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Vericoin has launched an innovative and potentially revolutionary approach to gain acceptance by merchants that could shake the world altcoin in the event that the service gets wider use.
Launched in May, vericoin is an altcoin proof-of-stake that has a variable interest rate that fluctuates depending on how many coins are playing. As more coins are used to bet and support the network, the interest rate goes up.
One of the ways that alternative digital currencies seek a wider audience is through the expansion of merchants' acceptance. Companies like Coinkite and CoinPayments.net allow payments in altcoins, but it is not clear exactly how much these efforts have been successful in expanding the number of merchants who accept alternative digital currencies as a payment method.
To date, roadblocks have emerged because of the infrastructure that must be accepted by merchants and the different willingness of these companies to accept a potentially volatile digital currency.
Enter VeriBit
Vericoin completely bypasses these obstacles with VeriBit, a value-added service for the network that allows people to make purchases of smaller bitcoins with their Vericoin. VeriBit serves as a passer-by for vericin dealers, facilitating purchases for consumers in any bitcoin-accepting company.
This new service opens the tens of thousands of merchants who currently accept bitcoins to consumers who want to use vericoin.
CoinDesk spoke with co-creator Patrick Nosker, who said that before a service like VeriBit, those who wanted to use an altcoin to make a payment had to exchange a certain amount for bitcoins. However, due to factors such as exchange fees and the natural volatility of a market, consumers run the real risk of losing value before making purchases.
Nosker said:
"It's not very simple for a beginner, so what we've created is a level of transaction between the exchanges and the user."
VeriBit is oriented towards smaller rather than large transactions. Currently, there is a spending limit of 0.15 BTC (about $ 87 at the time of printing), although according to Nosker, this ceiling is expected to increase in the future.
How VeriBit works
VeriBit is designed to be an easy way to pay for bitcoin purchases using vericoin. Vericoin's development team acts as a payment processor for these transactions, managing a Vericoin portfolio that must be deposited by a paying consumer and another that pays for the bitcoin payment destination.
To make a payment, first enter the address you want to send bitcoin to and how much BTC you want to transfer. After entering the information, VeriBit calculates the amount of veracity that needs to be sent, plus a transaction fee of 2 VRCs.
You then have 20 minutes to send your verts to the address, after which the portfolio operators – currently Vericoin's development team – complete the transaction and send the BTC to its destination.
According to Nosker, the function remains financed through donations and the exchange of Veronine taxes for more bitcoins. He said that VeriBit was largely developed to build more services in the network rather than derive profits from user transactions, saying:
"We did not want to enter the trading market or make tons of money doing this, it's really just to make the vericoin immediately usable. [The fee] it only covers the cost of doing it. "
Ultimately, he said, the goal is to create an incentive for consumers to use an altcoin by allowing them to spend it wherever bitcoin is accepted.
Vericoin's anonymity service
In addition to VeriBit, the Vericoin team has also developed several other services that attract both traditional consumers and more experienced altcoin users.
One of the biggest forces at the moment is the anonymous transaction movement. This group of altcoin projects, led by projects such as darkcoin and XC, focuses on anonymous transactions to make them invisible to detection efforts.
Nosker noted that anonymity in general is not a feature that appeals to most people. But in recognition of the demand for such functionality, the team produced a tool to hide transitions even if it failed to establish it through the Vericoin network.
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