Mar 12, 2021
At Algorand, the focus has been to design an open-source blockchain protocol to power the next generation of financial products and services by enabling highly secure, near-instant, low-cost exchange of value.
Learn more about how Algorand is powering simple and cost effective payment infrastructure.
Prior to the development of Bitcoin, there were several failed experiments with digital currency in the 1990s, including Hashcash, Millicent, Cybercoin, CyberCash, and others. Generally, these solutions suffered from poor usability and an inability to establish currencies that could serve as markers of value.
While Paypal, Venmo, and other digital payment platforms that followed, demonstrated the demand for a means of more user friendly digital payment methods using the traditional financial system, the legacy infrastructure subjected users to transaction delays and high costs.
Bitcoin, which debuted in 2009, quickly attracted attention as a potential vehicle for conducting digital transactions. While it seemed at one time that bitcoin might serve as a platform for digital payments, inherent flaws prevented this from happening.. Besides the volatility of bitcoin’s price, its design was not ideal for facilitating low-cost, rapid transactions – two factors crucial to widespread adoption of digital payments.
With the introduction of stablecoins in 2014, blockchain technology gained a vital tool for expanding the adoption of digital payments. By providing a source of stable value, stablecoins such as Tether (USDT) and USD Coin (USDC) have rapidly expanded the scope of digital payments to unprecedented levels.
Algorand was designed with current and future needs in mind, based on an innovative frictionless design that enables the blockchain to process digital payments nearly instantly.
Algorand’s permissionless, pure proof of stake consensus protocol mechanism enables rapid, low-cost transactions across a truly decentralized network, enabling finalization of blocks in seconds.
The following chain characteristics enable Algorand to deliver rapid transaction speeds. Blocks are created in under 5 seconds due to the design of the core protocol:
Algorand’s design has made it a popular chain for a variety of digital payments use cases where robust security, rapid transaction speed, and low costs are essential. The simple and cost effective payment infrastructure opens a world of opportunity for online ecommerce payments, micro transactions, digital asset transactions (such as stablecoins) and more.
Below are several organizations who are at the forefront of leveraging digital payments on Algorand across institutional, retail, and crypto users on a global scale:
Bleumi Pay builds payment solutions focusing on the last mile of the blockchain ecosystem by enabling businesses to adopt digital currency for everyday payments and payouts. Bleumi Pay makes it easy for businesses to integrate digital currency payments and payouts by shielding them issues, such as digital currency payment validations and error handling.
By issuing money on the Algorand blockchain, starting with the euro, Monerium has expanded the frontier of stablecoin usage. The app enables users to connect an existing bank account to an Algorand address or create a new IBAN in their name. This enables the seamless transfer of euros between the SEPA network and Algorand without the need to use an exchange. This makes Monerium the first EMI (Electronic Money Institution) that has been authorized to issue e-money on blockchains in the UK and the European Economic Area.
A global financial firm dedicated to helping businesses and consumers utilize stablecoins for payments, Circle leverages Algorand’s platform to enable its users to conduct lightning-fast dollar stablecoin transactions with low transaction fees. Circle’s platform has facilitated over 100 million transactions amounting to tens of billions of dollars.
Floating Point Group
A platform that offers seamless access to cryptocurrency markets for complex cryptocurrency trading operations by making it orders of magnitude easier and safer to fund exchange accounts and settle trades. FPG is using Algorand and USDC for faster trade settlement and to streamline flow of funds.
An open-source software solution that democratizes algorithmic trading by enabling users to build and run customizable trading strategies, Hummingbot automates cryptocurrency trading on centralized exchanges and decentralized protocols. After experiencing increasing fees on other chains for liquidity mining payments, making their business model prohibitively expensive, Algorand’s native support for stablecoins enables Hummingbot to distribute any amount of rewards earned.
A digital platform for trading cash deposits across multiple geographies, Instimatch Global provides a global framework for institutional borrowers and lenders to transact with each other directly. By partnering with Algorand, Instimatch can offer additional blockchain-powered features, including crypto payments offerings.By combining Instimatch's global offering with Algorand's innovative protocol and capabilities, the company can bridge DeFi applications and traditional financial applications.
Planetwatch is an environmental services leveraging blockchain to improve environmental monitoring worldwide and protect public health. In addition, they have integrated Bleumi Pay with their WooCommerce website in order to accept stablecoins and other digital currencies. Algorand was selected as the backbone of this payment infrastructure due to its speed, transaction finality, minuscule transaction fees.
As the scope of the digital economy continues to expand, digital payments assume greater importance in facilitating the industry’s growth. Algorand’s innovative, next-generation blockchain is helping spearhead this expansion by facilitating near-instant, low-cost payments.