“The fast and future-proof MerchantChain is a DLT platform designed for commerce,” Plaza Systems CEO & Chief Architect Kevin Johnson said.
“It’s the Ethereum for anyone who is serious about conducting business, trade, and commerce on the blockchain.”
The MerchantChain is based on SQ2 Fintech’s proprietary FSDLT (file system DLT) AURA™.
SQ2 CTO and Plaza Technology Director Ronald Aai said: “We have attempted to address fundamental problems with cryptocurrencies and blockchain and we believe we have succeeded.”
Mr Johnson said: “We believe the MerchantChain is the first truly disruptive blockchain solution designed for mass adoption.
“The MerchantChain allows businesses and individuals to leverage a fast and future-proof FSDLT and enjoy the benefits of a truly useful cryptocurrency.”
How fast is the MerchantChain?
The MerchantChain can handle 15,000 transactions per second (tps) ALL of which take three seconds or less to resolve.
Therefore the practical usefulness of the MerchantChain is retained even at extremely high-volume conditions when some transactions might take one or two seconds longer.
“Our FSDLT (File System DLT) solution runs on mDHT (mainline Distributed Hash Table) networks, which ensures that transactions can be processed in parallel,” explained Mr Aai.
“Each file is chained to the next creating an immutable ledger.
And we use our SHOUT (Simple Heuristic Object UDP Transfer) protocol whereby all parties to a transaction — the nodes of the buyer, seller, and witness—shout out the transaction to their peers so that it can be copied, verified, and confirmed much more quickly by the network.
“Older blockchains use a slow gossip-like protocol whereby the first witness whispers to another node which in turn whispers to another node until there is consensus in the network.”
How is the MerchantChain sustainable?
In proof-of-work blockchains like Bitcoin and Ethereum, miners compete to be the first to solve a mathematical problem.
“This incentivises high-powered processing rigs which consume so much electricity,” Mr Aai said. “Collectively crypto mining operations consume as much energy as a whole country!
“Furthermore, because transactions are written in batches (“blocks”), it’s not a fair system as the order of the transactions can be manipulated by increasing the processing fee (“gas”).”
MerchantChain’s proof-of-reputation (POR) is based on the actual order of transactions using an algorithmic mixture of response time, influence (number of connections), and stake (number of transactions), as well as a healthy dose of randomness.
“A score for participating is given to nodes by other nodes,” Mr Aai explained. “Like a social score, the higher the score the more reputable the node.”
In POR, reputable network nodes are rewarded for witnessing transactions; there is no ability to game the system to “mine” more coins.
The upshot is that the MerchantChain ledger can be maintained by ultra-low-powered IOT (internet of things) devices that come in many form factors.
One such form factor is the high-tech PlazaConcierge™ smart speaker.
Mr Johnson said: “Rather than mine our users’ data and use it to sell them stuff, which is what other smart speakers do, PlazaConcierge gives owners control over their information and privacy and pays them royalties or rewards for maintaining the MerchantChain ledger.”
PlazaConcierge not only maintains the MerchantChain but also integrates other functions, such as a chatbot AI for hands-free product searches and purchases; and a secure element that stores private keys, personally-identifiable information, and a secure socket layer (SSL) certificate.
How secure is the MerchantChain?
The ability to stamp out fraud and other illegal activities is an oft-overlooked aspect of sustainability.
“All individuals and businesses who want to participate on the MerchantChain must have the AURA SSL Certificate,” Mr Aai explained.
“It’s basically an anti-money-laundering (AML) and know-your-customer (KYC) process which helps buyers trust sellers and sellers trust buyers.
“Also your SSL Certificate ensures that your wallet cannot be cloned by malicious users such as what is happening with credit cards now.”
Mr Johnson added: “This best-practice anti-fraud measure will instill trust and confidence in the MerchantChain, not only among our most cherished stakeholders — the public — but also regulators.”
In what way is the MerchantChain scaleable?
Built into the MerchantChain model is a strong positive correlation between transaction volume, user numbers, and the deployment of nodes.
And correlation corresponds to causation in this case.
“It’s a positive feedback loop,” Mr Aai said.
“As the volume of transactions on the MerchantChain grows so will overall user numbers and the number of individuals and businesses adopting the IOT devices that are the nodes of the MerchantChain.”
How can the MerchantChain be future-proof?
Sustainability and scaleability both have massive implications for the future of the MerchantChain, but so does the emergence of technologies that could threaten its very existence, such as quantum computing.
Fortunately, the MerchantChain is quantum-proof for the foreseeable future.
This means the distributed ledger and its transactions will remain secure long after the code-breaking power of quantum computing becomes a problem for the mainstream; a claim very few extant blockchain protocols can make.
“Most blockchain protocols are resistant to quantum computational hacking right now,” Mr Aai explained.
“But as quantum computing evolves, the MerchantChain will remain unbreakable thanks to our proof-of-reputation algorithm.”
How does the MerchantChain help commerce?
Clearly the MerchantChain is impressive technology — a lot of thought and experimentation and late nights has gone into it — but how is it possible for it to be like “the Ethereum for commerce” as Mr Johnson has described it?
“Anyone can sell on the MerchantChain,” Mr Johnson explained.
“And by ‘anyone’ I mean it: From individuals selling their unwanted items through to multinational companies seeking fully-customised and branded DLT applications and solutions.”
And just as Ethereum allows the minting of ERC20-standard “utility tokens”, MerchantChain allows decentralised application (dapp) developers the ability to mint their own MerchantChain Transaction Coins (MTCs).
“A MerchantChain Transaction Coin means that it is a usable cryptocurrency for everyday transactions,” Mr Johnson said.
A MTC is tethered to real-world value (not market sentiment), designed for spending (not “hodling”), and has only two decimal places (not 18).