Single Blog

What is COTI and how will it revolutionise the world of digital payments?

Created By : Admin

COTI stands for Currency of The Internet, a project based in Tel-Aviv with the aim to build a decentralised and scalable payment network, allow organizations to create their own payment solutions and digitize any currency to lower fees.

COTI was created to tackle some of the biggest downsides with traditional finance, such as latency, fees and risks. This is achieved by the use of a DAG blockchain, proof-of-trust algorithm, GTS (Global Trust System) and a universal payment solution.

COTI pay can process every type of payment, online or offline. Crypto, stablecoins, native coins and credit cards are all compatible with the platform. It has built-in financing so users can earn interest on deposits and loans.

The online payment industry has an annual transaction volume of over 3 trillion dollars, however, despite the immense amount of progress made with the online payment industry, most if not all online payment solutions have lagged behind tremendously, including both digital currencies and electronic payments. Neither has come up with a suitable solution, as traditional payment systems such as PayPal and Visa are scalable and have fast transaction processing times, however high transaction fees hold them back. Digital currencies have their own advantages and disadvantages too; they can fulfil transactions with increased security and lower fees; however, they face difficulties with scaling, low adoption and extremely volatile prices which can fluctuate drastically in a matter of minutes, making them undesirable to accept as a form of payment.

COTI does not use a blockchain-based database like Bitcoin, but instead uses a DAG (Directed Acrylic Graph), which is known as the cluster. Each transaction in a DAG network must validate two previous transactions in order to be confirmed, leading to the transaction rate increasing proportionally with an increase in volume. The cluster can be broken down into 3 main parts:

Full Nodes — Operate on the Proof-of-Work consensus, and allow new transactions to be attached to the DAG itself.

DSP Nodes — Maintain an updated copy of the cluster at all times to monitor the network and lower the possibility of a double-spend attack taking place on the network.

History Nodes — Store the complete history of the cluster. Full account history can be retrieved, and in the event of a malfunction with the history nodes, the history servers can be used as a fall-back.

Trust scores are determined on a case-by-case basis, based on how active users are, the number of disputes the participant has been involved in, the number of disputes on the network lost by the participant and the rating users receive from other parties. The higher the trust score, the lower the fees, and vice versa. This incentivizes users to gain a high trust score as transaction confirmation times correlate with users trust scores.

While many different digital and fiat currencies can be used within the COTI network, participants are incentivized to use the native COTI token as a means of making payments, due to its extremely low transaction cost. Regardless of the currency used to make payments, COTI tokens can always be used to pay for the network’s fees. Due to the decentralised nature of the project, the COTI token can allow users to vote in any proposals and have their own say in the project.

TL;DR: COTI could quite possibly have a major impact on the online payment industry as it could revolutionise the way we as consumers pay for products, and the way that businesses and organizations run. COTI’s overall aim is to address high transaction charges, scalability and slow transaction speed which plagues traditional finance and other digital currencies, through the use of a DAG based blockchain.