Tag: payments

Bitcoin Then and Now – Has Bitcoin Lived Up to Its Promise?

Bitcoin, FinTech, Firoz Patel, payments, payza

The early months of 2017 have been a very interesting time for Bitcoin. On January 2nd, Bitcoin maintained a value of $1,000 USD for the first time and only 5 months later it set its current record value of over $3,000. For a cryptocurrency that was worth only 25 cents per coin in 2010, this radical rate of growth has kept investors on the edge of their seats.

Soaring values can have their downsides though. Bitcoin is embroiled in a civil war caused by its scaling problem. Both sides know that a “fork” (an update to the code which runs the Bitcoin blockchain) is required for the currency to survive in the long-term, but the debate centers on whether a “hard” or “soft” fork is the optimal solution. A hard fork would split the code to effectively create a new blockchain with an increased block size, which would solve the scaling problem but make the “new” Bitcoin incompatible with the old. The alternative, a “soft fork”, known as Segregated Witness or SegWit, has been proposed as a way to increase the block capacity without splitting the code.

Opponents of SegWit have two concerns. The practical opposition is that the soft fork would not increase transaction speeds significantly enough to maintain Bitcoin’s lead in the cryptocurrency landscape. The philosophical opposition is that SegWit would undermine Bitcoin’s purpose: to be a decentralized alternative to fiat currencies, immune to political influence.

SegWit developer Peter Wuille addressed Bitcoin’s scaling problem by devising a method to “segregate” the transaction signature from the input data: the signatures used to validate transactions can be stored separately from the blockchain, increasing the chain’s capacity to store more data and process transactions more rapidly. The trouble is that this requires the signatures to be overseen by the Bitcoin Foundation, which some see as effectively “centralizing” control of the currency. To many, this stands in diametric opposition to the ideals Bitcoin was founded on – but is that really true?

The Whitepaper

In 2008, a mysterious figure known as Satoshi Nakamoto released a paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System”. In the 9-page whitepaper, the pseudonymous author (or authors) defines the technologies which make the blockchain possible, using an innovative proof-of-work scheme which solved the double spending problem by timestamping transactions into a public ledger on a peer-to-peer network. This allowed, for the first time, a fully automated and decentralized currency and laid the technological foundation for all cryptocurrencies today.

In the introduction to the whitepaper, Nakamoto writes:

“Commerce on the Internet has come to rely almost exclusively on financial institutions serving as trusted third parties to process electronic payments. While the system works well enough for most transactions, it still suffers from the inherent weaknesses of the trust based model. (…) What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party. Transactions that are computationally impractical to reverse would protect sellers from fraud, and routine escrow mechanisms could easily be implemented to protect buyers.”

That is about as political as the paper gets. Nakamoto describes Bitcoin as a technological innovation which simplifies e-commerce transactions and security, without contextualizing it within an anarchic political frame. While in 2008 a lack of faith in fiat currencies was definitely part of the conversation among the early adopters of Bitcoin, the developer(s) of the blockchain chose not to define it in those terms.

If Bitcoin was not intended to stand in explicit opposite to fiat currencies, but was simply envisioned as a more modern and robust payment technology, is SegWit incompatible with its original intention? Technically, SegWit would change the fundamental design of the blockchain by separating the transaction data from the proof-of-work, which means the possessors of the proof-of-work would take on the role of a “trusted third party” – which is exactly what Nakamoto set out to eliminate in the development of Bitcoin.

On the other hand, if SegWit could be implemented in such a way that the proof-of-work is also a fully automated chain, operating in parallel to the blockchain and communicating with it, this would theoretically achieve the same results as the whitepaper envision, but with an updated design.

A Hard Fork

The alternative, the “hard fork”, would retain the fundamental design as laid out in the 2008 paper, with the only difference being to increase the capacity of the individual blocks in the chain. Currently, these 10-minute blocks are limited to a maximum size of 1MB, but Bitcoin has become so popular that it can no longer process all the transactions made within any given 10-minute period, creating a backlog.

The existence of this problem suggests that Nakamoto never dreamed Bitcoin would become so popular, but many investors believe this is still only the beginning. So far this year, the price of 1 BTC has already tripled and some analysts have gone so far as to make value estimates as high as $55,000 USD per coin by 2022. On paper, Bitcoin’s technology is ingenious, but can a truly decentralized currency really handle this level of popularity?

The debate over the hard or soft fork has made Bitcoin highly volatile in recent months, with optimistic investors doubling down on their stock and the more wary exchanging their Bitcoin for other altcoins such as Ether. And it’s no secret that when the inevitable fork happens the coin’s value will drop significantly in the short term as the new chain is tested and the old is abandoned, which raises a different perspective on whether Bitcoin has lived up to its promise. Bitcoin’s popularity is often credited to its position as an alternative to fiat currencies, which have lost trust due to the high level of geopolitical turmoil during the last decade. But if Bitcoin after almost 10 years still shows no sign of stability comparable to fiat currencies, can it really be considered more secure?

Payza is closely following the development of Bitcoin and altcoins and is committed to providing practical and innovative cryptocurrency services. Using our platform, you can buy, store, and sell Bitcoin and sell over 50 different altcoins right inside your account. For the latest updates and industry insights about Bitcoin and cryptocurrencies, be sure to subscribe to our blog and follow us on Twitter and Facebook.

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A Challenger Appears: Ethereum Approaches Bitcoin Market Capitalization

Bitcoin, E-Commerce, FinTech, Firoz Patel, payments, payza

At the start of 2017, the global cryptocurrency market cap, that is, the total value of all cryptocurrencies like Bitcoin and Litecoin, was just under $18 billion USD. This was already a very promising increase from just $7.1 billion the year before. Compared to what was about to come however, even that increase seems minuscule. As of mid-June 2017, cryptocurrencies have reached a global market cap of just over $115 billion. That’s a 533% increase in less than half a year!

Payza has been keeping a close eye on the exciting new cryptocurrency trends, and in 2014, became one of the first e-wallets to allow its members to load and withdraw from their accounts using Bitcoin.

Until a few months ago, Bitcoin’s dominance, or the percentage of Bitcoin’s total value compared to the total combined cryptocurrency value, held steadily between 80% and 90%. Since March, however, there has been a tremendous rise in both awareness and value of Bitcoin alternatives, dubbed Altcoins. As a result, Bitcoin’s dominance has dropped significantly, making up just under 40% of total cryptocurrency value as of mid-June.

Trailing closely at 31% of the total cryptocurrency market cap, a challenger seems eager to take Bitcoin’s throne: Ether.

Ether

Built on the Ethereum computing platform, Ether (ETH) was released in May 2015 and has since gathered strong support from developers and investors alike, despite a hard fork in 2016 that prompted the creation of the Ethereum Classic (ETC). Following the success of the network and a growing market capitalization, multiple ventures are aiming to use Ethereum for projects related to finance, energy sourcing and pricing, sports betting, the internet-of-things, etc.

With an adoption rate that rivals that of Bitcoin, both experts and enthusiasts are becoming reluctant to use the term ‘altcoin’ when referring to Ether. There’s even speculation within the community that Ether will soon overtake the current leader, an event humorously named “The Flippening.”

The Enterprise Ethereum Alliance

With partners from multiple Fortune 500 companies (Microsoft, J.P. Morgan, Intel, etc.), research groups and blockchain startups, the nonprofit organization Enterprise Ethereum Alliance was established in March 2017 with a vision: to augment the Ethereum blockchain by creating a private version (currently known as EnEth 1.0), based on a reference architecture focusing on confidentiality, privacy, scalability and security. It will facilitate collaboration, as everything created will be open-source, making the EEA evolve alongside the public Ethereum community in harmony.

A Surge of ICOs

Part of the extraordinary increase in cryptocurrency value during the second quarter of 2017 is attributed to growing cryptocurrency awareness, the creation of the Enterprise Ethereum Alliance, but also to a multiplication of successful Initial Coin Offerings (ICOs), crowdfunding campaigns dedicated to projects that build upon the Blockchain to provide solutions to existing problems or to future-proof the technology. Among the top ten crowdfunding projects, six are cryptocurrency-related, all based on the Ethereum blockchain: Bancor, the DAO, AEternity, MobileGo, Basic Attention Token and Aragon.

These projects, which have raised just over $477m, show tremendous support for the Ethereum blockchain, which was itself crowdfunded in September 2014 for $18m, a figure that pales in comparison of recent investments.

Altcoins and Payza

Payza has kept a watchful eye over all cryptocurrency developments, not just developments related to Bitcoin. As such, we’ve already started exploring and developing new ways to incorporate Ether and other Altcoins into our global online payment platform.

As cryptocurrency and blockchain technology advances, it is becoming increasingly clear that these currencies will make up a meaningful part of the global e-commerce ecosystem. The only questions that remain are which coins will emerge as the market leaders, and how much of global e-commerce volume will cryptocurrency payments make up?

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Beyond Bitcoin – Cryptocurrencies and Altcoins to Watch in 2017

Bitcoin, E-Commerce, FinTech, Firoz Patel, payments, payza

It’s telling that one of the most popular colloquial terms for a cryptocurrency is “altcoin”, a portmanteau of “alternative” and “bitcoin”. Bitcoin, the original cryptocurrency, has become so ubiquitous that it is the definition of its own category. But the future of Bitcoin is currently in question and, because of this uncertainty, many traders are switching to other cryptocurrencies.

On March 10, Bitcoin hit an all-time high trading value of $1,325 as investors banked on a US proposal for a bitcoin-backed exchange-traded fund (ETF). However, the proposal was rejected by US authorities, which happened to coincide with a crackdown on bitcoin exchanges by Chinese regulators. Together, these two events caused Bitcoin’s value to drop by over $300.

The root of the problem putting the future of Bitcoin in question is scaling: Bitcoin is becoming too popular for its own infrastructure. The number of Bitcoin transactions that can take place at any given time is limited, which is causing a backlog of transactions in queue for processing, slowing down the whole system. This is because of the limited computing power of the blockchain, a distributed database that records all transactions and serves as a public ledger. In some cases, the backlog becomes so great that some Bitcoin transactions are not confirmed for hours or even days, and in some cases, the bitcoins being sent never reach their intended destination.

The Rise of Cryptocurrencies

Blockchains, invented in 2009 by the anonymous developer of Bitcoin, would prove to be a core technology of all cryptocurrencies. Blockchains are the key software that allows digital currencies to break the double spending problem by timestamping transactions into a public ledger on a peer-to-peer network. Without this solution, double spending represented a flaw in which the same digital token can be spent twice, rendering it useless as a currency. This technology allowed bitcoin and other digital currencies to be decentralized.

Cryptocurrencies are a subset of digital currencies, distinct in that they are decentralized: they are not tied to any real-world assets, not backed by any government or central bank, and no one is required to accept them as valid forms of payment or exchange them for any real-world currencies. Nonetheless, Bitcoin became so successful that it is now accepted by major companies such as Microsoft and Dell. You can even use Bitcoin at some brick-and-mortar stores and coffee shops around the world. In fact, there’s a coffee shop in Prague that only accepts payment by Bitcoin!

Naturally, Bitcoin’s success inspired imitation. Many copycat coins failed, but those that refined and built upon Bitcoin’s model attracted investors looking to capitalize on the technological innovation promised by these new altcoins. While some digital currencies like Litecoin and Dogecoin may have already hit their high water mark, there are still lots of intriguing cryptocurrencies that have something new to offer.

Here are the up-and-coming Bitcoin alternatives to keep an eye on in 2017.

Today’s Top Altcoins
Ether (founded 2015)

Shortly after Bitcoin’s crash in mid-March, Ether, the cryptocurrency that powers the Ethereum network, reached an all-time high trading value, surpassing $55 on March 16. Ethereum is an interesting case, as 2016 saw its value rise and fall erratically due to the same scaling problem Bitcoin is currently facing. To solve it, Ethereum split their blockchain into two parallel streams, a solution bitcoin has sought to avoid.

Known as Ethereum and Etherium Classic, these two cryptocurrencies both trade in Ethers, but they can have two different values depending on which stream they belong to, which can rise and fall independently of each other. Microsoft, the Royal Bank of Scotland, and J.P. Morgan Chase are all investing in proprietary software built on top of the Ethereum blockchain, lending credence to Ether’s reputation as a preferred network for digital software applications.

Zcash (founded 2016)
Zcash is one of the highest-valued cryprocurrencies today, currently trading around the $65 mark. The success of Zcash in what is now a very competitive landscape is due to its revolutionary, totally anonymous blockchain. The public ledger reveals no information about the parties involved or the amounts transacted; no other cryptocurrency provides complete privacy and anonymity.

Dash (founded 2014)
The third most valuable cryptocurrency by market capitalization behind Bitcoin and Ethereum, Dash hit an all-time high of $108.32 on March 20. This is a huge leap in value from its 2016 peak of $14.42.
After two different name changes, it appears Dash has finally taken off, driven by its proprietary InstantSend technology that allows transactions to be verified without the longer confirmation times of Bitcoin and other altcoins.

Monero (founded 2014)
From the beginning, Monero set itself apart from other cryptocurrencies in a way that is proving very important: scalability. Unlike Bitcoin and most altcoins, Monero has no hard-coded limit on its block size, meaning that it will never face the slowdowns that provoked Ether to split its blockchain and that are causing Bitcoin’s current existential crisis.

This scalability is key because the popularity of cryptocurrencies has now reached epic proportions. Bitcoin’s inability to handle its own popularity has led one of its key developers, Mike Hearn, to state that bitcoin is a failure as more altcoins rush in to take its place.

Nothing is certain in this crowded, complex market, and cryptocurrencies should still be seen as experimental and high risk in terms of an investment, but their potential power within the digital economy cannot be understated. More and more people are investing their real-world money in Bitcoin and altcoins, while businesses of all sizes have begun to accept cryptocurrencies in exchange for goods and services both online and in-store. If you’re curious about digital currency, now might be the time to start trading, and it’s still possible to find coins that have not reached their full potential yet and still have room to rise in value.

We’ve only skimmed the surface of the history, complexity, and capability of cryprocurrencies, but this is a subject we at Payza will be following closely in 2017. Subscribe to the Payza Blog to get email notifications about more in-depth articles about this and other FinTech disruptors, and follow us on Twitter and Facebook for even more e-commerce news from around the web.

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Payza Wins Best Online Payment Method at the MPE 2017 Awards

award, FinTech, Firoz Patel, mpe award, payments, payza

2017 has only just begun and it’s already an exciting year for Payza. Wednesday night at the Merchant Payments Ecosystem Conference in Berlin, Payza was announced as the winner of the MPE 2017 Online Payment Method Award.

“2016 was a banner year for Payza,” said Firoz Patel, global executive vice president of Payza, who accepted the award on the company’s behalf. “The United Kingdom, for instance, saw over 150% year-over-year growth in terms of new merchant accounts. Overall, Payza saw 50% YOY growth in business signups and 225% growth in merchant payment volume. To be recognized as the best online payment method from among Europe’s leading providers is a credit to Payza’s continuing effort of providing local payment options to our users in Europe and across the globe.”

The MPE Awards, which celebrate and honor the achievements of companies and personalities across the European merchant payments ecosystem, selected Payza as the Online Payment Method Award winner based on its built-in fraud protection and state-of-the-art unique account security features, such as tokenized dynamic payment buttons, custom avatars and greeting messages, and Password and PIN protection; its flexible payment options, such as recurring subscription and split payments for marketplaces; and its hassle free integration that provides European merchants the choice to set their payment preferences based on the countries to which they are selling.

In addition to winning the Online Payment Method Award, Payza was also shortlisted for the Data Information Award, which recognizes achievements in using big data to improve the customer experience, decrease fraud, and increase profitability.

“Winning this award wouldn’t have been possible without the combined contributions of each and every Payza employee,” continued Patel. “From our amazing customer support staff, and our dedicated IT team and software engineers, to our merchant account managers, and our banking, fraud prevention, and account security teams, this achievement was the culmination of a full company effort.”

Payza’s staff has been growing rapidly to keep up with the increasing demand for the company’s services. That demand is a testament to the company’s focus on providing specialized local payment solutions for unique markets while offering an online platform where consumers and businesses in both developed and developing economies can participate.

With new offerings targeted at some of the fastest growing e-commerce markets in the world, including India, Brazil, and Bangladesh, Payza is poised for yet another breakout year.

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Disappearing Banknotes in India: Understanding the Terms Surrounding Digital Payments

Corporate Culture, E-Commerce, FinTech, Firoz Patel, Personal Finance News

Don’t know what are UPI, NPCI, IMPS, NEFT, or RTGS? Don’t worry, we can help!

The people of India are still adapting to the sudden demonetization of the 500 and 1000 rupee banknotes. Emerging from what experts have described as a “debacle” and utter “fiasco” in monetary policy, many Indians are frustrated by media reports that offer confusing information about India’s financial system.
To help bring some clarity to the situation, we wanted to go over some of the unclear terms in finance and digital payments that are common in media reports about demonetization.

What is UPI?

Unified Payments Interface (UPI) is a digital payment system network. Using an app on a smartphone, the UPI enables citizens to transfer money between bank accounts of 19 major Indian banks. In addition to simplifying and increasing access to many basic banking services, the UPI app lets a customer to transfer funds to the bank account of a merchant to make payments without the need to share private financial information.

The National Payments Corporation of India along with The Reserve Bank of India developed the app to encourage Indians to replace cash transactions with digital payments.

For more information, see this article about UPI and the related app in The Hindu: What is Unified Payment Interface?

What is IMPS?

Immediate Payment Service (IMPS) is a digital payment system network. IMPS enables the instant, digital transfer of funds between major banks.

Like the UPI, the IMPS platform makes it easy to digitally transfer funds between banks using mobile phones. Using this service, citizens can transfer funds whenever they please, even during off-hours and bank holidays.
The IMPS platform is managed by the National Payments Corporation of India and operates using the National Financial Switch network.

What is NEFT?

National Electronic Funds Transfer (NEFT) is the most extensive banking network in India to transfer funds digitally. This network provides a simple and cost-effective means to transfer funds throughout India and is popular for settling retail remittances. This banking service is available during business hours and closes for bank holidays.

What is NPCI?

National Payments Corporation of India (NPCI) is a non-profit organization that oversees all retail payment systems in India. The organization aims to offer all Indian citizens unrestricted access to digital payment services. Endorsed by the Reserve Bank of India, the NPCI is a leader in advancing India’s “cashless society” initiative.

What is RTGS?

Real-time gross settlement (RTGS) is a money transfer system within a country that enables the transfer of a high volume of funds between banks. Finance companies use this system to transfer money or securities instantly, where the funds are sent individually rather than bundles or batches that are mixed with other securities. The RTGS provides essential financial infrastructure for a country’s Central Bank and monetary system.

Do you know of other banking and finance terms we should add to our list? Would you like for us to explain the details of a digital payment system? Tell us in the comments section below.

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Increasing your SEO Score for More Online Visibility

E-Commerce, FinTech, Firoz Patel, Personal Finance News

Here we provide a strategy to ensure your customers will find
your online business when conducting internet searches.

Search Engine Optimization (SEO), a fundamental component of website building and digital marketing, has been around long enough that we in the business already look back fondly at the “good old days” of SEO. Once upon a time, getting your website to rank was as simple as cramming enough keywords into a page, a practice that now has the opposite effect. These days, SEO is a complex set of best practices that is constantly being changed and updated, so keeping your website optimized can be a full-time job.

Before we go any further, to understand SEO we need to understand how search engines work. Basically, Google, Bing, etc. send robots all around the internet that “crawl” every website they can find. They pull all the data from these sites and, using a very large set of complex algorithms, attempt to identify which ones have the most valuable information for their users.

For example, when you type “e-commerce” into Google, it attempts to sort the search results in order of what you are most likely to find useful. The problem with this is that robots are not that good at deciding what is and isn’t useful to humans.

The practice of search engine optimization then is to find ways to tell those robots that your website is the one people are looking for. But this comes with a problem as well, which is that even poor or spam websites can still have good SEO, and so Google, etc. have to constantly improve their algorithms in order to filter out the sites that are trying to “trick” them into thinking they’re useful and return only the best possible results for their users.

So as search engines get smarter, SEO practices have to get more sophisticated. Let’s have a look at some of the key elements of SEO and how you can use them to increase your online visibility.

Terms you need to know

Keywords: Keywords are the terms or phrases browsers are searching for. Search engines catalog the keywords you’ve incorporated in your website and use them to rank your site appropriately in their results pages.
In-bound and out-bound links: Search engines consider how many other websites link to yours, as well as which websites you link to, to measure the legitimacy of your site. The quality of the in-bound and out-bound links will also influence your score.
UX: User experience is a broad category of its own which includes ease-of-use, intuitive navigation and quick loading times. Search engines consider how pleasurable it is to use a website when ranking them in their results pages.
Bounces: When someone clicks through to a site only to discover that it is not what they were looking for, they will hit “Back” to return to the results page. This is called a “bounce” and it signals to search engines that your site is not what visitors are looking for, so they will rank it lower in future search results.

Tips to get you on track

Don’t Get Comfortable

If you haven’t updated your SEO practices in the last year they’re at least partly out of date, but there’s another reason why you need to be constantly tweaking and maintaining your website. Search engines rank websites lower if they appear stagnant – if the content of your website is updated infrequently, it may do damage to your SEO score.

Understand Your Audience

The main function of SEO is to leverage keywords. By modifying the structure and content of your website, you can incorporate keywords that are relevant to your products and that your target market is using to search for similar products on the web. However, it’s important to focus on target keywords very specific to your potential audience. Popular search terms are a double-edged sword – avoid common keywords unless they’re definitely favored by your specific audience, otherwise you risk a high bounce rate.

Use Analytics

Analytics can help you keep it fresh. By keeping a watchful eye on your website analytics you can identify which of your SEO campaigns are performing well and how to deploy your resources most effectively. Pay attention to your bounce rates, paid vs. organic traffic, brand vs. non-brand keyword performance, and long-tail vs. short-tail traffic.Search engines also use analytics to identify the legitimacy of a website. If you can increase the average time your visitors spend on your website, search engines will see that as a vote of confidence that your website is indeed useful to their users.

Optimize Your Site

There are a few ways to optimize your site:

Pages more than three levels deep into your website are rarely going to be seen by a human being, so keep all the important information close to the surface. If users have to click more than twice from your homepage to get to the information they’re looking for, most of the time they will go looking for it somewhere else.
Trimming unnecessary pages from your site and eliminating duplicate content can increase your score since both of those are interpreted by search engines as spam.
Search engines consider loading times and broken links when ranking sites, so make sure your site is running smoothly at all times.

Leverage Marketing and Social Media

Good customer service never goes out of style – it’s even more important to the overall success of your business than SEO. In the age of social media, a bad review can spread like wildfire and severely impact your ability to reach new customers. Social media is a boon to SEO practitioners for its utility in link building, user-generated content and reputation management. Signals from social media, including the number of followers, community engagement and content sharing tells search engines that your brand and website are valuable to their users.
More traditional forms of marketing can be effective as well, such as email marketing, maintaining a local physical presence, and getting your business reviewed by popular blogs and news outlets.

We are far from the age of “If you build it they will come”, especially not in the crowded and competitive online retail industry. Search engine optimization is the key to standing out in this market –9 out of 10 consumers use search engines to make purchasing decisions, and SEO is the way to compete for their attention. If you have any further questions about implementing good SEO practices for your website, leave a comment below, and keep visiting the Payza Blog for more tips and tricks to help you get the most out of your e-commerce business.

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