Blockchain technology is capable of transforming a number of industries, yet it’s been predicted that the financial sector will be leading the way in terms of development via the blockchain.
According to IDC’s inaugural Worldwide Semiannual Blockchain Spending Guide, blockchain spending will be led by the financial sector, whose spending is expected to reach $754 million in 2018. With this in mind, a number of new use cases for blockchain technology are developing in the financial space. One of the most noteworthy ones is the digital transformation of online payment systems through the creation of decentralized payment platforms.
A Decentralized Payment System
The Request Network (also known as Request) is an Ethereum-based, decentralized payment system which allows users to request payments and securely receive money. The Request Network uses blockchain technology to enable secure, peer-to-peer payments that will accommodate both cryptocurrencies and global currencies. Request currently accepts payments in ETH (Ether), but later this year, the company plans to add support for Bitcoin, ERC20 tokens and fiat currency.
The Request Network aims to become the next leading global payment system (think PayPal, but decentralized), yet without any third-party interference or high transaction fees. Request also plans to go above and beyond just sending and receiving payments. The Request protocol aspires to create financial flows on the blockchain by setting the standards for payments, invoicing, accounting and auditing in both cryptocurrency and fiat.
This is especially appealing for cryptocurrency enthusiasts looking to eventually send invoices, provide payments and receive salaries exclusively in cryptocurrency.
How The Request Network Works
The Request Network allows users to perform a number of financial actions, of which the most noteworthy is the processing of transactions on the blockchain.
Peer-to-peer payment requests are relatively simple on the Request Network. Users requesting and receiving payments can send invoices to other users via the blockchain. Once requests are detected, payments can be made in one click. The entire transaction happens without any third-party interference, and payments are received instantly.
Payments made on the Request Network demonstrate a number of advantages when compared with traditional payment systems. For instance, payments sent through Request are push-generated, meaning the account holder sends the money directly. This ensures that users don’t have to share their bank account information. Also, the use of blockchain technology allows for lower transaction fees. The Request whitepaper explains that all fees will remain between 0.05% and 0.5% and will decrease as the system develops.
Request also aims to have a large impact by improving the way businesses exchange money. Many traditional payment systems require third parties to ensure that payments are made to employees, other organizations, etc. Request, however, will serve as a proof of transactions between two (business) parties. Invoices are also linked directly to payments, meaning that the request becomes the transaction. The network also makes sure that requests are validated by recipients in a timely manner.
And while the entire Request Network is built upon digital trust, Request’s reputation system lets users rate other participants as “good” or “bad” in terms of their payment reputation. This also increases the chances of receiving financing and investment from third parties and lets users improve their credit scores over time.
The Request Network uses an ERC20 token called REQ, which users spend in order to access the network. REQ tokens are necessary for participating in the network and are required to create advanced Requests and reward various parties that help build the Request ecosystem.
While using the network, participants will have to pay a network fee using the REQ tokens, which will subsequently be burned. The fees will be adjusted by the Request Network operators depending on the decreasing supply of REQ and the exchange rates associated with the various currencies authorized by the network. Other purposes of the REQ token include acting as an intermediary for cross-currency exchanges and forming governance in community voting.
Decentralized Payments Are The Future
As the cryptocurrency ecosystem continues to evolve, there will be a greater need for decentralized payment systems that can accommodate both cryptocurrencies and fiat payments. Thanks to blockchain technology, the Request Network has built just this. Request caters to a variety of financial actions in both the crypto world and the traditional world, allowing participants to easily send and receive cryptocurrency payments without the interference of third parties and high fees.
The Request Team plans to continue to build out their network and has allocated $30 million in REQ and ETH over the next five years to the Request Fund. Through this fund, the team plans to work on new Dapps (decentralized apps) relating to invoicing, P2P payments, payroll, supply chain traceability, and other financial tools that will encourage the widespread implementation of decentralized payment systems.