Since the rise of Bitcoin, the mass adoption for the financial services based on cryptography rose exponentially over the past few years. As a result, more and more cryptocurrencies are being born to offer diversified financial services in a decentralized way.
The virtual currency market has been experiencing a rapid growth which already constitutes a large portion of the world’s economy. Traditional businesses cannot ignore this so-called "future of financial industry" anymore, which caused such traditional businesses to integrate the blockchain technology into their systems.
In few years, we can expect that almost all transactions will be done in a cashless and decentralized way. Thus, online payments related to cryptocurrencies will increase even more like we’ve never seen before.
Problems in Acquiring Cryptocurrencies
At this point, the virtual world is greatly relying to different Cryptocurrency exchanges for doing fiat conversion in exchange for cryptos. However, since cryptocurrency exchange platforms aren’t required to obtain service licenses, exchanges are deemed to be unsecured and seem to be vulnerable to hacking attacks.
Navigating crypto exchanges can also be complex and complicated for some people especially those who are new with the idea of blockchain technology. Such crypto exchanges also serve as centralized entities which have high chances of abusing its participants in return for high profits.
For this reason, P2P exchanges or peer-to-peer exchange of cryptocurrencies to fiat money (and vice versa) have surfaced to eliminate intermediaries and to bridge the traditional and virtual finance sectors in a fast and efficient manner.
Since P2P transactions eliminate centralized entities or third parties’ intervention, buying and selling of crypto-based tokens are directly executed in between the concerned parties.
Still, current P2P exchanges such as Localbitcoins, Changelly, and QVolta are being bounded by their own limitations, making P2P exchange even more complicated to realize.
Streamity: Giving Birth to a Powerful P2P Cryptocurrency Exchange Platform
Streamity, a promising crypto-based project, is the first ever initiative to create a decentralized platform called Streamdesk in order to trade cryptocurrencies for any fiat currency with the use of smart contracts.
Among all P2P exchanges present at the moment, Streamdesk is the first to integrate smart contracts to ensure that all the transactions will be done in a secure and automated way. This makes Streamity a "Trustless" system – a system that does not require trust from any parties involved as transactions will be done in a higly-secured manner with the help of the system’s algorithms.
What is a Trustless System?
To better understand what a Trustless System really is, take banks for example. We entrust our huge savings and other monetary transactions to banks since we believe such financial institutions adhere to certain standards, leaving us with confidence that our money is stored in a safe place. Thus, the bank requires “trust” from its customers.
Though banks are good instruments to execute financial transactions, opening a bank account and having to maintain huge maintaining balance can be painful for some, not to mention the unreasonable return of interests for letting the bank use your money at their own discretion.
For this reason, "trustless systems" which are based on blockchain technology are being created to provide financial services to everyone without undergoing the same painful financial procedures banks require.
The two parties that are not trusting each other can still execute transactions while having the guarantee to receive the desired amount based on agreement. This can be made possible by integrating “trustless” mechanisms in the system.
Now, how will the Streamity Project ensure “trustless” financial transactions?
All of the transactions will occur in Streamdesk, Streamity project’s very own P2P Cryptocurrency exchange platform. The security of financial transactions will be ensured through issuing smart contracts in every trades that will happen within the platform without relying on any intermediaries.
How exactly does a smart contract work then?
Once two parties (buyer and seller) agrees to trade a certain cryptocurrency token to fiat currency in a specific amount, a smart contract will be stipulated along with the predetermined payment systems.
A smart contract will serve as Streamdesk’s locking feature that will signal the payment system to release the funds. This way, Streamdesk will unite and protect its users from any bogus attempts.
Streamity WhitePaper, Page 24
The smart contract can only be unlocked or triggered once both parties have sent their dues as specified in the contract. Otherwise, payments will be sent back to the concerned party if the other party fails to fulfill his obligations within the allowable transaction time, thus automatically cancelling the trade.
Escrow vs Smart contracts
Currently, other P2P crypto exchanges like Localbitcoins are using escrow system which cannot guarantee the security of transactions unlike using smart contracts. In an escrow system, payments will be held by an escrow agent, a third-party entity, which will notify the seller if the buyer’s payment is verified.
However, both parties should bear in mind that there are still some risks present in escrow services. First, escrow services are third party contractors, whose credibility should be assessed just like how we assess a bank’s reputation.
Second, the escrow service will only release the funds if the other concerning party will authorize the transaction. Simply, escrow waives itself from any obligations should there be an erroneous payment happened since it cannot verify whether the fiat transfer from the buyer to the seller really did happen, making an escrow absolutely useless.
On the other hand, in using smart contracts as a security mechanism, one can ensure that the level of security is at the optimum level. Smart contracts are automated and self-executing systems which automatically execute the payment transactions as soon as the agreement between both parties, which are written into codes, are met.
In using smart contracts, the transactions will be directly in between the buyer and the seller, eliminating the need for any intermediaries. This is a perfect example of a trustless and decentralized way of executing P2P crypto transactions.
In Streamdesk, smart contracts are being integrated with API of payment system which will enable the Streamdesk platform’s program to verify the buyer’s fiat transfer. Only after this, the cryptos will be unblocked by the smart contract in order to execute the deal.
Other problems concerning the existing P2P Crypto Exchange Platforms
As what I’ve mentioned at the first part of this article, there are existing P2P exchange platforms already, namely Localbitcoins, Changelly, and QVolta. But let me just focus on the first two exchanges since QVolta is still on its test mode.
I actually did my own research regarding these platforms and was quite surprised to know that bogus buying is still rampant regardless the security these platform offers.
The following are the disadvantages I gathered regarding the said P2P exchanges:
LocalBitcoins. This P2P exchange site only supports bitcoin in exchange to various fiat currencies. Exchange rates are also set by the users of this platform, therefore, there is a great tendency of overpricing compared to the actual average price of bitcoin in different exchanges.
Localbitcoins also uses escrow services, making transactions unsecured. In fact, I have gathered some evidences about how this platform is being attacked by bogus attempts on their forums.
There are still countless scam and fraud reviews on their site's forums, which makes Localbitcoins a very risky site to entrust your bitcoin to fiat transactions.
Changelly. Unlike Localbitcoins, Changelly accommodates other major cryptocurrencies. However, Changelly only accepts USD and EUR for buying major cryptos (BTC, ETH, BCH), but does not allow any conversion of cryptocurrency for fiat money.
Furthermore, Changelly is being widely reviewed for issuing a lot more expensive transaction fees than what it promised. This caused users to lose trust in their system. Aside from being not transparent with the transaction fees, the security of the deal is only guaranteed by the team, which is also a great risk to take.
How Does Streamdesk differs from these P2P Cryptocurrency Exchanges?
Streamdesk Website
With Streamdesk, one can expect for much lesser transaction fees since there is no need to pay for costly escrow services. Through integrating smart contract architecture and API of payment systems, there is a guarantee for a secured and fast execution of deals.
One can also assure that the prices of cryptocurrencies being offered for trade-offs are based on the average of the crypto exchanges current prices, minimizing the probability of overpricing.
With the widely available fiat currency and payment options, Streamdesk will surely give people the ability to use fiat to acquire cryptocurrencies in a wide-scale manner while eliminating the barriers between the traditional and the virtual worlds of finances.
Streamdesk also offers great advantages more than what the existing P2P exchanges can offer. It will have its own STM tokens which will be used for internal payment for crypto to fiat services within the platform. STM tokens will also be traded openly on main cryptocurrency exchange markets, allowing greater exposure to the virtual world.
Since Streamdesk is a mass service for P2P transactions, the increase in the number of transactions within its platform would also mean an increase in its demand. As a result, STM tokens may rise in value, giving its users more opportunity to earn.
The Streamity Project as a whole is a very promising initiative based on blockchain technology. It does not only focus on creating a secured and P2P exchange platform, but also on establishing an educational program that could provide knowledge about Cryptocurrency. This widely available information will be free of charge which will include news, analysis, educational, and investment resources -- which could greatly help the mass adoption of Cryptocurrency as a whole.
Image and GIF Sources: 1, 2, 3, 4, 5, 6
Disclaimer: This is not a financial advice. Readers are encouraged to conduct their own research with due diligence into the company, product or service mentioned in the content above.
More Information and Resources about Streamity Project:
Streamity Website
Streamity OnePager
Streamity WhitePaper
Streamity YouTube
Streamity Facebook
Streamity Medium
Streamity Twitter
Streamity Telegram
Streamity BitcoinTalk
This is an official entry for @originalworks' Writing Contest
Posted from my blog with SteemPress : https://pinayteenvestor.com/2018/06/25/streamity/
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dumadami na ng dumadami ang mga medium of services ah..
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