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The title of a white paper on Bitcoin defines the digital currency as “A Peer-to-Peer Electronic Cash System.” Digital currencies were designed to facilitate payment. However, an in-depth view into what Bitcoin has become shows a different picture, due to three factors, in addition to conflicts with existing systems.
- Low adoption rate of digital currencies among merchants. Bitcoin may be trending among consumers, but merchants, who need to think practically, are unlikely to accept something so new.
- handling ？of the payment when done with a digital currency is not efficient. Bitcoin can only process seven transactions per second, well below real-world market demand.
- High level of volatility in the value of digital currencies. As long as a digital currency is not deemed a fiat currency, volatility in its value will remain a fiendishly difficult problem, especially for merchants.
LITEX, a decentralized instant payment solution for cryptocurrencies, is mainly used for cryptocurrency micro-payment. Relying on the Lightning Network, the solution supports instant payment of an array of digital currencies. LITEX aims to enable real P2P payments between users and merchants at ultra-low fees and latency in a bid to support the micro-payment scenario.
LITEX’s strategy of a payment solution that does not rely on a bankcard is of great significance to a decentralized micro-payment solution for cryptocurrencies.
As for the biggest challenge to cryptocurrency payment, the first thought that comes to mind is “decentralized”. On the one hand, mainstream exchanges are fully centralized institutions, while the risk of funds being stolen and the lack of timeliness in processing and completing a transaction make centralized exchanges unlikely to become part of future payment solutions. On the other hand, the fiat currency-based settlement method currently used by merchants requires coordination and cooperation between different payment institutions for completion of each transaction, coupled with the fact that the middlemen payment institutions charge merchants high service fees. As there is, to some extent, direct competition between cryptocurrency’s globalization attribute and card organizations’ cross-border settlement function, card organizations are unlikely to support any kind of cryptocurrency. The significance of a decentralized cryptocurrency payment system is highlighted.
LITEX combines the operation and matching strategy deployed in China’s leading payment product, a non-bankcard payment?0?0?0?2solution that relies on a cryptocurrency for the payment, to solve the issue of low acceptance of cryptocurrency payments, by enabling decentralized payment.
Consumers aged in their 20s or 30s may remember that they used to buy a mobile recharging card（prepaid card） rather than a bankcard to top up online games in their childhood. The approach is akin to a large matching network by intelligently correlating refilling demand and game payment demand, bypassing centralized conversion and settlement institutions. This was the earliest decentralized payment system in the world, generating transactions that in the aggregate amounted to billions of yuan per year. LITEX’s co-founder is the former operation director of this product, therefore LITEX also adopts the same business logic, except that the payment tool is a digital currency rather than a mobile recharging card. At the end of the transaction cycle, the merchant will receive payment in a fiat currency, removing the final obstacle to the adoption of digital currencies.
LITEX’s complex decision-making lightning network allows for low-cost and low-latency payment with a digital currency
In terms of technology, LITEX, based on the BOLT protocol, has created its own “complex decision-making lightning network” by combining non-bankcard payment with the Lightning Network. With the upper decision-making network that matches requests for payment and fiat currency conversion and the lower lightning network that serves to establish a secure and efficient payment gateway, LITEX settles accounts with merchants in fiat currency through local acquirers.
The “complex decision-making lightning network” delivers in-depth interaction and shares nodes by integrating a complex decision-making layer network and an implementation-layer lightning network into a single distributed system, enabling a smarter lightning network and advanced routing functionalities, including the matching of conversion and payment requests. It also can maintain an efficient and distributed network topology via the designing of rules and a feedback system, avoiding the occurrence of super large centralized nodes.
The network matches digital currencies with the demand for fiat currency in a smart way via its complex decision-making network before transferring digital currencies via its lightning network. It ensures the same secure payment as those on the blockchain while cleverly supporting rapid Bitcoin payments outside of the blockchain. Each node of the lightning network can serve as a link for rapid, fully automatic and extremely low-cost delivery of transactions, supporting the completion of instant payments even when the transaction amount is every small. With the network, merchants can receive the corresponding amount (excluding fees) in a fiat currency in real time without needing to be concerned about the withdrawal threshold. Furthermore, the network enables buyers to be able to exchange into any digital currency they need for their purchase or any other purpose at a low cost.
To address the third issue regarding digital currency-based payments – the fluctuations in the value of digital currencies – it requires a steady currency anchored to a fiat currency such as the US dollar until such time that digital currencies become universally accepted. Nevertheless, even a digital currency whose value has stabilized in line with a fiat currency may continue to resist acceptance by merchants as they will still need to convert the currency into a fiat one at an exchange or via any institution that can do so. LITEX addresses this concern with a decentralized payment system whereby merchants receive payments in fiat currency, which is no different from how centralized organizations pay in fiat currency today.?0?0?0?2
When it comes to the product strategy and technology implementation, LITEX’s digital currency-based fully decentralized micro payment solution is promising and worth anticipating. As for project planning, the designing of a system infrastructure as well as implementation and testing of fundamental functions under the BOLT protocol commenced in the fourth quarter of 2017 and are still underway. LITEX’s payment app is scheduled to go live in the second quarter of 2018, by which time access for acquirers and service providers will have been tested. The app is expected to be formally launched with full functionality in the first quarter of 2019.
What makes a blockchain project outstanding and sophisticated is not only the support of powerful resources but also a strong team in addition to a practical and feasible approach to its implementation.?0?0?0?2
LITEX’s core team includes experienced professionals in cryptology and business applications, practitioners in the field of payment, and experts in lightning network technology and blockchain. With substantial resources, the team can rapidly establish partnerships with major Chinese acquirers, bypassing centralized organizations including bankcard issuers while avoiding intractable problems that can occur as a result of the termination of cooperation between other digital currency payment products and Visa, including the collapse of the business model and failure of implementation. In addition, LITEX has formed an overseas business partnership with a well-established Chinese payment solutions provider, whereby the company will leverage and share the partner’s star products and resources.
LITEX’s preparations for research and development as well as launch events will be in full swing during 2018. The company is well poised to put in place a sound product strategy and technology implementation capabilities, in addition to its strong team and industry resources, all of which will make final implementation of the project just a matter of time.
More information is available on LITEX’s official website: http://litex.io/