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What is Plutus?
Plutus is a mobile application for making contactless Bitcoin payments at any merchant with an NFC-enabled checkout terminal. The purpose of Plutus is primarily to incentivize and enable practical day-to-day usage of bitcoin and indirectly accelerate adoption.
How does the payment process work?
You send Bitcoin or Plutons to an address displayed on the Plutus app.
The coins are forwarded automatically to verified traders on the PlutusDEX in exchange for an offer in USD, EUR, etc.
The smart contact (DEX) running on the Ethereum platform recognizes that the traders have received your bitcoins, and their equivalent fiat deposit, which is in escrow is released to your Plutus virtual debit card balance automatically.
You can now use your Plutus balance to pay at any NFC-enabled POS terminal in the world.
The Plutus.it App — Payment Process and Bitcoin to NFC Field Test
The Plutus.it App — Payment Process and Bitcoin to NFC Field Test
How is the merchant paid at the end of the process?
The merchant always receives payment in their preferred currency through the international debit card payment system. If you would like to learn more then please download our recently published White Paper, which outlines the technical specifications of our platform.
What problem does Plutus solve?
If you hold any bitcoin, you are definitely aware of how difficult it is to spend them, especially if you are trying to pay at a local brick & mortar shop.
Coincidentally, this opportunity is what makes Plutus an optimal use case and killer app for miners, entrepreneurs, freelancers and anyone else who earns from the crypto economy. With Plutus, you no longer have to wait for merchants to accept Bitcoin. You simply show up, and pay.
(Best of all, Plutus supports major fiat currencies, which means that you can also shop while travelling without the international currency exchange fee.)
What makes Plutus better than other Bitcoin payment solutions?
Plutus.it follows the philosophy of Bitcoin by connecting you with traders through a peer-to-peer network. By using its built-in decentralised exchange, Plutus removes the need for middlemen and reliance on third-party exchanges, which have widely varying levels of security and uptime.
To clarify why this is important, you can take a look at the following article:
Blockchain’s Disintermediation of Payment Processors in Fintech
The bitcoin blockchain has recently emerged as a powerful tool for disintermediation that despite interest from major…
medium.com
Furthermore, Plutus removes the need for issuance fees and snail mail delivery of the actual debit card itself. Simply download the app and you will receive a virtual debit token secured within the app itself.
How can I pay with Bitcoin?
Plutus is as simple as possible, and extremely convenient. Simply download the app and make a small deposit, then tap & pay at your merchant of choice. No need to wait for a physical card to arrive in the post, and no issuance fee.
I would like to see it in action.
How does Plutus and the decentralised exchange network work behind the scenes?
The PlutusDEX matches orders of both bitcoin/pluton buyers and app users. Because all transactions are stored on the Ethereum and Bitcoin blockchains, the records are immutable and publically accessible. Once the transaction of bitcoin deposit by the app user has been verified, the PlutusDEX smart contract signals the release of fiat funds from user’s (trader) escrow and confirms the new contactless balance of the Plutus app user.
You can find out how Plutus works on our official How It Works page
How does the escrow work when buying Bitcoins and Plutons from app users via the PlutusDEX?
You register on the platform and verify your account. Once verified, you may transfer fiat currency to an escrowed Plutus bank account, which is the only necessary centralised aspect of the PlutusDEX. Your deposit will be escrowed before the order is matched and filled, which guarantees that the app user’s bitcoin and pluton deposits are filled immediately via the decentralised exchange.
Before you can place an order, however, you must also assign a bitcoin payout address. The payout address can be any valid bitcoin address of your choice. For optimal security, we recommend using offline wallets, and not reusing any addresses. Once you have completed these steps, you will be able to create a buy order by setting your best price and stop limits.
More information is available in our previous post on the PlutusDEX.
What is the PlutusDEX and why is it the most important part of our platform?
“The PlutusDEX fuels the liquidity and decentralised exchange of digital assets such as Bitcoin or Pluton.”
Do I have to wait for bitcoin transactions to confirm while paying at the merchant? Or is there an easier way to make deposits on the app?
Because of the time required for confirmation on the Bitcoin network we always recommend to send Bitcoin deposits prior to your visit to the store. However, we have introduced Plutons, which are Ethereum tokens that can be used on the app the same way as Bitcoin with the added benefits of instant payments and zero fees. This means that if you use Plutons, you will only have to wait less than a second.
More information is available in our previous post about Plutons and the built-in decentralised rebate system:
Pluton — Ethereum Powered Rebate System for Every Day Purchases with Bitcoin
What are Plutons and how do I get them?
Plutons are digital tokens held in a rebate pool and governed by an Ethereum smart contract. They are automatically awarded to the user as a rebate for using the Plutus app or by becoming a founding member and joining our crowdsale. Plutons can be spent in any NFC-enabled store in the same way as bitcoins.
The key benefits of Plutons are zero fees, free conversions to a contactless payment balance, and a 3% rebate in plutons for every bitcoin deposit you make. Pluton transactions confirm instantly on the blockchain, a sharp contrast when compared to those on the bitcoin network which require 10 minutes to an hour or more.
Plutons are designed to be the first actual crypto token with an everyday use-case — paying for purchases using NFC technology with the added convenience of instant conversions and zero fees.
Plutons are transferable fungibles — they can be sent to another account registered within the Plutus app or convert them via DEX to contactless balance towards in-store purchases.
Is the PlutusDEX created from the ground up and will it open-source?
Plutus uses Ethereum and Bitcoin blockchain, as well as a few imported moving parts. However, the platform itself and the PlutusDEX, a decentralised application also known as Dapp are built from the ground up by our development team. It is fully our intention to open-source the DEX, however only major aspects of the exchange will be open source. The rest will be available using a public API.
Certain features such as escrow and user verification will require to use to our own servers and proprietary code. This for both technical and legal reasons. Full details on this matter will become available in the near future.
Since Plutus uses the Ethereum blockchain, what is your response to concerns that ETH has a lower hashrate than bitcoin and the GAS transaction costs?
That’s something we are aware of but for the purposes of the app it’s the most effective way of making the Plutus DEX platform work a lot smoother (by using programmable smart contracts).
Current gas price is 20 “gwei” according to the website Ethstats. This means that 100000 gas would cost 0.00002 Ether or around €0.00014. Compared to the costs of a server to operate a centralised exchange, this is still very cost efficient and comes with many other benefits: such as transparency for users, as well as being able to issue a decentralised rebate system. Further use-cases for smart contracts are still unexplored.
In the end, there is still plenty of time to catch up with Bitcoin concerning hash rates. For the purposes of the Plutus app, the current system is completely adequate.
How do the fees work?
The only fee within the entire Plutus payment system is charged when users convert Bitcoin to a contactless payment balance. The trade itself occurs between the user and trader without the opportunity of middlemen to include any additional hidden markup on conversion rates. This means no centralised exchanges, and no other charges whatsoever. We are currently working on determining the best deals to be able to offer the lowest fees.
For traders, there are no fees at all. This provides incentives to fuel the payment network with fiat, and make it easy for traders to obtain both Bitcoin and Pluton for further trading or to do their own personal shopping.
Typically there is a fee incurred when issuing a virtual debit card. Does Plutus eat this fee?
Yes, it’s part of our commitment to convenience. The cost for setting up a VDC is covered in our fee structure for Bitcoin conversion, as well as other options we will add in the future. However, Plutus is not necessarily limited to crypto only. In the future we will add direct fiat deposits for the unbanked.
How much personal info do I have to give to use the service provided by Plutus.it?
Plutus plugs into traditional payments infrastructure to make contactless payments using digital currencies possible. For this reason, there are AML/KYC guidelines that Plutus must comply with when users register to buy digital currency using fiat on the PlutusDEX network.
If you are converting Plutons to a virtual debit card on the app then user verification will be needed. However, you can still use the Plutus app to send Plutons between users with only a simple email verification.
To obtain higher spending limits, you will need complete KYC verification of the account. For smaller spending limits, only basic information will be required. More details on these requirements will be available prior to launch of the app.
How long would I have to wait after preloading Plutus before I can shop?
Once you make a deposit, you will only have to wait the time it takes for your transaction to receive 3 confirmations on the bitcoin network. As soon as this is completed, your device is ready to Tap & Pay at NFC-enabled Brick and Mortar merchants. This all varies based on the average confirmation time of the Bitcoin network. One confirmation takes an average of 9–10 minutes, but this may vary.
For more information, you can take a look at bitcoin statistics: https://blockchain.info/charts/avg-confirmation-time
What happens to Bitcoin and Pluton deposits and how is the merchant paid?
Plutus does not generate any wallets for its users. The exchange occurs directly between users of the Plutus mobile app and the PlutusDEX platform. The user’s crypto deposits on the app are sent directly to DEX user’s provided payout address. The user registered on DEX is then able to move the tokens freely to trade elsewhere or simply reuse on the app. Plutus operates entirely without holding any cryptocurrencies or digital assets.
Merchant are paid immediately by a virtual debit card, which is charged with funds released from the PlutusDEX user’s escrow account, to user’s prepaid virtual debit card account on the Plutus app.
Can I withdraw my bitcoins using the app?
Once you make a Bitcoin deposit in your Plutus account, they will be automatically converted to fiat via the PlutusDEX, and a trader will receive the deposit on an external address they specified. This means that there will be no crypto in the system to withdraw, because by this time the trader has already funded your virtual debit card from the funds in escrow. Once you have a virtual balance, it has to be spent at a merchant. For this reason we recommend you only deposit as much as you want to spend, or use Plutons instead. Plutons are converted instantly and without conversion costs, which means that you can convert them at the point of sale directly.
When Will the Plutus App Launch?
The Plutus app is currently in closed alpha, and its main feature — Tap & Pay using a bitcoin contactless balance — has already been successfully tested. If you would like to see the app in action, please take a look at our various field demos from the week where we made all our purchases using only Bitcoin and our Plutus app.
The technology behind Plutus requires significant development time and resources, we are on target to release the app later this year (2016).
Why does Plutus take more time to develop than other payment apps?
Instead of building another payments app, our ambition is to build a next generation payments system from the ground up. Plutus will be much more than a contactless payment service. It will include a peer-to-peer exchange running on the Ethereum blockchain which will convert user deposits from bitcoin to fiat on the fly and reward them a rebate in Plutons.
This means that Plutus essentially becomes an automatic gateway for users to only deposit what they need to spend on the go, without the risk of sharing their financial details or losing them to a centralised service.
Please join us for a chat in our Slack!