NetCents Technology (NetCents) has released its Zero Confirmation and Risk Analysis technology to guarantee cryptocurrency transactions before they are confirmed on the blockchain. Rather than wait for transaction confirmation, which can takes minutes hours or days, depending on the blockchain, Netcents ‘underwrites’ each approved transaction.
“The delay in transaction approval is the biggest hurdle for card present, retail merchant and partner adoption. As it is right now, there is a delay for all cryptocurrency transactions, opening a window for transactions to timeout, fraud, and double spending,” stated Clayton Moore, CEO of NetCents Technology. “The launch of this technology lines up with our POS and terminal integration and rollout. Being integrated with companies like Oracle and PAX, who alone has over 26 million terminals, the delay at the point of sale was something that we knew we needed to eliminate to instill confidence for retail merchants to begin accepting cryptocurrency and avoid transaction delays for the consumer.”
The NetCents technology
NetCents’ Zero Confirmation and Risk Analysis technology facilitates near-instant yet risk-mitigated business. It guarantees a cryptocurrency transaction before miners confirm a transaction has processed onto a blockchain.
For example, NetCents claims its platform enhancement will reduce the wait time at point of sale transactions – which the Company has seen take up to 30 minutes. With Zero Confirmation and Risk Analysis, NetCents is able to deliver near real-time confirmation for 98% of all Bitcoin transactions.
To do this, the NetCents technology provides a score for each transaction. Once obtained, this guarantees a transaction against:
- double spend
- other fraud.
The NetCents scores each transaction via its own algorithm. If approved, that transaction needs no confirmations onto the designated blockchain. At launch, the Company will be using this technology for all Bitcoin transactions. Within six months NetCents says it will roll out support for Litecoin and Bitcoin Cash transactions.
In addition, the Company will be licensing this technology to:
- cryptocurrency payment processors
- any business that is looking to validate a transaction before the transaction is confirmed on a blockchain.
NetCents is a transactional hub for cryptocurrency payments. Its stated purpose is to:
- equip forward-thinking businesses with relevant technology
- integrate cryptocurrency processing into conventional payment models
- avoid risk or volatility of the crypto market.
NetCents Technology is registered as a Money Services Business (MSB) with FINTRAC. This “ensures our consumer’s security and privacy“.
Enterprise Times: what does this mean
It is a common gripe about cryptocurrencies, and about Bitcoin in particular, that settlement time is unpredictable. In a sales environment, and especially in PoS situations, anything which facilitates (in all senses) each transaction holds out promise.
In addition, such instant settlement would provide merchants with protection against market-volatility and liquidity issues associated with processing cryptocurrency transactions. Merchants can take advantage of lower fees, faster processing as well as themselves then leverage the liquidity of ‘crypto-to-fiat or crypto-to-crypto’.
Regardless of whether merchants choose crypto or fiat currency to settle in, the NetCents claim is to:
- confirm the settlement of each transaction almost instantaneously
- handles everything at the backend
- guarantees the price of the cryptocurrency transaction in real-time.
Prima facie this would offer merchants peace of mind. But…
What strikes Enterprise Times is that:
- this adds a layer of complexity when solving the underlying problem is preferable (would it not be better to have faster transaction settling)
- there is no clarity provided as to how the NetCents’ algorithm will score transactions, nor about how long that scoring will itself take.
The NetCents approach does, nevertheless, address real problems. Whether it is practical requires proof.