Note: The original post on Medium can be seen here
Decaf — mobile ordering and payment with crypto
Crypto is now ready for real world payments
What is Decaf?
Decentralized café (coffee in Spanish) a.k.a. Decaf started as the idea to be able to buy coffee with crypto.
However, not just coffee — but to be able to pay for everyday things in the “real world” — like food or drinks at a restaurant or cafe or even groceries.
Imagine going to a restaurant or store, scanning a QR code with your phone to get a web-based menu or item list, then touching the items to select your order and at the click of a button paying with cash, card, and with crypto.https://medium.com/media/5362d2c4f3a7df180a8fa3203850b317/href
For cafes, restaurants and businesses we will facilitate more high value human interactions/customer service by removing transactional things like writing down orders, entering it into terminals, splitting bills and taking payments.
Currently our team is a part of HF0 Miami which is a world leading Web3 engineering/hacker focused accelerator. The team will be living and hyper-focused on building and executing the vision of bringing utility and accessibility to alternative banking solutions through blockchain.
Vision: Bring utility to crypto in Latin America
The big vision is to bring utility and accessibility to crypto, focusing on Latin America. This is the continent with the highest use and adoption of crypto in the world. Crypto forms a very strong value proposition due to the unique mix of:
- Unstable governments
- Inflationary and unstable currencies (eg. 2,177% inflation in Venezuela)
- Inaccessible banking solutions (low banked population)
- High smartphone usage
After living in Latin America for years it was clear that crypto being decentralized, a store of value, borderless, and accessible was not just a nice to have — it was a real need to have (I’ll write more on that in my next article).
Currently crypto is lacking real world payment utility
Latin America are leaders in crypto and will drive the utility of crypto and blockchain as a form of payment for real world things. It already has the highest adoption of crypto in the world, and is primed to be the global leader of payments for real world utility.
Not only does Latin America have the highest adoption within its population, but also Governments are much more open to the use and recognition of crypto as a valid form of currency. El Salvador was the first country in the world to make Bitcoin legal tender, and Mexico and Brazil looking to head the same direction and is on the list to adopt Bitcoin.
Should blockchain tech be used as an alternative payment solution?
At the end of 2017 I was exploring the Ethereum network to create an ICO. At the time, I was excited about the promise of crypto a borderless, bank-less exchange without any middle man and therefore will have extremely low costs. No banks needing to profit through spreads or fees. I felt that if crypto were to gain utility, you would not even need to exchange for fiat currency to be useful. Perhaps, it could become the global/borderless currency for all? It had the potential to completely change the world and banking as we knew it.
Then, I tried to purchase a Crypto Kitty on the Ethereum network and saw that the transactions had “gas fees” which were incredibly high, perhaps 100x higher than the cost of a typical Wise FX transfer or 10x more than a bank FX exchange (which are already unfairly high transactions). Today, Ethereum’s gas fees are even higher because of a more congested network.
Disappointingly, I came to the realization that cryptocurrency/blockchain tech was not ready for borderless transactions and real life utility.
This meme highlights this point clearly.
However now, 4 years later in 2022 , and particularly with the introduction of newer Blockchains with low transaction costs, specifically Solana — Crypto and Blockchain technology is now primed to provide utility as an alternative payment method.
Solana blockchain — the best payment technology?
The cost of a payment transaction with the Solana Blockchain is now significantly lower, and as the head of Solana’s product described, “it will be fractions of a cent committed in four hundred millisecond block time, which is the fastest across all the blockchains”. Its transaction cost averages just $0.00025.
Additionally, when comparing Solana to digital payment systems Visa/Mastercard, there is a clear value add:
- Solana can handle 65,000 transactions per second
- Visa can handle 24,000 transactions per second
- Doing a transaction on Solana costs $0.00025
- Doing a transaction on Visa or MasterCard generally costs about 1.5–2.5% of the total transaction value
In terms of speed and transaction cost of Solana really makes it perfect for payment utility vs the more legacy blockchains - Ethereum and Bitcoin. Even Bank of America in its research has published that it is “the visa of digital assets ecosystem”.
It is not just blockchain performance that matters. Perhaps even more importantly, is that recently Solana has become the largest active developer community of the blockchains. We believe this may be the best indicator of the roadmap and innovation in the Solana ecosystem. New developments like Solana Pay, and Anchor are really helping to drive the technology and developer community/experience forward.
Environmental impact matters, and so far Solana seems to be far more energy efficient than other digital payment methods or blockchain.
Because of this, blockchain and crypto have become tools that are now ready to have real world utility to be used for payments, and this is what Decaf will provide. However, other than just utility, we will provide accessibility to alternative banking solutions.
Additionally, we are looking at Bitcoin solutions that are leveraging the Lightning Network as this is a solution that allows for Bitcoin transactions to be taken off the Bitcoin network and become practically cost free. This is the technology that is currently being used for payments in El Salvador. We will be looking to integrate Bitcoin payments on the Lightning network as well.
Accessibility to crypto will drive the future of financial inclusion
We see a world where banking solutions are completely accessible to all, and that crypto and blockchain will deliver this with the help of Decaf.
We believe that accessibility to crypto payments and the blockchain is perhaps the most important element of our journey and execution. That is why we plan to make crypto/cash exchanges at every corner.
More on this in the next article… Read here.