COTI (COTI) could offer some value because it appears to be the first cryptocurrency they designed for payments.
To explain, they designed cryptocurrencies such as Bitcoin (BTC) as a store of value, not a payment mechanism. Hence, does a good job of keeping your money safe from hackers and inflation. However, accessing Bitcoin funds and spending Bitcoin is hard.
Spending Bitcoin is hard because they built Bitcoin that way. Consequently, Blockchain.com estimates Bitcoin was processing 2.9 transactions per second (TPS) on 18 September 2021. The heavy encryption that makes Bitcoin resistant to theft and tampering makes it slow and hard to process.
Is COTI (COTI) Scalable?
That means Bitcoin can process two transactions at once. If over three people try to spend Bitcoin, they have to wait until another transaction is free. If there are 1,000 transactions of you, you could have to wait 1,000 seconds or around 16 minutes to process a transaction.
In contrast, COTI’s builders claim their blockchain can process up to 100,000 TPS. If that claim is true, COTI could process most transactions instantly. Moreover, thousands of people could use a COTI payment mechanism at once.
If 20,000 people want to play a game. They could instantly buy weapons or tools they could use in the game.
Consequently, people could make real-time purchases on a COTI blockchain, if the claims of COTI builders are accurate. That could allow e-commerce platforms to accept COTI.
How COTI brings Machine Learning to the Trustchain
The building block of the COTI platform is the Trustchain. The Trustchain is “a proprietary consensus algorithm based on machine learning.”
I suspect the Trustchain is a sidechain. A sidechain is a less encrypted digital connection that serves as a shortcut between blockchains. To explain, blockchains are slow because of the encryption.
Sidechains are fast and scalable because they have less encryption. Thus, sidechains sacrifice safety and security for speed and scalability. Hence, the Trustchain could be less secure.
The Trustchain drives COTI’s scalability by operating on a “multi-DAG (directed acyclic graph) data structure.” They claim the multi-DAG allows the Trustchain to process over 100,000 TPS. The DAG-based protocol combines infrastructure, services, and application layers to create a payments solution.
They claim the COTI payments solution could contain a wallet, a debit card, point of service (POS), support, externally developed payment apps, externally developed stablecoins, Know Your Customer (KYC) compliance, and buyer-seller protections.
They claim the DAG can provide price stability, buyer-seller protections, and low-transaction costs. Hence, is the DAG is at the heart of COTI’s claims to offer seamless digital payment solutions.
COTI Payments Solutions
The COTI (COTI) platform supports many payment solutions and other Fintech products. Those products include:
The COTI Pay app. They claim COTI Pay can accept many payments, including cryptocurrencies, stablecoins, credit cards, and merchants’ native coins. They claim COTI Pay can offer financing with interest earned on deposits and business loans.
The COTI white label payment network. They claim the white label network allows users to create their own payment solutions with native coins, and lower-fees. For instance, merchants can accept micropayments through the COTI white label payment network.
Can COTI cash in on Stablecoins?
They claim COTI is the first platform optimized to buildstablecoins. In fact, they claim COTI can help users build their own branded stablecoins.
Hence, COTI’s developers claim a retailer could build its own stablecoins users could only use at its platform. Amazon (AMZN) could build a COTI stablecoin you can only spend at Amazon.com, for example.
Stablecoins such as Tether (USDT) are popular because they pay in fiat currencies, such as the US dollar. A stablecoin is a cryptocurrency that contains a smart contract or digital robot that makes fiat currency payments from a bank account why you spend the coin. For example, Tether pays in US dollars when you spend it.
Stablecoins are popular because they eliminate one of the main problems with cryptocurrencies. They offer payment in a currency you can spend in your daily life.
Stablecoins are already attracting a lot of money. Tether (USDT), for example, was the fifth most valuable cryptocurrency with a Market Cap of $68.719 billion, a Fully Diluted Market Cap of $71.387 billion and a 24-Hour Market Volume of $90.479 billion on 22 September 2021.
I think there could be many uses for a build-your-own stablecoin product. A US website could sell its USD stablecoins to foreign customers so it could receive many in US Dollars.
Can COTI Cash in on Loyalty Points?
Another huge moneymaker at COTI could be loyalty networks. Merchants could build loyalty tokens and reward customers with them.
For example, a gamer could earn game loyalty tokens each time she plays a game. The gamer could use the loyalty tokens to purchase weapons or more play. COTI’s loyalty tokens will represent loyalty points like those many American retailers give to customers. In the United States, the Kroger (KR) supermarkets reward customers who swipe its loyalty card with points that offer discounts on gasoline at Kroger filling stations.
COTI’s Loyalty Networks could offer branded wallets that allow customers to make purchases with Loyalty Tokens. Customers could also trade the loyalty tokens or sell them for cryptocurrency or stablecoins. Theoretically, a customer could trade Home Depot loyalty tokens for Kroger loyalty points, for instance.
There could also be loyalty tokens a customer could use at many retailers or websites. For example, a customer could use the loyalty tokens to get discounts at a travel website or lower prices on gasoline at Kroger filling stations. They even plan a global alliance of COTI loyalty networks.
COTI Remittances and Cross-Border Payments
The COTI team claims to have a solution for remittances and cross-border payments. Remittances are money that people in one country send to individuals in another nation. For example, cash a man working in Chicago wires to his mother back home in Mexico.
Remittances are an enormous business. The World Bank estimates that people in developed nations sent $540 billion in remittances to low and middle-income countries in 2020.
The COTI developers claim to have a remittance solution that could enable instant transfers and help users avoid fees. I suppose the solution allows people to send stablecoins to people in other countries over the Trustchain. The COTI website claims they can make instant transfers through price-stable coin that digitize payments through the Trustchain.
They could also develop cross-border payment solutions for banks, merchants, or e-commerce. For example, they could build an ATM that accepts stablecoins and pays cash from stablecoin transactions.
What Value Does COTI have?
Mr. Market has some interest in COTI (COTI). CoinMarketCap reports COTI was the 11th most trending cryptocurrency on 18 September 2021.
In contrast, CoinMarketCap estimates COTI was the 150th most valuable cryptocurrency on 22 September 2021. In detail, CoinMarketCap gave COTI a COIN Price of 41.19₵, a Fully Diluted Market Cap of $822.504 million, a Market Capitalization of $357.268 million, and a 24-Hour Market Volume of $221.741 million on 22 September 2021. They base those numbers on a Circulating Supply of 868.672 million COTI, a Maximum Supply of two billion COTI and a Total Supply of two billion COTI.
Comparatively, CoinBase gave COTI a Coin Price of 41₵, a Market Cap of $358.70 million, and a 24-Hour Market Volume of $213.20 million. They base numbers on a Circulating Supply of 868.7 million COTI.
Thus, COTI (COTI) has some value, but I think speculators need to avoid. I think COTI offers no value because I see no evidence that the COTI trustchain is processing remittances and other payments. In addition, I see no evidence that the COTI stablecoins exist.
My advice is to stay away from COTI until the COTI team proves they can build the stablecoins, payment apps, loyalty tokens, and COTI pay and get actual people to use them. However, I think COTI is a cryptocurrency to watch because it is offering some solutions that could real money in the real world.
Originally published at https://marketmadhouse.com on September 22, 2021.