Micropayment platform

From smartlike wiki
Jump to: navigation, search
This page contains changes which are not marked for translation.

Other languages:
English • ‎русский

Short read[edit]

Smartlike employs a blockchain micropayment platform configured to minimize losses by eliminating intermediary groups of interest (miners, investors, exchanges and developers) and distributing trust in exchange operations without bringing yet another crypto-currency to the market. Money flow can be described by the following cycle:

Short1.png
  1. Alice deposits an amount to her favorite creator by an ordinary money transfer.
  2. The creator confirms the receipt on smartlike network by adding funds to Alice's account.
  3. Alice uses the funds to support various creators or pay for goods and services via (micro)transfers on smartlike network.
  4. Go to Step 1 or Step 2 when smartlike becomes popular and Alice herself receives smartlike transfers from her audience, clients or employer.

Longer explanation[edit]

Smartlike addresses money transfer issues primarily relevant to micro-transactions.

Conventional money transfer[edit]

Outdated electronic money transfer
  1. Alice deposits $10 at her bank.
  2. Using a transfer service provided by the bank, e.g. online banking or credit card, Alice requests to transfer $1 to Wikimedia. Bank 1 doesn't wire the money to Wiki's Bank 2 but rather places a record on a private ledger, where they collect all transfers between them and, at the end of the day, just wire the difference. If clients of Bank 1 transfer $1000 in total to Bank 2 and clients of Bank 2 transfer $1000 to Bank 1, there'll be no external money transfers - the banks will adjust accounts of their clients accordingly.


Problems:

  • expensive - commission on micro-transfers makes them impractical;
  • inconvenient - payment services often require work and time to find billing information, type in numbers or wait for two-factor authorization;
  • not private - Alice's bank knows too much about her;

Although crypto-currencies solve some of the issues, they often introduce intermediary groups of interests (miners, investors and exchanges) that do not allow to achieve true lossless micro-transfers. Smartlike removes intermediaries from transfers.

Your favorite creator can be a better bank[edit]

smartlike transfers with distributed trust
  1. Alice deposits/transfers $10 to Wikimedia. Wikimedia places a record on a public ledger, protected by blockchain technology, confirming that Alice has $10 on her account.
  2. Alice places a record on the ledger that she transfers $1 to Wiki.


Profits:

  • commission-free - Alice can choose a free payment method at step 1, e.g. one included in her banking package. Public ledger is implemented on a blochchain, where numerous authors and publishers are incentivized to host lightweight network nodes, capable of running even on smartphone-size hardware.
  • one-click transfers - cryptography makes it possible to make secure micropayments clicking on like-buttons while browsing the Internet.
  • private - Alice has anonymous smartlike account and can change it anytime. No registration or any private data required.
  • efficient - Alice will not spend all her deposit at once. Unlike current account at a bank, where money often lose value in time, Alice's deposit to her favorite author or publisher works immediately - they can use it to buy a new camera and deliver better quality content, for instance.

Risks:

  • Alice's favorite author or publisher might accept the money but refuse to place confirmation record on the ledger. This seems to be unlikely, as they are interested in Alice to make more transfers.
  • What happens if the new system fails? - Alice won't be able to access her account. Her remaining deposit will stay at her favorite author or publisher - no money can be leaked to developers, investors or speculators. In case of doubt, one can choose to make first deposits via charities or NPOs - the lost money would go to cure children or save the ocean in this hypothetical case.

Smartlike micropayment platform[edit]

Smartlike implements true commission-free micropayments with a crypto-currency where the primary function of money, medium of exchange, is strengthened while fitness for derivative uses is traded off.

Methods[edit]

  • The task is simplified by limiting groups of interest to transfer senders and recipients and excluding intermediaries: miners, exchanges, investors and developers.
  • A solution for trust-less/trust-full dilemma in crypto-currencies is implemented by distributing trust.

Fixing crypto leaks and costs[edit]

Zero-commission transactions do not suffice – expenses imposed on users by indirect costs like exchange rate volatility, blockchain maintenance and exchange fees to fiat need to be taken care of:

  1. Processing
    Blockchain maintenance is given to main platform beneficiaries - transfer recipients.
    Smartlike method of achieving distributed consensus is a variant of PoS - PoB, proof-of-benefit, where chances to sign next block depend on current volume of transfers an account receives. Protection against spam and attacks is implemented by temporarily locking a commission on recipient accounts for a period of time depending on the platform load. Blockchain maintenance is rewarded by faster commission unlocking, prioritizing miner's transactions and taking part in emission lottery.
    Network nodes do not require additional resources from maintainers in most cases making processing virtually free where nodes are collocated with web servers.
  2. Investment and speculation
    There are only two groups of interest in smartlike – transfer senders and recipients, both profit from lossless transactions. Their primary incentive is supported by the following rules:
    • The use of crypto-currency is hidden from users - transfer senders. Exchange rate is anchored to a practical fiat currency, USD at start. Users add funds to their accounts via transfer recipient exchange points they trust, arbitrating their behavior trough trust distribution. When transfer recipients register their billing data to add funds to user accounts (exchange fiat to crypto), they commit to 1:1 rate.
    • Transfer recipients who are most interested in increasing money flow velocity control monetary mass by voting on internal crypto emission/absorption rates when signing blocks. Token supply will be continuously aligned with the demand. Consensus outliers are demotivated.
    • For attackers, functions of money that are different from the target one are suppressed. Negative interest rates on saving accounts and other restrictions.
  3. Fees for exchange to fiat currencies
    When users add funds to their accounts, they can choose transfer methods that take minimal or no cuts, e.g. SEPA or transfers within one bank, where commission-free transfers are included in the user banking flat rate.
  4. Developer's business model
    In general, crypto users also pay to developers and their investors, depending on what business model they opt to choose: an ICO, fees or others. Smartlike is designed to be funded from an application built on the open platform, with no technical competitive advantages or restrictions built in.


Initial emission - crowdfunding[edit]

Initial liquidity is distributed among early adopters from the most likely smartlike users - charity donors. Whithin crowdfunding campaign smartlike.org doubles user donations to charities and non-profit organisations made via smartlike (up to $2M). Donations are transferred via PayPal with no cuts from smartlike.org. As soon as PayPal transaction is confirmed, refund money is transferred to user smartlike account, the same amount is emitted to smartlike development and is to be returned to the user via network contract in one year. One can think of this operation as a more secure equivalent to the first warm-up cycle of the system: smartlike sells a token to user, user sends it to charity, charity sells it. An ICO that is:

  • efficient as tokens are distributed among the target users, not investors and speculators,
  • secure as smartlike.org doesn't even touch user money,
  • simple as smartlike.org can hide crypto altogether and use the wording like "add funds to your dollar account on smartlike" when addressing users.

See also[edit]