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COTI is an israeli-based payment startup proposing a DAG based payment network with built-in reputation system, payment services, and high transactional throughput.
Premise
Popular cryptocurrencies today, exemplified by Bitcoin, are not great for payment. Designed to optimize immutability, security, and decentralization, they have low transactional throughput, high fees are high, and poor usability. COTI aims to change all that.
It does this by being a payment system, not just a cryptocurrency. It uses a DAG-based distributed ledger with services built on top to handle reputation scoring and trust, dispute mediation and currency exchange. This DAG approach allows it to achieve high transactional throughput and low fees, while still having adequate security and immutability, and without requiring a centralized authority. Its native currency, XCT is used to pay for mediation and transaction fees and central to the network, but COTI also supports other digital currencies and fiat as the medium of exchange.
The COTI payment system also includes user-facing applications. For consumers, the wallet app is multi-currency, with a built-in exchange, and virtual, one-time-use debit cards. For merchants, there will be a payment processing interface easily integrated through an iframe, as well as an API which integrates into existing e-commerce platforms like Magento or Shopify. In addition, hedging services are provided to allow merchants to accept and hold digital currencies without being exposed to price volatility. For mediators – the people who help play the part of miners in the network – there is also a mediation app which allows them to receive financial incentives for resolving disputes.
Team
COTI has a solid team heavy on technical talent, including developers, mathematicians, and cryptographers. Its investors and advisers include Blackrock and Processing.com, a payment solution provider.
Token
While COTI supports a range of currencies, its XCT token is a key part of the system. Like bitcoin itself is used to reward bitcoin miners, XCT rewards those who help the COTI network perform its trust and mediation services.
The token distribution is relatively reasonable. Despite the token sale only accounting for 42%, the amount allotted to the team and partners is just 18.5% with the rest going to fees used to operate and incentivize the network. We like that this ICO is not doing huge private presales, but rather allowing the public to participate.
Summary
Instead of simply creating a currency and allowing others to build services on top of it, COTI is a full featured payment system which happens to also have a native currency. Compared to mainstream crypto such as Bitcoin or Litecoin, there is not only much better transactional throughput, but usability, allowing for rapid merchant adoption
The system design seems quite nice to us, and the only thing we are worried about is execution. There is no demo or prototype yet, and while the team looks quite solid, the proposed system is much more complex than a pure cryptocurrency and requires time to be built and tested. Nevertheless, the project is quite strong and already has a lot of hype, we like it a lot.
You can register for the token sale here.
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