Electroneum has created and patent a revolutionary instant payment system, that will enable vendors around the world to start accepting cryptocurrency payments with instant, real-time confirmations.
This is groundbreaking technology in the cryptocurrency industry that brings together the best of blockchain’s decentralization and the modern world’s fast payment technology.
Let’s start our discussion by describing the problem that the instant payment system is trying to solve.
The Problem: Waiting Time
Compared with today’s fast-paced checkout systems, blockchain technology is too slow to compete effectively.
If you were to go to a store (online or offline) and try to buy something using a cryptocurrency – say Bitcoin, you would have to wait a while for the transaction to complete securely.
First, the transaction must be broadcast to the world and picked up by miners. If you’re lucky, your Bitcoin transaction will be included in the blockchain within 10 minutes. But that doesn’t guarantee a successful transaction yet. To be absolutely sure, you’ll need to wait for the transaction to be confirmed in 5 more blocks – making for a 1 hour total wait time!
These wait times are simply inadequate and unable to compete with the near-instant confirmations of Visa and Mastercard. It’s true that there are other cryptocurrencies with faster block times that might be better alternatives, but even Ethereum will require you to wait 5 minutes for the usual 20 block confirmations.
For most people, that’s simply too long.
The Solution: An Instant Payment Notification System
Electroneum has created and patented an instant payment notification system in which they will act as a trusted third party between the buyer and seller, and facilitate the transaction between them. In this way, they could be seen as a payment gateway backed by the blockchain.
The role they will play in the transaction works like this:
Once the buyer transfers ETN to the seller, Electroneum confirms the transactions in real-time to both parties. Behind the scenes, Electroneum “reserves” the funds in the buyer’s wallet so that it can’t be spent again, and proceeds to transfer the reserved ETN to the seller’s wallet via the ETN blockchain.
If the transaction fails the first time for whatever reason, Electroneum will re-attempt the transaction behind the scenes until it is successful. As said in the blog post describing this technology, the seller should have his/her funds within an hour.
How A Typical Transaction Works
Electroneum released a demo video showing how a typical transaction works on the instant payment system.
According to the video, here’s how the process will work.
- A buyer picks an item to buy (whether online or offline) and proceeds to checkout.
- At the checkout, the seller enters the details of the transaction and a QR code is generated on his screen.
- The buyer scans the QR code using his/her Electroneum app and enters his PIN number.
- Both devices get instant confirmation that the transaction was successful.
- The buyer can now leave the store with his/her goods.
After the transaction, the following takes place:
- The funds are “reserved” in the buyer’s Electroneum app wallet, so he won’t be able to spend it on something else.
- Electroneum will submit the transaction to the blockchain and re-submit it if unsuccessful.
Electroneum will also share the buyer’s email address and ETN wallet address with the seller so that refunds can be made if the need arises.
Take note that regular, conventional blockchain transactions are still possible. A buyer does not need to use Electroneum’s instant payment to make a transfer. He can still transfer the funds using traditional blockchain methods but will need to wait longer to see the transaction confirmed.
Along with the front-end, the Electroneum team has created an API system that allows virtually any device or website to tap into their instant payment system and start accepting payments.
The following platforms are supported or can be integrated with the API:
- Electroneum’s vendor app on mobile or tablet (to be used at restaurants, bars, or festivals)
- Traditional Point of Sale devices (such as in a grocery store)
- E-commerce websites, such as WooCommerce-powered stores
- Other websites that create custom integrations with the API
Below are some videos of Electroneum instant payments being integrated with e-commerce…
As well as with till points of sale (ISS):
The functionality will also be available on mobile phones, working via an app-to-app basis. So any two app users will be able to perform a transaction between them and get instant payment confirmation.
The instant payment system is currently in beta testing phase and new vendors are invited to integrate their points of sale with the API.
This system is revolutionary to the cryptocurrency industry. It places Electroneum at the forefront of cryptocurrency payments (considering they hold the patent rights to the technology), and therefore also at the forefront of mass adoption!