNet, a DAG-based “Trustchain”. They stated that the extensive testing was successful and that they are confident the final Trustchain will operate at their intended baseline of 100,000+ transactions per second.
It was also announced that a deal had been reached with Ormeus Coin to create an individual DAG “Trustchain” for the Ormeus Cash coin (OMC) that will run alongside the core COTI DAG Trustchain. OMC is a double-collateralized transactional coin specifically designed for cryptocurrency payments worldwide. When you combine the OMC with the super-fast Trustchain, you are creating a state-of-the-art turnkey system that could knock traditional payment systems for a loop. It’s the allure of super low cost, near-instant transacting, that will have true cryptocurrency proponents excited to learn more.
With the bigger name programs seemingly focused on fixing what isn’t working, newer and faster systems are quickly transforming the crypto landscape. It is little wonder that so many eyes are focused on projects and solutions that offer truly fresh “outside-of-the-box” approaches. While we are all appreciative of the innovations that the early crypto giants created, it is time to look to the next generation of cryptocurrencies for lower cost, faster and more productive solutions.
