Using Blockchain to build payment applications for mass adoption, free from volatility

Right from Bitcoin, the vision of most of the blockchains have been to enable peer-to-peer payments without going through a financial institution. Since then there is this mad race where every business launching an ICO is trying to make its cryptocurrency transactional and achieve mass adoption.

However, as I mentioned in my last article, every business thinks that they are advancing the blockchain for masses by either inventing new “utility tokens” that power their platform, app or game; or coming up with new methods for the famous tokens to be spent more easily.

But in my view, to build a blockchain application that works with the masses, it needs to solve these four fundamental problems:


The everyday shopper does neither has the time, nor has the care about the cryptocurrency market. All they see, hear or read are the tantalizing click bait news on the mainstream media on “How Bitcoin price plunged 30% in 3 days” or “How this man bought his $3M house with Bitcoins”

This creates a general distrust when it comes to using cryptocurrencies for everyday purchases, and people tend to HODL (hold) these tokens more like assets.

Now I understand the irony here. As an ICO, while you want people to use your tokens as currency, you also (secretly) wish that the value of your token (w.r.t fiat) continues to appreciate.

While there is no one way about it, we had the same problem while thinking about our payment platform and ICO. And what we came up with is a two asset model leveraging the Stellar blockchain infrastucture. Essentially what we did is

  1. Created an internal “credit” token that records the value equivalent to the fiat a user deposits with us. (Something like how gift-cards or iTunes credit work). This allowed us to store the fiat value in a fixed value cryptocurrency.
  2. Created our ICO token. This token is intended to be the “protocol or utility token” which the payment network accepts.
  3. When a payment is to be made, we manage the “just in time conversion” from the credit token to the ICO token. Since the conversion happens from a crypto to crypto, it is free (thanks Stellar Distributed Exchange), and instant (e.g how you pay with debit card)

If it sounds a bit confusing, please check my detailed article Our approach to solve the Cryptocurrency Volatility problem

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