Graft is universal payment platform which is based on blockchain technology. Therefore, it has features of both cryptocurrency, which forms the underlying system that securely and privately registers payment transactions, and decentralized point of sale, which authorizes payment transactions in real time and allows merchants to accept payments and receive payouts not just in various cryptocurrencies but using traditional methods such as credit and debit cards. For consumers (buyers), Graft wallet provides a secure and untraceable method of payment using multiple cryptocurrencies and fiat currencies.
Unlike most crypto payment systems, and similar to traditional credit/debit card processing, Graft payment is divided into two phases: authorization and settlement. Like in credit/debit card world, Graft authorization happens in real time (hundreds milliseconds to a few seconds, depending on various conditions), while settlement is performed later on, usually within 2 minutes (compare to several hours and even days in traditional payment networks).Although there are cryptocurrencies with block (settlement) interval less than 2 minutes, there is no specific reason to reduce it, especially with Graft built in “always on” real time authorization system. First, very short interval complicates the block generation and PoW process, as a lot of supernodes must communicate each other and agree on the new block, so with very short interval the network latency will start affecting the process. Second, reducing the interval still does not resolve the real-time authorization (“instant confirmation”) problem. Even with 30 seconds interval, it is still too long for real time payments (credit card authorizations are in a range of hundreds milliseconds to a few seconds), not to mention the fact that 1 confirmation (1 block) is still not enough to mitigate the risk of fork for significant amounts. So special additional technology is still required to resolve the real-time authorization problem. Graft resolves this problem by implementing a scheme called authorization sample, which is a group of supernodes that is selected by special Proof of Work/Proof of Stake algorithm from a larger pool of candidates.
The supernodes in authorization sample must match several criteria in order to prove their loyalty to the network:
Must be an active miner – solve at least one block within last 1440 blocks
Must maintain a collateral (“stake”) deposit account with 1000 graft
Must be “always on” (99% of the time within last 48 hours)
Must have a public IP
The authorization sample supernodes validate the transaction and guarantee that the buyer cannot spend the same money more than once until the transaction is settled (added into the block which is written into the blockchain). The settlement is performed by the mining part of the supernode within 2 minutes.
First of all, untraceability is not a feature of any cryptocurrency. As of today, CryptoNote is perhaps the only protocol that enables full privacy and untraceability. The beauty of Cryptonote is that it hides the details of transaction while still preventing double-spending. This is achieved through the use of key images. The key image is the unique “fingerprint” that represents the spending address and amount without disclosing any details about the buyer or the amount. By providing the key image for upcoming transaction to the network of supernodes, the buyer’s wallet will temporarily “lock” its “account”, so no other transaction with the same key image can happen until the “locked” transaction is settled or the lock is removed. If the buyer will try to finalize the transaction with the key image different from the one used in the original lock, such transaction will be rejected by the supernodes. On the other hand, the key image does not contain any information about the buyer or buyer’s wallet.
In additional, any traces of communication between the buyer (wallet app), the merchant (point of sale app), and the supernodes (selected relay and sample supernodes) during authorization phases are completely removed once transaction is settled (written into the blockchain).
No, because Ripple does not provide the privacy and untraceability that are demanded today by potential Graft users – both buyers and merchants. When we pay with credit card, we share our secret payment information (like credit card number) with some entities – the merchant, the issuing bank, the payment processor, the payment acquiring bank – but those entities are relatively trustable so they try not to share our secrets with the entire world, and no one else can see our transaction history without our or their permission. Oftentimes, however, they fail to keep our secrets (think Target and many other retail mega breaches). With Ripple or Bitcoin or most other cryptocurrencies that are not based on CryptoNote protocol, the story is exactly opposite: there is no central authority that “knows” our secret “card number” (private key), but at the same time anyone in the world can trace our payments on the blockchain and link them to our identities with minimum efforts. By Implementing CryptoNote and other features, Graft brings the level of untraceability of payment history similar to traditional credit and debit card system, while adding decentralization, privacy, and security, which are the features of any cryptocurrency that are absolutely impossible to achieve using traditional credit card payment technology.
There are multiple elements of the Graft user wallet:
Private spend key – secret – required to spend money; stored in the wallet app
Private view key – “semi-secret” – required to see the balance and previous transactions
Payment address – public – required to receive money
In Graft, the Private spend key is always stored at the client (wallet) and never shared with the supernodes. Therefore, it is not the same as credit card when you share you card account number with the merchant, payment processor, and the bank every time you make a payment. If one of them is breached, you credit card can be stolen and used to make fraudulent payments. If any or even all supernodes are “breached”, they don’t have your private spend key so no one will be able to “use” your Graft account.
The Graft wallet balance is a “hidden” set of previous transactions. It is calculated by scanning all the previous transactions which are stored on the public blockchain but invisible without view key. Since mobile wallet app does not have direct access to the blockchain, the private view key is temporary shared with a single relay supernode in order to retrieve the wallet balance; the supernode will not store this view key in any database so even if it’s “breached” the view key will not be disclosed in most cases. However, even if the view key is disclosed, it only allows to see transactions, not to spend any money.
Users (either buyers or merchants) with higher requirements for privacy can host their own private supernode with full copy of blockchain. This way they will never share their view keys with the random “foreign” supernodes. Most probably, due to limited processing power and other resource limitations, such a private supernode will not be able to participate in transaction processing and earn any rewards or transaction fees, but it will still be able to validate transactions and view balances privately by scanning the local copy of the blockchain. For users who cannot or don’t want to host their own supernode but still don’t trust the entire network, Graft creates a special (free) cloud service with trusted supernodes that are protected by multiple levels of security.
Ripple consensus protocol is different, and its main problem is that it does not provide privacy features: untraceability and unlinkability of payment transactions. Unlike Graft blockchain, all transaction information on the Ripple ledger is public. Another difference is faster payment confirmation by Graft supernode authorization sample, a process that is more similar to Dash masternode scheme. Unlike Dash masternode, however, Graft supernode is not a “wrapper” or a second tier as it is designed to be a monolithic code base that implements both real time authorization and blockchain settlement (mining) features. Such an architecture improves security of the real time authorization process, as payments cannot be settled “off supernode chain” by the “lower” level blockchain network nodes, without supernodes knowing about their existence. Thus, all Graft transactions are authorized instantly without requiring additional fee. Also, thanks to underlying CryptoNote protocol, all Graft transaction records are untraceable and private. Another difference is the algorithm of authorization sample selection which is based on combined proof of work and proof of stake.
There are several major differences between Graft and Dash, but all of them are focused on the Graft’s mission to be as close as possible to the “real world” of retail, hospitality, gas stations, convenience store, or restaurant payments.
Dash’s InstandSend is an optional feature, which is implemented on top of the blockchain network protocol as a 2nd application tier. Therefore, Dash transaction can be processed in two ways: InstantSend authorization or “regular” send. If InstantSend fails for any reason, transaction is sent through the regular slow path. Such a scheme is not acceptable in the “real world” of payments. In order to “compete” with the dominance of credit cards, crypto payments must be always approved instantly. Unlike Dash, Graft real time authorization is a built-in feature: all Graft transactions are approved in real time, within a range between several milliseconds to a few seconds, depending on the merchant settings. Thus, both online and brick-and-mortar merchants and their customers can always rely on Graft real time authorization.
The buyer is required to pay an additional fee in order to process the payment faster using InstantSend. Graft transaction is always approved in real time, and such approval does not require any additional fee. A small symbolic flat fee is paid by the merchant (similar to the credit card fee in the “real world” but significantly lower), which enables an an adoption of Graft for micropayments. Like in the world of traditional payments with credit and debit cards, the buyer (sender) does not care about the fee rate or complexity of the fee structure, which allows much higher conversion rates and better buying experience.
Dash has another optional feature called PrivateSend which also requires additional configuration efforts and extra fees from the sender (buyer). Unlike Dash, which is based on Bitcoin code, Graft is based on CryptoNote protocol and Monero code, which provides incomparably higher level of privacy, untraceability, and unlinkability of transactions, right “out of the box”, without any additional actions or fees required from either buyer or merchant. Thus, each payment on Graft blockchain is “visible” only to the buyer and merchant involved in this particular payment, just like in the real world of credit card payments, or in fact even better as there is no central authority in between.
Unlike Dash, which is mainly a cryptocurrency with some optional features, Graft is an open payment platform that allows merchants to accept various methods of payments such as other cryptocurrencies and credit/debit cards. Different merchant payout options in altcoins of local fiat currencies will be also available through Graft point of sale app and Graft service brokers. Graft wallet users can also instantly exchange other cryptocurrencies or fiat currencies as part of the payment transaction.
Graft payment processing flows and transaction types are atypical for cryptocurrencies but very usual for the brick-and-mortar and ecommerce merchants; those flows have been designed to allow an easier adoption by the mainstream merchants and consumers, without the need for any centralized intermediaries (payment processors) which defeat the basic principle of cryptocurrencies – decentralization.
Unlike other cryptocurrencies that provide a single wallet app, which is typically used for both sending and receiving payments, Graft separates those functions, just like in the “real world”, between buyer’s wallet app and merchant’s point of sale app. So the users with different interests will never be confused by the “opposite” features they never use, such as top up in the wallet or payout in the point of sale.
And finally, the network of Dash masternodes is based on Proof of Stake, while Dash miners still use Proof of Work. The owner of each masternode is required to pledge 1000 coins (~ $200,000) in order to be able to perform InstantSend or PrivateSend. Unlike Dash, all Graft blockchain nodes are both instant authorizers and miners, and so they earn their right to issue real time payment approvals by successfully mining blocks. Thus, both real time authorization and mining are enabled by Proof of Work, which makes the whole system more fair and secure.
Yes, Graft is mineable. Unlike most cryptocurrencies, Graft consists of supernodes that process two-phase payment transaction, just like “traditional” credit card payments: real time authorization and settlement (mining). Also, supernodes may host additional brokerage services such as credit card authorizations, instant exchanges, and merchant payouts. Supernodes receive mining reward for each solved block, but they do not earn transaction fees from mining. Transaction fees can be earned by processing real time transaction approvals. Supernode is allowed to participate in real time authorization process only after successfully solving a new block.
Traditional credit and debit cards are accepted by service brokers which are hosted by Graft supernodes as network “plugins”. The supernode network is fully decentralized organization. The service broker, including credit card acceptance broker, is a distributed gateway which has an owner who complies with all necessary regulations. In addition to default “reference” implementation of credit card acceptance broker created and maintained by Graft Foundation, there will be multiple third party implementations that offer similar competitive services. Thus, technically, a single credit card acceptance broker is not fully decentralized service but it is running on decentralized, distributed, and diverse service platform.In addition to traditional credit and debit cards, Graft is designing and implementing its own crowdfunded credit card eco-system which will be fully decentralized.
Many payment networks such as ACH or PayPal provide free transfers between user accounts which create a huge incentive comparing to cryptocurrencies, which charge users unproportional fees regardless the speed and amount of transaction. This feature is perfectly suitable for transactions with low speed requirements, such as funds transfers between family accounts or remittance of employees’ salaries. In order to be able to compete with traditional payment networks, Graft provides limited free transfers between user wallets.Bitcoin and most other cryptocurrency networks usually cannot “afford” free transactions for three major reasons:
Lack of incentive for miners
Threat of DOS attacks
Uncontrolled growth of blockchain
Graft resolves the first problem by logical separation between payment and transfer, so supernodes (miners) receive transaction fees for instant payments which constitute the majority of all transactions, while free transfers are processed “on the background” with lower priority.
The second problem with DOS threat is resolved by voluntary user identification and authentication. Of course, there are no free lunches, so the users should “pay” by providing their identity to the network to ensure the reasonable use (by limiting the number and frequency of free transfers per user) and prevent the network abuse. However, using zero knowledge proof authentication technology will allow users to prove their identity without compromising their privacy.
The last problem with uncontrolled block size growth is resolved by a complex of measures: small block interval, unlimited block size, and standard restricted transaction size for particular transaction types such as free transfer. In addition, one of the sides of the free transfer must prove that they contributed to the network by conducting “commercial” payment transaction types in the past.
We call it supernode because it performs more functions than “traditional” network node, and there are different requirements for supernode owners. Yes, Graft blockchain is open and decentralized, and anyone will be able to run a supernode, but there are different levels of supernode and different conditions (and rewards) associated with each level.
Proxy Supernode is the “entry level” – everyone can install the supernode software and host Relay supernode. The only requirement is public IP, but this can be achieved even with home network. Proxy supernode does not mine or provide services, but it can be useful for several purposes; for example, as a trusted relay for those who have highest privacy requirements, so they can host their own “wallet server”, or for large merchants as a “store server” for even faster transaction processing.Miner Supernode can generate revenue by earning block rewards. The only requirement (in addition to public IP) is higher computing power required for PoW mining. Miner supernode is the last step before the next and highest level.
Full Supernode is both miner and service provider. It cannot perform its instant authorization functions or service brokerage (credit card acceptance, for example) without mining. In addition, performing Full functions requires a stake – collateral balance associated with supernode address. Hence combined PoW/PoS. Miner supernode can mine without a stake but it won’t be able to provide services, i.e. it won’t be able to earn transaction and service fees. Note that Graft miner does not receive transaction or service fees, only block rewards. Transaction and service fees are only paid to Full supernode that mines, has a stake, issues instant approvals, and hosts network service brokers.
Yes and no. They are competitors just to the single feature of Graft blockchain – spending debit card – which is just one of the ways Graft is going to enter the mainstream payments. We think about both sides of typical payment transaction: buyer and merchant. Tenx only cares about the buyer, which is definitely important. But what about merchants who want to accept both traditional payments (such as credit/debit cards including tenx) and cryptocurrencies? In order to do that, today merchants must maintain multiple point of sale, payment terminals, and wallet apps which is very impractical. Graft point of sale app accepts both cards and crypto, and convert payouts (payments for proceeds from purchases) to local fiat currency if needed. Another important point – Graft CryptoNote-based blockchain is absolutely private: sender address, recipient address, and transaction amount are encrypted on blockchain and therefore hidden from public view. On top of that, Graft adds private transaction fees which are visible to blockchain reviewers in all existing CryptoNote implementations.