This up-and-coming cryptocurrency system is making tokens more practical in the retailing space. But the implications are even more profound and extend to geopolitics.
We already live in a world of digital money.
We pay for parking on our smart phones, we check out at Whole Foods with Apple Pay and we send up to $10,000 across borders for free. But in many ways, money is still stuck in the archaic notion of paper currency.
Cryptocurrency is leapfrogging money into the 21st century. One cryptocurrency firm stands out: the appropriately named MoxyOne.
Small tech companies seem to have developed a risky and complicated reputation. The tech boom in the late 1990s and subsequent bust at the turn of the century soured the sector’s allure; investors willing to buy almost any Nasdaq listed stock in 1999 were totally disillusioned just a few years later after the “dot bomb” collapse.
That was then; this is now. Initial Coin Offerings (ICO) are accelerating in numbers and the trend shows no signs of abating. Scores of companies are raising development and operational capital through issuing company specific tokens in return for liquid cryptocurrencies. Think Bitcoin and its second closest competitor, Ethereum.
The total market capitalization of the cryptocurrency market hovers at about $660 billion. That represents amazing growth, when you consider that the forerunner, Bitcoin was founded in 2009, at the nadir of the Great Recession. This exponential appreciation occurred in less than 10 years.
You might wonder how Bitcoin and Ethereum compare with each other. One difference is that Ethereum is more welcoming. The algorithms are somewhat simpler for adding new tokens and for recording transactions. Moreover, Ethereum can accommodate tokens other than ETH.
The trade-off is that Ethereum is less secure than Bitcoin. To really understand why requires expertise in computer science, but the basic explanation is that to successfully add to the blockchain in Ethereum you only have to prove you are part of the Ethereum network.
Adding to the Bitcoin blockchain requires solving a difficult computer problem that is validated by others in the network, a much more demanding task.
But here’s the real crux of the issue that vexes cryptocurrency adherents: only the most liquid and established currencies can be used in real-world transactions. Only a small number of retailers around the world accept Bitcoin, Ethereum and its peers.
True, the number of establishments accepting these tokens is rising, but it’s still a scant minority. The upshot: most of these coins can’t be used for normal consumer transactions. Sure, techno-geeks trade them back and forth for various discrete tasks but cryptocurrency remains an abstraction to most shoppers.
Real Uses in the Real World
A fast-rising company called MoxyOne has the answer to this problem. It’s an answer that neither Bitcoin nor Ethereum can provide.
MoxyOne is on the verge of launching its own ICO. The company will use the funds raised in the offering to develop a secure payment infrastructure via debit card for every company, project, and ICO that issues cryptocurrency tokens.
The company has invented a “digital wallet” and financial transaction system that’s integrated with a mobile device application. This wallet allows users to make payments at millions of points of sale around the world. The company’s token is called SPEND. Combined with the wallet and token, users can execute fast transactions anywhere debit and credit cards are accepted, by using a physical debit card or a mobile device.
MoxyOne’s instant access debit card allows any MoxyOne user to spend tokens held in their wallet as fiat in most countries around the world. Fees are low, transactions fast.
By using the MoxyOne wallet app, users can choose a default among the tokens that they hold. This enables the debit card holder to make purchases with the chosen cryptocurrency and gives the user total flexibility.
The MoxyOne system is unique in the cryptocurrency realm. Let’s break down how it works.
The system entails Just In Time Funding (JITF), a protocol that enables nearly instantaneous conversion of a token to the indigenous fiat currency at the retail point of sale.
Another crucial element is a liquidity provider, the party that buys the tokens from the individual and consequently facilitates the JITF transaction. In return, these liquidity providers receive the full amount of tokens from MoxyOne. As their fee for assisting the transaction, they also receive extra tokens. When the tokens are received, the liquidity provider refunds MoxyOne for the purchase total.
The solution is elegant. When the retail merchant finally receives the funds of the transaction, they are denominated in the fiat of that particular locale. In other words, skeptical retailers needn’t be convinced of the validity of cryptocurrency. They don’t need to acquiesce to receiving digital tokens. The conversion occurs behind the scenes, without their involvement. All they experience is payment in full by the local “real” currency.
The funds are debited from the users account with MoxyOne; the merchant gets paid in the local fiat; and the transaction is recorded on a tightly secure blockchain.
This ingenious system is intended to work with SPEND, but the company is ambitious and has devised a way to spread this technology beyond the confines of its own token. MoxyOne is “white-labeling” the system to allow it to integrate with any other cryptocurrency.
Companies that would rather trade in cryptocurrencies will be able to use the MoxyOne system to enable their users to make digital currency transactions. Any company, project or ICO can white label the MoxyOne system to provide their users with a company issued and “branded” debit card.
Corporate partners that seek to issue their own branded, white-labeled debit card for their token holders can simply do so via the MoxyOne “business dashboard.” Businesses can register with MoxyOne as an organization and begin using the company’s infrastructure and self-serve dashboard to set up secure debit card functionality for their users.
Instead of building an infrastructure from scratch, participating companies can adopt MoxyOne’s application program interfaces (APIs) to integrate their token directly into their own customized debit cards.
This white label capability will fuel faster and wider adoption of cryptocurrency around the world. It should provide a shot of steroids for a technology that’s already on the fast track for growth. As we’ll explain, this technology also has ramifications for the global balance of power. It could decide which nation achieves primacy in the 21st century.
Upending the Monetary System
MoxyOne’s technology is in the vanguard of cryptocurrency and that’s a big deal not just for users but also for geopolitical reasons. You haven’t read much about it in the mainstream press, but cryptocurrency could be on the verge of upending the world monetary system.
Let’s turn to the world’s second-largest economy — China.
China recently banned cryptocurrency trading, including the trading of Bitcoin. Yet the government continues to encourage highly skilled computer professionals to “mine” Bitcoin (which are still traded in other countries). China, with its large pool of skilled programmers and its abundance of cheap energy, carries out 70%-80% of the world’s Bitcoin mining.
This is all very puzzling, on the surface. Let’s dig deeper.
Why would China say “yes” to Bitcoin mining and “no” to Bitcoin trading? Especially since tremendous amounts of energy get consumed in the process? At the current rate, by the end of the decade China will likely be using the equivalent of close to half a million barrels of oil a day simply for Bitcoin and blockchain transactions. That’s a lot of energy for something you don’t approve of.
But China, as always, is looking ahead and seeing the big picture. In encouraging cryptocurrency mining, it could be laying the groundwork to create a blockchain to manage a new digital currency, one that ultimately will take over from the gold-backed yuan. That’s a very big deal.
In 2009, during the global financial crisis, China’s policymakers started to argue against the use of any fiat currency, not just the U.S. dollar, as a reserve currency.
China came up with an alternative, and it’s one that would work out extremely well for China. That alternative: a basket of currencies similar with gold as an additional component.
Keeping track of the constant fluctuations among these currencies and gold, though, would be incredibly complicated. That’s where blockchains come in. These exceptionally complex digital entities almost certainly would be essential to keep the system working. Gold, meanwhile, because of its special role in the basket of currencies, would soar.
And China, with its large stores of gold and its blockchain skills, would end up first among equals. Blockchain development is part and parcel of Red China, Inc.’s plans to supersede the United States as an economic super power. That’s heady stuff.
That’s why China continues to devote enormous resources to blockchain development, the underlying infrastructure of cryptocurrency. MoxyOne is advancing the blockchain industry by creating seamless and secure debit card and payment infrastructure for a wide range of users of cryptocurrency tokens. The company has tapped into one of the biggest trends you can find.
As China is showing the world, blockchains have other uses. They let businesses store encrypted data in a ledger. Blockchains are used in finance, supply chains, and data storage. This gives MoxyOne future prospects in commerce that are only limited by human imagination.
MoxyOne’s endeavors are part of a larger trend that will change the financial world as we know it.