Building Trust and Reputation Payment Systems with COTI

As Bitcoin ended last year with momentous gains and mainstream discussions never before seen in its history, the underlying problems still exist. High transaction fees, bottleneck congestion, and scalability issues plague Bitcoin and other cryptocurrencies, limiting it use for day to day payments. 

COTI hopes to solve these payment challenges by introducing an ecosystem on the blockchain with qualitative features found in a traditional financial network such as credit, mediation and instant payments. 

Using COTI’s digital currency, the COTI token (XCT), observable transactions on the blockchain will allow buyers and sellers to build reputation, thus allowing for an honest, convenient, and reliable transaction experience for all parties involved. 

Similar to a credit rating, COTI will use a Trust Scoring Engine which generates a Trust Score for each participants in the network. The parameters when calculating Trust Scores include:

Transaction value

Dispute occurrence

Disputes won

Disputes lost

User ratings

The users Trust Score determines the transaction fees that buyer and sellers will pay when making a transaction. While the fee structure may seem complex, it builds the persuasive incentive in COTI’s network for all participants. The four fees are the reserve credit fund fee, mediator fee, market maker fee, and COTI network fee.

Reserve Credit Fund Fee: This will be a network-wide pool of capital that sellers will draw upon to access the buyer’s cash instantly. This fee solves Bitcoin’s increasing slow transaction times where some transaction have sometimes taken days or weeks to be processed. 

This fee may also be used to pay the buyer where the seller is found to be at fault in a dispute. 

Mediator Fee: If the buyer is not satisfied with the goods or service they have received from the seller, they may broadcast their dispute to the COTI network. Mediator nodes may review the buyer’s case and vote on the dispute either in favor of the buyer, seller, or neither. In the case of a hung jury, there is a second round of voting.  The fee is paid by both the buyer and the seller according to their corresponding trust scores.

Market Maker Fee: The market maker fee will support exchange rates but can be avoided if the buyer and seller both accept COTI’s XCT currency in their transaction.

COTI Network fee: A fixed percentage of the transaction is charged to fund the network administration.

Using this Trust Score and fee structure, COTI has potentially paved a way to utilize cryptocurrencies in everyday transactions. Why pay a high transaction fee on eBay and PayPal or buy a seller account on Amazon when COTI allows for a transparent and low rate transaction for buyers and sellers?

COTI plans to launch its first phase of the network in the first quarter of 2018. Per the COTI roadmap, the project will be developing a suite of applications for buyers, sellers and mediators which include wallets, virtual debit cards, and processing tools.

Site: https://coti.io

Whitepaper: https://coti.io/files/COTI-overview-document.pdf 

Technical document: https://coti.io/files/COTI-technical-whitepaper.pdf