Crypto Payments: User Experience

The sphere of money transfers and the narrower sphere of cryptocurrency payments is developing fast thanks to the rapid evolution of global digital infrastructure. Only a few people anticipated this turn of events back in 1990s. The following material is aimed to provide a quick overview of the most promising ways to pay with cryptocurrency from the user’s perspective. Two major aspects of user experience will be discussed — interface and fee policy.

The history of cryptocurrency wallet services is in deep conjunction with the history of Bitcoin and other coins. The interface, an integral part of front-end, varies from wallet to wallet. When opening a wallet, the user expects to see an easy-to-understand software or website, and the vast majority of popular cryptocurrency wallets have managed to solve this task. The user fee, in turn, is one of the most integral parts of back-end, and here it’s important to demonstrate what is being paid in addition to the main transaction.

Sometimes cryptocurrency wallets can take unusual forms. The fees mechanism is not used in Dharma.io, a cryptocurrency service which recently announced the integration of payments via Twitter. Instead, one tenth of the interest generated by user deposits is taken. The integration with Twitter is made via linking a wallet account with your Twitter account, effectively making the special Twitter bot know what address is associated with it. There are, however, some serious downsides connected with this payment tool: if you lose your Twitter account, you might lose the money on a wallet linked with it, and the only cryptocurrency accepted today is dToken. In this case, a large part of customer pool who only wants to use Bitcoin is being scared away. It’s probable that Twitter and other social networks will introduce their own payment systems in the future but the current market of cryptocurrency is viewed as small and risky by tech giants. The situation might change over time.

While still being under active development, in-chat payments may become as common as cryptocurrency wallets during this decade. Again, the main selling point of this payment instrument is easy interface. The back-end of cryptocurrency in-chat payments is currently their biggest weakness. Today everyone can use Telegram Bots to accept fiat payments, and the same cannot be said about Telegram Open Network — the large system with its own payment token. Its release was repeatedly postponed in 2018 showing how difficult the blockchain technology can be at the building phase. In 2020, the additional regulatory challenge connected with the United States financial authorities has further hampered the work on this promising infrastructure. When looking at fiat in-chat payment systems, for instance, WeChat, one can see the main feature necessary for the future similar blockchain-based solutions: low fees.

What’s the real problem we can see from this overview? The biggest challenge for cryptocurrency payment services when it comes to user experience is to combine back-end and front-end in a way that the user base would be pleased. While there are some interesting deviations from the standard concept of a cryptocurrency wallet and in-chat payments may improve in the future, you can’t expect everybody to use your brand cryptocurrency, as Bitcoin makes over half of the crypto market as a whole, and you surely can’t set high or hidden fees and expect popularity.

Why Major Crypto Platforms Choose Mercuryo

Mercuryo is an ecosystem of cryptocurrency payments, and the recent news on cooperation between it and several exchanges quite familiar to the crypto community must have left some questions unanswered. Why exactly Bitfinex, a large respected exchange with millions of users and high trading volume chose Mercuryo, a startup you wouldn’t have found back in 2017? What’s behind the equivalent decision made by OKEx, EXMO and Trust Wallet? The answer is simpler than you may think.


We all read that a good business is solving a problem of some kind, and Mercuryo does so with the following issue. Today, you can meet only a limited number of of fiat-to-crypto payment providers. Why? Because it requires a comprehensive acquiring infrastructure, relevant experience in payments industry and compliance with payment industry information security, card processing and AML requirements. Your search narrows even more if you try to find a payment solution that allows to buy cryptocurrency with a bank card. And even if you found a few offers, most of them would still set high conversion fees.

The opportunities of Mercuryo which became possible thanks to our product development team form an attractive list we are ready to present to any new B2B customer. All of them are easy to verify. And, of course, the most attractive of them is bank card payments for cryptocurrency. You’d think that after 10+ years since the advent of Bitcoin we would have this opportunity everywhere but the situation is still far from that. Increasing the list of our customers simultaneously means increasing mass adoption. Another benefit from Mercuryo that B2B clients get is selling cryptocurrency and transferring the funds directly to the same card you used for purchase.

It would be a mistake to say that some of our readers never faced the following problem: to buy Bitcoin, you first need to find the right platform and convert your regional currency into the United States dollars. Our clients are from Russia greatly appreciate the opportunity to buy crypto with Russian ruble without converting it into USD in advance. In the future, the list of regional currencies available to use on Mercuryo will expand.

Let’s move to the benefits that are not seen to the regular user. The payment gateway of Mercuryo is customizable, the client’s data can be pre-filled and all of the issues related to KYC/AML are in our hands, meaning that in case something goes wrong, your management will not be responsible for solving it, as it will be our job as a payments provider. 

You can read more about the need for KYC in the current crypto enterprises in a separate article. In addition, Mercuryo handles protested transactions: we try to avoid them altogether but in case they appear, we are here to solve this issue.

Another strong point of Mercuryo is its flat fees policy. Only 3.95% for a purchase and 2.95% for sale. Mercuryo does not set any additional card processing charges but leaves an opportunity for crypto platforms to instate their own fee of choice by adding it on top of our fee.

When a B2B customer is leaving all KYC and AML (Know Your Customer and Anti Money Laundering) issues to us, it’s a justified action. Mercuryo is licensed in Estonia (fiat-to-crypto exchange and vice versa, a separate license for a crypto wallet). In the near future, Mercuryo will acquire an Electronic Money Institution (EMI) license in the United Kingdom which will allow Mercuryo to share many properties with a bank excluding services related to loans. This will further increase the attractiveness of Mercuryo for more B2B customers.

Mercuryo Customer Support: An Inside Look

As a client, you might wonder what’s going on in Mercuryo and how our key managers are viewing their work. We present a new series of posts that hopefully becomes regular — a look at the day-to-day business processes from inside. Our first post of this kind is about the point of view of Tigran Hakhunts, Customer Support Manager. Discover what challenges Tigran meets, what interesting things you might stumble upon in this field and what makes a good Customer Support Manager.

What does customer success mean for you? 

My name is Tigran and I work as a customer support manager here at Mercuryo. I personally consider our customers an extension of our company. The success of our customers is the success of the company in general. I always take extra care when onboarding new customers to help them make crypto exchange as effortless as it’s possible.

 Why is Mercuryo different from other companies?

Our engineers have developed a solution that takes crypto exchange to the next level by making it a regular online shopping experience. You have to register indicating your email address and phone number, pass KYC by providing your passport/ID card photo and a selfie with the same passport/ID card, bind your bank card and you’re ready to buy or sell crypto. Unlike many other similar services Mercuryo is a legally licensed service for crypto exchange, we are obliged to comply with AML requirements for the prevention of bank card fraud and money laundering. Our company ensures maximum security and protection while combining it with a user-friendly interface.

Who are your clients?

The majority of our clients are veteran crypto enthusiasts that use cryptocurrency on a regular basis to refill their accounts on trading platforms, pay their bills, shop online or send funds to their relatives living in different countries, for example, one of our clients is a senior cryptocurrency enthusiast who sent pocket money to his grandkids in bitcoins! We live in a digital age, and digital assets are not unusual anymore. 

Regardless of that, we also encounter many newbies who just discovered the brave new world of cryptocurrency. Our customer support managers not only help our clients with daily transactions but also educate and teach the basics of how the blockchain technology works and how to check out the current transaction status.

What are the necessary skills for a good Customer Support Manager?

The most important skills are communication, patience, diplomacy, empathy, emotional intelligence and technical background. Mercuryo communicates with different groups of people for different purposes — which is why communication is the first on our list. Patience goes hand-in-hand with effective communication. If you’re read as impatient, the client you’re communicating with won’t understand what you’re trying to say — they’ll only feel the frustration and get frustrated as well. A big part of working with customers is being diplomatic and tactful. Empathy is another critical skill, because it’s critical for working in a customer-facing role, and it’s important for any sort of people manager. Emotional intelligence is often confused with empathy, but it’s a very different skill that support managers must possess. While empathy refers to your ability to relate to misfortune, emotional intelligence is your ability to interpret and respond to other people’s emotions. Your technical background, especially crypto knowledge is key essential in order to understand all the processes and deliver great answers to our customers.

How do you de-escalate angry behavior in customers?

It’s important to inform our customer that Mercuryo is always on their side and to assure that their inquiry will be handled in a timely manner. We sometimes encounter angry customers, especially when there is a huge load on the BTC blockchain, transactions are slower than usual and a customer might often get frustrated because you feel insecure when you have sent a good deal of funds and you don’t see any results. So that’s why customer support managers come along and help to shed light, explain how things work and provide a link to track the funds.

What would you recommend for other Customer Support Managers?

People are not trying to deliberately annoy you with their petty requests. If you don’t feel the need to help others, you won’t like this job.

New Banking Ecosystems

Every bank is an ecosystem on its own. One can find several departments responsible for different activities in any banking institution. Since the end of the last century, we are seeing an increasing digitization of most major industries, and banks are not excluded from this process. Let’s see how these financial organizations improve and expand their ecosystems with today’s opportunities.

To cement its position on the market, banks can create new businesses with a high level of independence. The rise of digital payments has made it possible to easily integrate various services with each other. As a result, a bank can possess a service similar to PayPal, an online marketplace (think of eBay) and an online streaming platform like Netflix. Naturally, all of these three parts of a bank ecosystem would not necessarily get to the level of Netflix or eBay, but the main stimulus for banks to start this expansion in the first place is their customer pool. Shared ownership means bonus programs and active purchases.

This was only an example of an extended banking ecosystem. Some institutions are more focused on improving their work for customers. Fintech startups and blockchain enterprises are becoming interesting for banks to invest because nobody wants to miss a good way to optimize business processing. As this happens, the ecosystem of a bank can be joined by much younger startups.

When correctly managed, a modern startup can achieve impressive results and become a full-fledged bank in less than a decade. Such is the case with N26, at first only a small German interface product which had a consistent strategy allowing to grow and expand its ecosystem far beyond the first version. The UK-based Monzo has, too, made a similar leap forward. A mobile application has evolved into a multi-million bank preparing to enter the United States market.

In the legal field, bank ecosystems can seem convoluted for a regular user: for each economic activity there must be an appropriate license, and in today’s market one can witness offshore banks with several licenses acquired in separate countries. This strategy started to make sense at the same time when working offshore became common. When an offshore bank wants to expand its range of services, the legal department is becoming busy with getting an appropriate permission allowing to operate in at least several states. Given the current global climate, it’s far easier than it was last century.

These three aspects of modern banking ecosystems development — new services, fintech upgrades and more tasks for corporate lawyers — are considered not only by new or second-grade banks. Even the industry locomotives are reviewing these opportunities. Despite the obvious indisputable benefits for clients (especially when it comes to faster transactions), working with personal data shared between the ecosystem members is a sensitive matter requiring solid security measures. This is exactly the reason why large traditional banks would not just open up an over-the-counter (OTC) currency trading platform, an option sometimes offered by neobanks.

The problem of data leaks is becoming even more pressing challenge for organizations with a wide range of interconnected services. To ensure that each ecosystem member is equally protected is quickly becoming one the most important goals of banking cybersecurity experts. More data protection means more responsibility in the long term. Attempts to steal the information about the bank clients by attacking a weaker part of the ecosystem should be prevented.

This is what brings us to the situation we see today: neobank startups are sometimes offering more services than old banks which have much more to lose. However, it would be a mistake to assume that conservative institutions are doing nothing to upgrade their ecosystem. 

Mercuryo Payments Provider Extends Ties With OKEx Platform

OKEx, a world’s leading cryptocurrency trading platform has joined the list of partners of Mercuryo, a quick crypto payments provider allowing fiat-to-crypto and crypto-to-fiat transactions. As a result, OKEx will now support credit and debit card payments processed by Mercuryo. The representatives of Mercuryo and OKEx have expressed their full support towards the partnership.

Partnership with Mercuryo means that the large client base of OKEx is now able to easily buy BTC, ETH, USDT, BAT, ALGO, TRX and OKB, a global utility token issued by OK Blockchain Foundation, by using Visa & Mastercard. A customer can choose the US Dollar (USD), Euro (EUR) or Russian Ruble (RUR) as a preferred currency.

Mercuryo will be listed as one of the primary methods for those customers opting for a card payment thanks to the lowest card processing fee with no hidden fees and charges.

The new partnership reflects the ultimate business ideals of Mercuryo: bring digital currencies closer to common Web users and to expand the global outreach of digital payment tools. To implement this, Mercuryo is working in compliance with PCI DSS — a set of international rules on financial transactions and security used by Visa, Mastercard and AMEX.

As of today, Mercuryo is also a partner of Bitfinex, LATOKEN, BTC-Alpha and other large cryptocurrency platforms with millions of visitors and customers.

Catchain: The Consensus Algorithm of TON Blockchain

In our previous review, we made a general overview of Telegram Open Network and told you about the specific features in the operation of key nodes (validators) of TON Blockchain.

In this article, we will elaborate on one of the key aspects affecting the security and correct operation of the TON blockchain — a protocol allowing to achieve consensus between the network validators that are thoroughly described in the recently released document Catchain Consensus: An Outline authored by Nikolay Durov.

The initial name of the protocol during the first stage of research and development was Catch-chain (a trap blockchain) because essentially it is a separate blockchain to prevent malicious events impeding consensus achievement on the main TON blockchain. Later on, its name was shortened to Catchain.

The consensus algorithm of TON is described as tolerant towards system breaches connected with the so-called Byzantine fault. Byzantine Fault Tolerance is a popular buzzword nowadays and it’s important to clarify here what it means. All distributed ledgers are built to manage a system, and the problem with Byzantine generals formulated by Leslie Lamport, a computer scientist, actually predates cryptocurrency. Imagine several separated Byzantine generals in the middle of the war. They can send messages to each other but they are still not on the same page with how the war will go on and so they vote. A manipulative person with a decisive vote can send a vote for the attack to some generals and a vote for retreat — to others. Naturally, this only an example but one can imagine the very same problem occurring in the first-gen blockchains.

A truly Byzantine Fault-tolerant blockchain is the one where new blocks (and therefore new actions) are made only after total verified consensus. This consensus prevents the creation of new similar blockchains. There is a type of blockchains where this is not the case with Bitcoin Cash as perhaps the most notable result. The new blockchains are usually built with Byzantine Fault tolerance to ensure the integrity of the community behind the system and the system itself.

Catchain pertains to the latter type of algorithms in which preliminary agreement occurs before a new block is created, and midway forks are impossible. The Catchain consensus model is based on the already existing algorithm practical Byzantine Fault Tolerance (Hyperledger Fabric, Zilliqa) having increased resistance to Sivilla attacks in asynchronous networks and also has similarities with Tendermint (Cosmos) and dBFT algorithms (Neo, Algorand). However, there is a number of principal differences that allow us to call it a separate algorithm type.

Validation rounds

For a particular task of creation of new blocks on one of the TON blockchains (masterchain or one of its active shardchains), a separate group consisting of several validators is created. The members of this group are used to create a private overlay network inside ADNL as well as for the launch of a corresponding sample of the Catchain protocol.

The process of consensus achievement consists of several rounds which occur inside one catchain. At one point in time, there can be several rounds because some stages of a single round can intersect with others.

Every single round ends either with a collective acceptance of a candidate block suggested by one of the members of the process or with the acceptance of a ‘zero candidate’, i.e. without accepting any of the suggested candidates. The round is considered finished only after a potential candidate collects the signatures of over two-thirds of all validators, and this event can be added into a special CommitSign, after which the process will automatically start to participate in the next round (with a new identifier).

The events of one validation round occur in the following order.

  1. At the beginning of each round several validators (from a pre-selected list) suggest their so-called candidate blocks (with latencies depending on priority) and record this fact into a given Catchain using Submit events.
  2. As soon as the process gets all the necessary files, it starts validating the candidate and as a result, there occurs one of the events: Approve or Reject for the given candidate.
  3. Further on, each validator votes either for the candidate that received more than two-thirds of votes or, unless there is one, for a valid candidate with the highest priority. The voting is done by creating voting events embedded into new messages.
  4. In case of every slow attempt (i.e. any other attempt than the first), the process will vote for the candidate that has been pre-approved (by that same process) or for the candidate that was suggested by VoteFor.
  5. In case this candidate receives over two-thirds of ‘for’ votes during such an attempt, then the next event PreCommit is created, proving that all other candidates are rejected.
  6. If the candidate block gets PreCommits from more than two-thirds of all validators within this attempt, it will be accepted and marked by the event CommitSign with a valid block signature.
  7. All the signatures of blocks are registered in the Catchain and are ultimately collected for the creation of a ‘block proof’ (having the signatures of more than two-thirds of the validators for this block). This proof is an outside gateway of the consensus protocol and is distributed in the overlay network of full nodes which sign the new blocks of this shardchain or masterchain.
  8. As soon as a candidate block collects all the CommitSign signatures from more than two-thirds of all validators, the round is considered finished, and the process automatically starts participating in the next round ignoring all events related to other rounds.

Fork prevention

As mentioned above, in blockchains with traditional protection mechanisms using Proof-of-Work and Proof-of-Stake and their hybrids, for a small period, several correct blockchains or forkchains can coexist simultaneously of which one is further selected.

The TON Blockchain system built on the base of small blockchains (multi-blockchains) practically leaves no chances for the occurrence of such events as it uses the blockchain as a means of broadcasting of such messages, i.e. uses the blockchain as a means of broadcasting inside a certain group of processes. However, there exists a very small probability of creation and simultaneous confirmation of several identical blocks.

For prevention of such scenarios, there was created the Catchain protocol that allows to detect forks at the earliest stage of their emergence by way of creation of two (or more) different versions of the same message and sending them to different groups of peers. The block signatures on Catchain are created in such a way that the confirmation of forks (i.e. proof of their intended creation) becomes extremely simple as in reality a hash of a very small structure (containing a magical number, an ordinal number of the block and the hash of the rest of the message) is signed. As a result, to prove a fork, there are only needed two small structures and two signatures.

As soon as there is a fork found (it usually happens in recursive loading of dependencies of some messages), one group of nodes starts ignoring the messages of a neighboring group and all of its subsequent messages, as they are not accepted and broadcast elsewhere. Yet, the messages created before the fork was found can be loaded if they are referenced in the messages (blocks) created by the processes that do not know about this fork before they refer to them.

Then another service message containing a corresponding proof of fork is created and broadcast to all the neighboring nodes. From this moment on, all subsequent messages lose dependence from the messages of a known ‘bad’ node and in case of violation, these messages will be rejected by all the ‘honest’ peers in this group.

Every node stores its copy of the list of ‘bad’ members of the network (the ones that have created at least one fork). This list is constantly updated in case of detection of a new fork. Thus, if the sender is identified as ‘bad’, his or her message will be ignored and rejected.

Conclusion

It is well-known that the Catchain protocol was first developed in December 2018 and tested on 300 nodes distributed all over the world. During the test, the time in which consensus on block creation was achieved constituted 6 seconds. Later on, in December 2019 there was issued a document that showed that the Catchain protocol was 100% ready. Therefore, a conclusion can be made that all the preliminary tests were successfully passed. However, it was mentioned in the status section that the complete documentation was only 95% ready, while the final document was only released a year after in February 2020. Thus, it is logical to conclude that the theoretical part is quite thoroughly worked out and presents a fully completed original consensus model ready for realization in the mainnet.

Central Bank-Issued Digital Currencies

Can central banks become issuers for Bitcoin, Ethereum and other coins as shown on the picture for this material? Is that what we mean when speaking about central bank-issued digital currencies? A central bank-issued cryptocurrency is actually an innovative, completely different means of payment not connected with Bitcoin or altcoins familiar to the general public.

To understand how this new type of digital coins appeared, we must first look at the history of cryptocurrency in general.

Cryptocurrency started as a project by people not related to any officials, politicians or authorities. Although we still have little clues about who exactly was Satoshi Nakamoto, the anonymous creator of Bitcoin, one can suggest he was not connected with any state. The first message ever put on Bitcoin blockchain was “The Times 03/Jan/2009 Chancellor on brink of second bailout for banks” in the genesis block. Taunting the financial crisis of 2008, Nakamoto offered an alternative to the world financial system.

After the data security benefits of blockchain became apparent and the cryptocurrency market capitalization went up, some central banks started to review the idea of their own digital currency which is, unlike Bitcoin, is managed by a central authority. One of the most detailed research papers to date comes from the Bank of England. In a paper dating back to 2018, three models of central bank-issued digital currency (CBDC) are put into study:

  • Financial Institutions Access Model (Model FI)
  • Economy-Wide Access Model (EW)
  • Financial Institutions Plus CBDC-Backed Narrow Bank Access (Model FI+)

These three models each have a different answer to the question: “Who can use this hypothetical CBDC?” If we see an introduction of this coin based on Model FI or the Financial Institutional Access Model tomorrow, only banks and non-bank financial institutions (NBFIs) would be able to use it. This is drastically different to Bitcoin and other decentralized cryptocurrencies we already know. 

The second model, Economy-Wide Access (EW) adds households and companies to the list of potential users. They can buy and sell CBDC with the help of a CBDC Exchange, and banks may even integrate the exchange functions in its consumer offering to ease the engagement. Without any doubt, certifying a CBDC Exchange would prove much more difficult in comparison to most cryptocurrency exchanges (especially during the years of their advent).

And the third model considered by the Bank of England, Financial Institutions Plus CBDC-Backed Narrow Bank Access or simply Model FI+, allows yet another approach. Just like in the previous model, households and firms can exchange bank deposits to digital currency funds but this time, the access is more strict and it’s provided by indirect CBDC providers (iCBDCPs). To become an iCBDCP (wow, that’s a mouthful!), you would have to own a bank or a non-bank financial organization. In the words of researchers, “financial institutions providing iCBDC can be thought of as a type of narrow bank.”

Even despite the support towards the concept of CBDC voiced by Mark Carney, Bank of England governor, in the same year the aforedescribed study was published, we still don’t see an actual practical implementation two years later. However, the research findings have likely entered the base of a larger entity connected with the study of potential central bank-issued digital currencies.

The recent message on the website of the Bank of England tells that a new group of central banks, including the BoE, the Bank of Japan, the European Central Bank (ECB), the Sveriges Riksbank (Sweden) and the Swiss National Bank will all cooperate while researching the idea of CBDC. The relatively new agreement is supported by the Bank for International Settlements (BIS). The results of this joint global research may shape up the future world economy and especially its digital aspects.

The United States is not in haste to issue their own crypto dollar managed by the Federal Reserve (Fed). The topic is occasionally raised during the hearings in the US Congress. The most interesting discussion by far was in connection with the future national digital currency of China. The Chairman of the Federal Reserve Jerome H. Powell believes that a digital dollar and a digital yuan wouldn’t be comparable because of ‘a completely different institutional context’ while noting that every major central bank on the planet is currently ‘taking a deep look’ at CBDCs. In general, the Fed leader thinks a single dollar has served the United States well (and his successors will likely share the sentiment).

In China, a prototype CBDC is already tested out according to Mu Changchun, Deputy Chief in the Payment and Settlement Division of the People’s Bank of China (PBOC). Interestingly enough, their version of a CBDC might be one of the oldest in the world, as the development started in 2014. However, even six years later the Chinese state-backed blockchain devs still haven’t met all the necessary anti-money laundering (AML) standards, as stated by Yi Gang, head of the PBOC. As for the country’s president Xi Jinping, he recently called for ‘seizing the opportunities’ of blockchain, setting the paradigm for his subordinates in the Communist Party of China.

With large economies, it’s hard to create a working central bank-issued digital currency. The small ones, however, have more room for changes. The most recent example is the Marshall Islands where authorities chose Algorand blockchain as a basis for its national cryptocurrency. This is a stark contrast to many larger countries where CBDCs never left the discussion phase. The International Monetary Fund (IMF) even recommended the Marshall Islands to cancel the plans altogether, citing potential economic risks as a reason. In case with Estonia where state-managed processes started to move to the cyberspace even before Bitcoin was invented, the European Central Bank has likely played a role in the cancellation of a similar project. Considering the EU membership of Estonia, those actions are understandable — there should be no competitors to Euro coming from the member states.

The benefits of central bank-issued digital currencies are easily recognizable: a working CBDC is a secure system of payments backed by monetary reserves monitored by the government. However, the costs of transition and the fact that a cross-border CBDC might replace a local currency in countries with big inflation are not to be ignored. The latter is the most probable reason why the Bank of England has made CBDC so restricted in all of the three models described above. The current work of central banks studying this issue is to make the benefits outweigh the minimized economic dangers.

What does this all mean for cryptocurrency wallets and payment providers like Mercuryo? Judging by the atmosphere surrounding CBDCs today, unregulated crypto services will not get to the party when, say, a digital dollar is finally in place. This is a strategic reason for crypto acquiring to work in the legal field, consulting with financial regulators and adhering to related laws.

Women in Crypto

The vast majority of the cryptocurrency market are men. This pattern covers the coders of Bitcoin, Ethereum and other cryptocurrencies, coin traders and even those in public relations. Nevertheless, there are some notable exceptions. Let’s look at the following examples, see what challenges women face in the blockchain field and try to understand what could influence the current gender diversity situation.

Kathleen Breitman is a co-founder of Tezos, a cryptocurrency with the capitalization of around $1.9 billion at the time of writing. She became familiar with the idea of digital currency and decided to establish a new one together with her husband, Arthur Breitman. The initial coin offering (ICO) of Tezos was successful, raising $232 million. However, the vision of Tezos as a cryptocurrency with a healthy community was hampered by a scandal which involved Johann Gevers, president of Tezos Foundation.

Today we can say that Kathleen Breitman has managed to successfully deal with this obstacle as Johann Gevers is now not a director of Tezos Foundation — he has resigned voluntarily, leaving with $400,000 or more. Another big problem for Tezos was complaints from the United States Securities and Exchange Commission — this financial regulator may shut down a digital currency business if its officials decide that the said business is acting as an unregistered securities enterprise. Although there were messages in the media about the SEC preparing to shut down Tezos in the near future, they turned out to be false as we still see Tezos active today. Kathleen Breitman is a great inspiration for other women to become top managers of cryptocurrency-related businesses and to overcome challenges related to this sphere.

Another good example is Aparna Krishnan, co-founder of Mechanism Labs and an experienced coder. Interested in cryptography since high school, she was the head of education and executive at Blockchain at Berkeley where she founded an education department. Mechanism Labs is an open-source blockchain research lab focused on consensus algorithms and scalability issues. She is especially interested in Proof-of-Stake, a relatively new consensus protocol type. One of the main research problems Aparna has faced was that with the advent of the sphere, many devs did not even bother to realistically describe their own distributed ledger technology or adequately optimize it.

Aparna Krishnan is also a mentor in She(256), a program dedicated to increase the presence of women in the blockchain sphere. In She(256), different mentors are finding new women in this space and show them what to learn depending on the person’s goals.

“I definitely think being a woman in the blockchain space is hard. There are a lot of explicit and implicit biases… for example, a group of guys might be bros and might hang out, but that’s definitely not something a girl would be part of… you have to go above and beyond to build these similar [informal] connections,” tells Aparna Krishnan. “I would not say that people explicitly discriminate, and I actually think that the blockchain space is very unique — people try to be as inclusive as possible but it just so happens that a lot of these little implicit things add up and definitely make it a lot harder for women. That’s where I think initiatives like She(256) are bridging the gap.”

The area of trading is, too, dominated by men. When you’re picturing a cryptocurrency trader, it will most likely be a male. This stereotype might change in the coming years as the media and survey agencies report a growing number of women engaged in this activity or planning to do so. For instance, London Block Exchange reported a doubled number of women thinking about investing in cryptocurrency in just half a year (2019). Another last-year survey by Grayscale shows 43% of female respondents were interested in Bitcoin investments. Kiana Shek, co-founder of DigiFinex exchange, tells that women can set higher standards of ethics for digital exchanges.

The cryptocurrency market still has a lot to learn when it comes to gender diversity. A regular crypto investor or a person who is otherwise engaged in the sphere should stop assuming that this market is a men-only territory. Just like in any other industry, human resources departments should avoid any gender-based biases when looking for a new employee. The growing number of educational programs for new programmers may bring more women into the sphere. Ultimately, it’s a matter of societal preconceptions that must be challenged on a regular basis.

What Are Bitcoin Futures?

Our series of educational materials on cryptocurrency continues, and in this text Mercuryo will explain what Bitcoin futures are and tell about the major events surrounding this topic.

Futures (or futures contracts) in general allow to buy and sell assets or currencies at a specific time in the future. This greatly helps market players who want to work with volatile assets without any unforeseen events. For instance, an individual investor wants to sell his Bitcoin funds for $7000 a year later, and a corresponding futures contract gives an opportunity to do so while not bothering about the price dynamics. Somebody else may want to buy Bitcoin at a price of $5000 several months after the contract is created — and again, no price fluctuation can influence the sum stated in the contract. The main advantage of Bitcoin futures in comparison to regular Bitcoin trading is that futures, being only derivative contracts with Bitcoin as an underlying asset, are available to a wider range of investors.

Futures contracts for Bitcoin appeared in 2017, when the hype around cryptocurrencies was at its peak. That year, market observers waited for the launch of futures on two major traditional exchanges — the Chicago Board Options Exchange (CBOE) and the Chicago Mercantile Exchange (CME Group).

CBOE was the first exchange to launch Bitcoin futures on December 10, 2017. At the time, the price of Bitcoin has jumped from $14,500 to $16,970 which was immediately connected to the event by news reporters. CME Group followed CBOE on December 18. The launch on CBOE was commented by its head Edward TIlly: 

“If Jamie Dimon would like to take the other side of our long, that’s great. We’ll provide a marketplace for him to do so.” 

It was a reference to JPMorgan Chase CEO Jamie Dimon’s negative opinion on the most capitalized cryptocurrency. When you want to ‘long’ an asset, you buy it (often to sell later), and when you ‘short’ an asset, it’s vice versa – you sell it.

What was the key difference between CME and CBOE futures? The source of Bitcoin price. The contracts offered by CBOE used reference prices from Gemini, a cryptocurrency exchange owned by the Winklevoss brothers, a prominent entrepreneurial duo. On the other hand, CME futures used six different cryptocurrency exchanges at the time of introduction. 

For a large part of crypto investors, futures on CME and CBOE made it seem that now Bitcoin will only continue to grow. This, however, did not happen and the infamous price collapse at the beginning of 2018 might be connected to Bitcoin futures too. This interpretation was suggested by the Federal Reserve Bank of San Francisco (FRBSF) in a report dating back to May 2018. Experts conclude that the launch of Bitcoin futures actually gave a leverage for bears – traders who believed Bitcoin’s price is over-exaggerated. Turns out Jamie Dimon wasn’t the only one who would short Bitcoin after all.

Despite this alleged negative influence and the closure of BTC futures contracts on CBOE in March 2019, recent reports tell that the aggregated open interest (OI) for Bitcoin futures has surpassed $5 billion on February 13, 2020. As seen from the motion at the time of writing (February 2020), the price of Bitcoin can be relatively high even when the opportunities to bet on its downfall are available. Another exchange where you can have a Bitcoin purchase or a sale at a specific time in the future is Bakkt, a platform subsidiary of the Intercontinental Exchange which owns the New York Stock Exchange. Large crypto exchanges OKEx and BitMEX have also added Bitcoin futures to their list of trading opportunities. NASDAQ, perhaps the world’s most famous exchange, was reported to review the same idea in the past.

Crypto derivatives are now a new normal and are likely to fulfill the needs of many conservative investors who will under any circumstances not go outside regulated exchanges. For this reason, it would not be right to assume that there is no need for derivatives when you can trade Bitcoin directly. The launch of Bitcoin futures on more platforms may eventually result in a more balanced market where bullish traders who pump up the price are not prevailing over bears. This, in turn, will make Bitcoin less volatile and it will become what it’s anonymous creator envisioned in the first place – a cross-border payment tool.

KYC or not KYC?

How frustrated you feel when you have to go through passport control and security check at the airport? I bet you casually pass, present your passport while browsing your phone or thinking about what to buy in Duty-Free. 
Because this has become a routine like 20 years ago and many of us don’t remember the way it was before security check was introduced.

So why pretty much the same KYC check still causes frustration to many users? The quick answer is because it is relatively new.

Cryptocurrency has been around for a decade. It quickly went from digital currency only known to a bunch of geeks to the billion-dollar industry.

If we speak technology-wise for the past 10 years we went from iPhone 4 to iPhone 11, from numeric passcode to facial recognition, from traditional banking to fully digital.

Which means the progress is inevitable and technology development is unstoppable. Same applies to cryptocurrency. If we want to see mass adoption and official recognition of digital currencies we must accept the fact that crypto will go nowhere without KYC and ALM procedures.

Many frustrated crypto enthusiasts would now rise and object, bringing up the original vision of crypto as anonymous non-regulated money. We won’t argue with this vision, any major innovations in finance, music and even fashion used to be rebellious at some stage. But rebellious means available to a limited circle of followers, which conflicts with the idea of mass adoption. Majority of people would prefer safety and stability when it comes to finance. And KYC is one of the steps to the safety of your funds.

Here are some facts that will help you to stop seeing KYC as a total frustration and learn more about what happens when you pass verification with Mercuryo.

How does the regular crypto exchange user benefit from KYC?

If you use your bank card to buy crypto KYC verifies if the card is being used by a legitimate owner. There’s no secret that there’s a huge dark market where stolen card details are sold in bulk. Hacking the 3 digit code on the back of the card is also not a problem for skilled criminals. This way verifying a cardholder’s name against the government-issued photo ID is a measure to protect you from the illicit use of your lost, stolen or compromised card. This is why we imposed the 72h time limit for crypto withdrawal for non-verified users. In case the card was stolen and used by fraudsters 72h is normally enough for a legit user to call the bank and protest the transaction.

If you lose access to your Mercuryo account there’s a way to restore it if you passed the full verification before. Don’t be like Peter Schiff.

A verified user is entitled to extended limits up to 2000 EUR daily a 15000 EUR monthly and no time limit for withdrawal of crypto.

KYC also performs checks against all known blacklists and databases to eliminate the apparent criminals, terrorists, money launderers and fraudsters. You don’t want to use the service along with criminal do you? It’s pretty much like passport control at the airport. No one wants to be on the same airplane with terrorists.

What happens to my data?

This is quite a legit concern given that even major cryptocurrency exchanges suffer from information security breaches now and then. Like the recent case when Binance users’ info (including selfies with the documents) was leaked and have become available to the entire Internet.

Mercuryo team spent about 6 months adjusting all of the infrastructure and internal procedures to pass the toughest PCI DSS information security audit. PCI DSS stands for Payment Card Industry Data Security Standard developed by the Security Standards Council and adopted by industry giants such as VISA, MasterCard, AmEx.

The standard was set up to help businesses to process card payments securely, protect sensitive to fraudulent activities cardholder data and reduce the risk of stealing. This achieves through imposing tight control measures surrounding the storage, transmission and processing of cardholder data that Mercuryo handles.

KYC shouldn’t be an issue or stop factor for a regular user with no criminal intentions. Most KYC applications got approved within 10–15 minutes.

Stay safe and make sure you only use services that take your information security seriously.