[Review ICO] COTI - Currency Of The Internet


With ambition to overthrow VISA, Mastercard and Paypal, COTI introduces new payment method for e-commerce using tangle protocol

COTI is a platform that provide payments method for e-commerce and COTI token will play the role of a "Currency Of The Internet"

Sound familiar right? It seems there’s nothing new compared to Bitcoin, Ethereum and many other cryptocurrencies.

However, Bitcoin or Ethereum cannot compete with traditional payment method like VISA, Mastercard and Paypal in terms of transaction process speed (TPS) in large scale. That’s the reason why cryptocurrency wide adoption in payment remains uncertain.

There are many projects designed to solve the problem of transaction speed and scalability, but it had to be traded off by decentralization or security of the system.

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COTI technology

COTI claims itself to solve this blockchain trilemma using Directed Acylic Graph (DAG solution). DAG is also known as tangle protocol applied by IOTA as an alternative for blockchain.

To be more specific, DAG (or tangle) is a type of data storage similar to blockchain. Instead of “wrapping data” in a block after getting confirmation like blockchain, transactions on COTI are connected directly like a tangle.

So how can tangle solve the puzzle?

1. Consensus mechanism

When a user creates a transaction, he/she need to confirm 2 other transactions and wait for confirmation from 2 other users. All the process occurs randomly, users can not choose which transactions to confirm by themselves.

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  • New transaction generated (aka Source presented by orange nodes) confirms 2 other transactions.
  • Then, it waits for confirmation from 2 validated transactions (the blue nodes).
  • The black nodes are confirmed transactions.

COTI, token, Currency Of The Internet, VISA, IOTA, payment, tangle, DAG, blockchain

The nodes will receive Trust Score as Credibility after completing their works. The higher the the Trust Score is the less time it takes to pass the transaction. We simply shows less cautious when working with highly trusted customers.

You can see that there no PoW or PoS, no mining or miners. Therefore, we can save time and computing power. Transactions will be proceeded at a lower cost.

You can look at COTI stimulation to see how does its protocol work in active model here.

2. Scalability

Because the process of confirmation is assigned randomly to each user, the more users join the network the more secure the system becomes. Moreover, computing power will increase on users’ contribution and scalability will become easy like a piece of cake.

3. Drawback

Even IOTA, the first adopter of tangle protocol, is facing some drawback of this new technology. COTI is no exception.

  • When the number of users is still small in the early stage of the system, 34% double-spending attack will be more simple if hacker have a more powerful hardware than normal users.
  • When a new transaction is generated, synchronization will happend at each node separately which may cause "random forking" or inconsistency in the system

Currently, IOTA proposes an "onboarding mechanism" called "Coordinator" as a solution for these problems. According to founder of IOTA, "the ‘Coordinator’ or ‘Coo’ for short, is essentially training wheels for the network until the amount of organic activity on the ledger is sufficient to where it can evolve unassisted, at which point the Coo is permanently shut off." (For explanation in details, you can read full article on IOTA medium)

In the meantime, COTI presents no official solution for their own network.

COTI token

  • Token: COTI, standard ERC-20
  • Soft cap: $10,000,000
  • Hard cap: $30,000.000
  • ICO time: Sep 15 - Oct 1, 2018
  • Price: 1 COTI = $0.1
  • Total supply: 2,000,000,000 COTI; 600,000,000 COTI for sales

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Only 30% of total emission is available for sales and 45% is for internal reserves. There's a high chance that COTI wants to take control over the market. It is said that COTI's incentive is to maintain a sustainable source of liquidity for their long term strategic development, like liquidity for their Dex (decentralized exchange) and other financial products. Anyway, high percentage of reserve may discourage invetors from buying COTI token due to their fear of manipulation.

COTI ICO price ($0.1) is considered to be quite "cheap" compared to IOTA price ($0.9 - $1.0) for a similar service. According COTI roadmap, they will launch alpha version of their exchange and e-wallet on September 2018. There are several supports for COTI price after their launching. Their token demand is in close relationship to the growth of COTI platform because users will need token to pay for their purchases.

E-commerce market for COTI

Global e-commerce market is forecasted to grow by 21.1% in 2018 and 19.1% in the next year with retail sales around $3 trillion. With the target to become Currency Of The Internet, there's still more room for COTI to develope.

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COTI consensus mechanism does not require strong processing power and long time waiting for transaction; therefore, COTI can hanlde abundant of small transaction everyday. It's quite suitable for B2C or C2C business on e-commerce platform like Amazon or Alibaba. However, COTI does not give a specific number of transactions that it can process at a time. To make COTI more popular and persuade investors, as well as users, they need to make clear about their scalability and network's speed.

In general, COTI seems to be a potential project in e-commerce sector. Investors can consider buying on presale to get bonuses and get token raised in value after their launching on September. Nonetheless, in the long term, we should take a close look on how COTI can deal wwith above issues to make further decision.

Written by nami.today