What’s ADA Pay all about, and how could it impact Cardano and its token, ADA? COTI, the company behind it, provides functionality as robust as Paypal and Alipay in a decentralized manner.
What is ADA Pay? The Cardano Payment System. Companies like Crypto.com, Binance, or even Coinbase have allowed you to use your crypto to pay with credit cards anywhere in the world. But these systems, while they work, do not align with the crypto philosophy of decentralization because those who provide the credit cards are companies like Visa or Mastercard. Furthermore, centralization means there are intermediary companies and, therefore, inefficiencies and unnecessary extra costs.
Contents
What is ADA Pay
ADA Pay is Cardano’s payment gateway that allows merchants to accept payments on ADA, Cardano’s native token. Implemented by Coti, ADA Pay has several notable features that make it an attractive alternative to other payment systems. One allows the buyer to pay with ADA, and the merchant can receive payment in 35 different fiat currencies (Dollar, Euro, Yuan, etc.).
How does ADA Pay work?
Like any digital payment system such as PayPal, you can use ADA Pay to make purchases with the ADAs in your wallet in just a few clicks. The merchant receives payment almost instantly, from anywhere globally, at a meager cost, and in any desired currency.
ADA Pay offers multiple innovative payment methods, such as QR codes. Therefore, it is reasonable to think of a near future where stores like Shopify, Mercado Libre, or even Amazon offer ADA Pay as a payment alternative.
Benefits for Cardano
1. Usability
The first and most apparent is that as an ADA holder, you can use your tokens to obtain products and services, just like with any other currency.
2. Valuing ADA
Understanding the impact that ADA Pay could have on the value of the token means it is necessary to understand the concept of value and the basic economic concept of supply and demand: When something generates profits, it tends to be worth more; when something tends to be worth more, the more demand there tends to be; and the more demand there is for something scarce (such as ADA), the more it tends to increase in value. In other words, the simple possibility of using ADA as a means of payment provides a benefit, which increases the value of the Cardano network and, thus, the price of ADA, its token.
3. Increased rewards
Each transaction generated must pay a small fee to the network that rewards stake pool operators and delegators (ADA holders). Therefore, the more transactions that happen in the Cardano network, the more attractive the ADA holder is in increasing demand. As we explained previously, this increases its value and price.
When will the service be available?
Although there are no precise dates, everybody agrees that we must first wait for the Alonzo hard fork for the system to start working, which converts Cardano into a Smart Contract blockchain. Thus, applications will be able to start running on it. This upgrade is stipulated to happen during the second half of 2021.
Meanwhile, Coti, the company and platform developing the application published a demo shop and said the following:
“There are already merchants willing to adopt the solution, including a famous store that will be the first to use the new ADA Pay system.“
What is COTI?
COTI is the world’s first blockchain protocol optimized for decentralized payments, designed to be used by merchants, governments, decentralized payment networks, and stablecoin issuers. COTI Pay, their first application, already has a network of 5,000 merchants and 80,000 users.
Most blockchain platforms today are optimized for dApps and not for payments. They also do not provide the infrastructure and tools necessary for day-to-day transactional use. In addition to numerous challenges related to identity, trust, stability, scalability, and high transaction costs, the lack of infrastructure impedes the adoption of cryptocurrencies for general use. COTI uses a DAG (directed acyclic graph) ledger to address these shortcomings, providing extreme scalability to process thousands of transactions per second (TPS), price stability, and low-cost mechanisms.
Bottom line
ADA Pay is the payment system that will allow ADA holders to use cryptocurrency to buy and pay for any services globally, allowing merchants to choose the currency they want to receive payment. In addition, the ADA Pay system supports Cardano’s initial idea that ADA can be used for various applications and services over time, giving it the same use as the dollar, the euro, or other currency.