New Crypto Startup Aims to Replace Automated Clearing House (ACH) in an Anonymous White Paper
We could soon see a new system ready to replace the entire U.S.’s Automated Clearing House (ACH) network. The founder of different blockchain-related startups, Taariq Lewis, explained that they are working on a new project based on an anonymous paper.
According to the email sent by Lewis to CoinDesk, they have received a copy of a white paper from an anonymous person. They do not know who wrote it, but ‘it looks interesting.’ Apparently, this paper could help replace the ACH network that has been several times targeted by the blockchain and crypto world in different occasions.
This system allows credit and debit payments from individuals, governments and businesses to be processed. In 2017, it handled over $47 trillion dollars. The task to replace it seems to be very challenging.
The white paper that Lewis mentions is titled “Promise. A Decentralized, Peer-to-Peer, Proxy Repayment Protocol,” and is dated August 7. Yoshiro Shinji seems to be the author of the paper. According to the author, Yoshiro is proposing a protocol known as Promise. Although it does not seem a coincidence, Lewis said that he was working on a stealth project titled Promise.
Lewis, the CEO of Promise, and his colleagues Alan Szepieniec and Giuseppe Ateniese, say that they were not those who wrote the paper. Szepieniec is a researcher at the Catholic University of Leuven and Ateniese is a professor of cryptography at the Stevens Institute of Technology. Both of them work at Promise, Szepieniec as chief scientist and cryptographer and Ateniese as an adviser.
At the same time, these three cryptocurrency experts and enthusiasts decided to reveal their ACH replacement on October 31, the same day of the 10th anniversary of the Bitcoin white paper. In a new paper published by the startup, they will bring ACH payment capabilities to the blockchain. As per the team, the official launch of this network is going to happen between 2019 and 2020.
However, there is an issue. At the moment, it is not possible to initiate some transactions automatically. Even if they are recurring and predictable. Although it is possible to schedule a payment for later, it is necessary to lock the coins up in advance, which creates a less automated system.
Promise’s proxy ahs a re-signing technique that would allow businesses to outsource payments to third parties. This is something similar to what they do in the fiat world using third-party payment processors. In this way, it is possible to save time and money.
He then says that other networks such as Ethereum could offer similar solutions that might not be applicable.
“I would literally need to write that private key into the smart contract and then the smart contract would run that transaction with my private key into the payment that you had directed. So yes, you can do this with smart contract, but then you have to expose the private key in the software for that to run.”
As mentioned before, the other option that can be used is by locking tokens for future payments. However, companies use short-term commercial paper and depend on their cash flows to keep up with these payments.
The data structure that is being built by Promise allows a user to outsource a payment authorization to another, something that is called a ‘pledge.’ Promise uses a technology inspired by Mimblewimble, which is a project that aims to improve Bitcoin privacy protection. Additionally, Promise aims at offering a privacy solution to businesses, since no current privacy-focused coin offers these features to businesses.
And if all these improvements were not enough. They are also planning to add quantum resistance. Although the real implementation of quantum computers is far from being a reality, they pose a serious threat to the current signature scheme in cryptocurrencies, including both Bitcoin (BTC) and Ethereum (ETH).
Lewis explains that they are building a chain that is not going to be used in the coming two years, but instead in the next 10 to 20 years. That means that the network will have to be quantum resistance if it wants to succeed. Nevertheless, to use quantum-resistant privacy, the Promise team will have to create massive signatures. This means that Promise block s will have, perhaps, 50 megabytes.
Additionally, Lewis says that is is a supporter of the Bitcoin Cash (BCH) community and that blockchain sizes should increase to be able to face a post-quantum world.
In addition to these developments, the startup is also thinking about creating an open and public blockchain that would be secured using the proof-of-work (PoW) consensus algorithm. In general, these PoW networks tend to be used by everyone, including companies and non-reputable participants.
By creating a public blockchain, users would be able to build an online credit reputation as well as control access to their payment history.
“Public blockchain also means more competition for financial services,” he said. The technology will also lead to lower prices.
Moreover, they will be pushing for ‘green mining’ activities since there are several negative effects on the environment caused by Bitcoin mining activities around the world. Lyra Protocols, the older name of Promise, partnered with the manufacturer of mining hardware Obelisk in order to develop mining equipment specifically designed for this blockchain.
The main intention is to avoid larger participants in the mining industry, such as Bitmain, to dominate the network at the very beginning. Although Lewis did not comment which other companies are working with Promise, he informed that they will be delivering specialized miners before the launch of the official protocol.
This is the project that Promise has built during the last months and that is related to an ‘anonymous’ white paper. Whether this would be able to change the current ACH network is another question.