KuCoin AMA Series - COTI - Full Transcript
(UTC+8) 18:00:00, June 3rd, 2019, KuCoin hosted the AMA(Ask-Me-Anything) session with KuCoin Spotlight project - COTI in the Official English Telegram Group, the Official Vietnamese Telegram Group and the Official Chinese Telegram Group.
The AMA session was composed of 2 sections: 1. Q&A from KuCoin 2. Q&A from audiences.
Introduction of COTI
In an era of “everything digital” currencies remain outdated. Currently, it’s cheaper to pay in cash than to use banks, PayPal, Alipay and the like. COTI is the first enterprise-grade fintech platform that empowers organizations to build their own payment solution and digitize any currency to save time and money
Official Website：https://coti.io/
Official Telegram Group：https://t.me/COTInetwork
Whitepaper: https://coti.io/files/COTI-technical-whitepaper.pdf
Introduction of Guest
Shahaf Bar-Geffen, CEO of COTI
Shahaf is the co-founder and former CEO of WEB3, a leading multinational digital marketing firm. Shahaf holds a BSc degree in biotech and economics from Tel Aviv University.
Dr. Nir Haloani, CTO of COTI
Nir is an innovator in the areas of data compression, AI and machine learning and has earned the prestigious Master Inventor title for authoring over 13 patents in these fields.
*For ease of reading, some text has been deleted
Section I - Q&A from KuCoin
KuCoin: Welcome to KuCoin AMA session! Nice to have you here, Shahaf and Nir! Please briefly introduce the COTI project, the team members, the vision of the project and the problems to be solved.
Shahaf: Hello everyone, I’m Shahaf Bar-Geffen, COTI’s CEO.
When I first joined COTI, I was an early investor and part of the board of advisors. I was a co-founder of successful companies in my past and have two exits, so for me it was natural that a few months later I was asked to take the helm as CEO. I was impressed with COTI’s vision and promise in solving real world issues, so I came onboard and haven’t looked back since.
Here with me is Dr. Nir Haloani, COTI CTO.
Nir: Hi Everyone, I’m Dr. Nir Haloani, COTI’s CTO. I’m a math PHD from Israel’s top institute, hold 14 patents, sold a company to IBM and was their head of research.
I was first attracted to COTI mainly because of blockchain’s technological challenges and because it takes a holistic approach to solving fundamental problems in today’s payments landscape. I was an early Bitcoin adopter a few years ago and maintained small mining networks for experimental purposes. I was looking for the right opportunity to join a company which could tackle the challenges faced by traditional cryptocurrencies and deploy solutions that could be of use and be adopted by the mainstream.
Shahaf: COTI's 30+ people team is built from highly experienced individuals, who previously held positions at IBM (former head of research), Ripple (former CRO), Blackrock (former CIO), Investec bank (former CEO), Alipay Korea (former CEO) as well as cryptographers from Israeli elite army intelligence units.
You can read more on our team at this link https://coti.io/team.
Today we will be presenting you COTI - the ultimate blockchain for payments and stable coins.
By the end of this AMA, you’ll see that COTI has the following advantages:
1. Our own Mainet, built on our Multi-DAG protocol with a new type of CONSENSUS (PoT) that is mathematically proven to do 100,000 TPS
2. That we already have early adoption and that we are generating revenues, unlike 99% of the projects out there
3. That we have an Experience team with previous exists and credentials from top institutions
4. That we have built Strong global partnerships
5. And that we have Excellent token metrics and liquidity support
COTI’s vision is to become the first enterprise-grade fintech platform to allow organizations to build their own payment solution and stable coins to save time and money. It allows to companies around the world to build their own version of “AliPay” easy and cheap.
We are based on a very unique Multi-DAG protocol and have created a new type of consensus (PoT) that has been mathematically proven to do more than 100,000 TPS.
KuCoin: Why does COTI choose to join KuCoin Spotlight?
Shahaf: We think IEOs are highly effective in generating global recognition, market exposure and community development. The most obvious reason for holding an IEO in this advanced stage of COTI’s roadmap is to ensure an effective launch of our coin. It will enable us to amplify our community base and to generate greater visibility and liquidity measures. We have partnered with KuCoin as KuCoin is one of the largest global exchanges, with more than 398 live markets listed on CoinMarketCap, which translates to 398+ cryptocurrency pairs trading on the platform.
In the long term, the best possible outcome for COTI will also be the best possible outcome for KuCoin and its client base.
KuCoin:If many merchants issue their own tokens and establish their own payment system, will the use value of COTI token be weakened?
Nir: Every merchant that issue a token actually makes the COTI coin stronger. There can be thousands of tokens in our network but only one COTI native coin that grows in value as the usage grows, as any merchant that wants to issue his token needs the COTI coin. Native COTI coins are not price-stable and are needed to operate the COTI network. Native COTI coins are used by merchants, node operators and more to pay network usage fees.
KuCoin: What is the role, significance and value of COTI token in the whole ecology? Does it have price support?
Shahaf: The COTI native coin will be used as a common means of payingment for all the fees and staking inside the COTI ecosystem and is part of the network’s adoption strategy and incentivization model.
To attract more system participants, users will be incentivized by running nodes and by serving as arbitrators in COTI’s buyer-seller protection system.
There are several reasons for having a native coin:
1. The COTI native coin is similar to Ethereum gas and is used as a means to collect and distribute fees in the network.
Because of this, the COTI native token will always be in demand, which will only make it stronger.
2. Adoption strategy - node operators and arbitrators in the system are compensated for the work (transaction confirmation) in COTI native coins. The ability to have one token which is not dependant on the use case of each token in the system and reflect only the network value itself is mandatory.
3. Node operators and arbitrators do not want to handle hundreds of tokens sent to them as fees and asses each token’s profitability. So having one unified token which reflects the network itself is required.
Regarding price support, we understand that many IEOs have failed their contributors post IEO with regards to supporting the liquidity and stability of token prices. Having previously raised $15m USD, we are one of the few projects that has the resources to invest heavily in top tier liquidity provider services. This will ensure liquidity and token price stability, while supporting our token holders — not only post IEO but long into the future.
KuCoin: Will the project side intervene in the price and trend of COTI token?
Shahaf: We understand that many IEOs have failed their contributors post IEO with regards to supporting the liquidity and stability of token prices. Having previously raised $15m USD, we are one of the few projects that has the resources to invest heavily in top tier liquidity provider services. This will ensure liquidity and token price stability, while supporting our token holders — not only post IEO but long into the future.
Section III - Q&A from Audiences
Q: If coti tokens locked for 6 month, can I run node at this time?
A: Yes, you can! You don't need to stake COTI to run a full node
Q: What is the meaning of COTI? How you choose this name?
A: COTI stands for Currency of the Internet. The original idea was to have a single, unifying currency that could be used anywhere around the world.
Q:Are there any opportunities for developers to work with you?
A:Yes, our code on Github is open source and we welcome the community of developers to work it. We have a discord group for developers too.
Q:The COTI Arbitration Service is a true stand-out given this is nowhere present in other block chains. If this arbitration service picks a juror from its large pool of highly trusted network participants, our questions would be as follows; will the chosen jurors be getting anything in return for the service? How fast do you project each arbitrary and disputes to be settled with this service? And lastly, are there any costs of filing disputes?
A: COTI’s Arbitration Service is a decentralized application built atop the COTI Trustchain that works as a decentralized third party to arbitrate disputes between buyers and sellers. It relies on game theoretic incentives for jurors to correctly rule cases. The result is a dispute resolution system that renders ultimate judgments in a fast, inexpensive, reliable and decentralized way.
Q:Are you planning to list on other exchanges?
A:We are already in talks with several other exchanges. Although we cannot comment on specific arrangements, our aim is to have the COTI token trading on several top tier exchanges within the first few months.
Q:Does COTI allow public participation on running nodes? I mean, I would like to run a node for COTI.
A:Nodes can be run by all users. Full nodes are easier to operate and don’t require staking or high Trust Scores. COTI coins are not required to run Full Nodes. However, COTI coins are needed to run critical nodes in our system like the DSP Node and Trust Score Node.
The minimal requirements for running a Full Node are:
16GB of memory
4vCPUSs cores
Estimated costs for running such an instance on AWS/Google Cloud is ~120$ monthly
EBS-optimized bandwidth: up to 3.5 Gbps
Network Bandwidth: up to 10 Gbps
Operating system: Ubuntu/Linux/Windows
Q:Please introduce the historical financing, token allocation, vesting plan, initial circulation rate and other data concerned by the secondary market of COTI.
A:We have successfully raised $15M in token sales. Additional fundraising is equity-based with an undisclosed total. The total supply of COTI is 2,000,000,000 coins.
The token allocation is as follows: 30% (token sale); 15% (team); 45% (incentives / liquidity reserve); 10% (advisors).
Team tokens have a minimum six-month lockup and are released over a 24-month period.
Advisor tokens are locked for a minimum of six months and are released over a 30-month period. Both our liquidity reserve and incentive pool tokens will be supervised by a trusted third party accounting firm to ensure that these tokens will not be available on secondary markets before their intended release date.
The crowdfunding money from our upcoming IEO will be used for liquidity support, continued global expansion and adoption, R&D efforts and business development.
More information can be viewed in our token economy document https://coti.io/files/COTI-Token-Economy-2019.pdf.
Information about the IEO can be viewed here:
https://www.kucoin.com/spotlight/82
Q:What is the best unique thing you people are delivering to customers which you think solves the real world problem and is not delivered by anyone till now?
A:It's all the advantages of blockchain but with the ease of use and adoption of traditional systems. Instant settlement, buyer-seller protection, privacy and stability.
Q:What is the TrustChain mechanism of COTI? How do you judge and grade? If there are "oligopolists" in the future, will there be barriers to new businesses?
A:In COTI we have solved the trust challenges by creating the Trustchain, an innovative base-layer protocol in the form of a directed acyclic graph ledger, built from transactions connected through time, and by harnessing trust-based algorithms. The trust in our network is based on a combination of the network participant‘s historical behaviour data and objective information about them. We take this into consideration in our protocol by calculating trust using a unique machine-learning algorithm. Trust in the COTI network is used in the Trustchain Algorithm to validate and confirm transactions faster and define the amount of work and consensus each transaction is going to require from the network.
To run a DSP Node, a user is required to deposit a substantial amount of COTI and to demonstrate a high trust score. Node operators will be required to participate in the network as a Full Node operator for a long time before applying to be upgraded to a DSP node. In addition, DSP nodes are assigned to zones (clusters), which prevents any group of DSP nodes to dominate the entire network.
The fact that participants can operate (purchase) the Nodes that perform verification, namely the DSP Nodes, means that an attacker can attempt to buy favor in the COTI network. In particular, it seems that at first glance that all an attacker needs to verify their own transactions are, at a minimum, two Nodes consisting of a Full Node and DSP Node. Since verification requires consensus among DSP Nodes, however, and purchasing DSP Nodes are expensive, we assume that purchasing the majority of DSP Nodes would not result in a profitable attack.
Furthermore, only participants with a high trust score can create a DSP Node and as soon as the Node is found to be acting maliciously by other DSP Nodes, it will lose all trust, be blocked and the owner’s deposit will be seized.
Q:I think that the main challenge for Coti will be partnerships with the banks. How are you planning the integration with the current payment system, and more, how can you see as a good way to make COTI worldwide integrated with all the banks, and there are a lot of different rules depending on the country's governments?
A:COTI adheres to stringent Know Your Customer (KYC) and anti-money laundering (AML) procedures in the provision of its services and adherence to regulatory and compliance standards. This will streamline its future adoption with traditional financial systems and partnerships with banks or other monetary institutions.
We will also use 3rd party services to support KYC and bank integrations which are country specific or requires unique settings. We already partnered with such services and can handle and support a wide range of regions and banks as part of our platform.
Q:How about the fiat inflow and outflow channels in COTI ecology? What about the ability and speed of token implementations?
A:We have a platform and a license for it: COTI-X. Token implementation should be very fast.
As opposed to other infrastructure which only provide application developer/organization with the infrastructure itself and a mean to deploy token (for example ERC-20 on ethereum). The token are not accessible or usable for the users other than sending the tokens to participants there is no way in all other platforms to onboard users into the system.
So COTI presents an easy way to easily deploy a new token/stablecoin running on the COTI network with a simple wizard walkthrough that with a few clicks enable any token issuer with:
- Listing of his new token on our exchange with no costs - in other platform this is a very costly procedure.
- The ability to purchase the token with other crypto or fiat money - automatically define pairs from fiat to crypto and from crypto to crypto.
- The ability to withdraw the token back to fiat.
- And the ability to define a colleterization for the new token in order for it to be stabilized (most setting are fully automatic).
Q:Currently, Crypto payment platform has many implementation projects, does COTI have any advantages to compete with developed projects and strong communities before it?
A:COTI’s specialization grants it a unique position in the market as the first blockchain optimized for payments and stable coins. Other infrastructure projects are not suited to address the shortcomings of both traditional and digital payments.
Payment apps and stable coins are not a competitor to COTI as they operate at a lower tier in the value chain and can become clients of COTI. Current incumbents that operate in the financial sector are Ripple and Stellar. Stellar and Ripple are looking to create an environment of near instantaneous transfers to help serve the global unbanked population. However, their tech stack is based on previous generation blockchain that is challenging in terms of scale and costs. COTI is unrivalled in terms of scalability, processing tens of thousands of transactions per second (TPS) on account of its DAG-based Trustchain consensus protocol, all while maintaining complete decentralization.
COTI’s data structure incentivizes node operators by enabling them to earn a percentage of network fees for their contribution to the network. Ripple is centralized by nature (and criticized for it) and Stellar’s node operators have no incentives to run nodes. This approach creates a risk of centralization and lack of distribution.
COTI also supplies the infrastructure and needed features tailored for stable coins, which provides numerous advantages over issuing stable coins on other third party platforms like Ethereum, including extreme scalability, near zero fees and privacy. While some stable coin projects have added stability to the system, many others have compromised on decentralization and security and all lack the technological foundation for real world use.
Beyond this key difference, COTI stands out in terms of its decentralized buyer-seller protection system, which protects all entities against errors, fraud and counterparty abuse and is necessary for the mainstream adoption of digital currencies. This type of resource is currently unavailable to cryptocurrencies and decentralized payment networks, although it is a cornerstone to traditional payment systems like Visa, Mastercard and PayPal that provide chargebacks and dispute resolution services.
Finally, privacy is a standout for COTI, meaning transactions cannot be tracked back to a specific user, as a multi-address is implemented for each transaction by a one-way hash function. A multi-address refers to one wallet seed (user) that can have more than one address associated with its balance and can generate a one-time address for specific uses.
Q: Any private token will unlock with IEO token?
A: Very little, as you can see in our very low circulating supply.
Q:I would like to know what is the expected TPS post the mainnet and will there be staking in the future?
A:10K TPS has been verified and benchmarked internally using synthetic transactions and load simulations executed within our TestNet environment (these tests can be replicated by any user). We believe that this will result in improved network scalability (upwards of 100,000 TPS) following our MainNet release on 4 June, 2019 and as more users join the network. In other words, there is a positive correlation between the number of network users and the rate at which transactions are confirmed. So as our solution expands and is adopted, the rate of transactions per second will also increase significantly.
With regards to staking, users can become full node operators easily and be incentivized with COTI coins.
Q:Why use a payment token on top of Ethereum when you can just use ETH? Will the project be using ETH as an extra layer of protection of its ecosystem?
A:We don't! COTI uses its own DAG called the Trustchain.
Q:Why u needed the extra 2M IEO if u have 15M already?
A:The most obvious reason for holding an IEO in this advanced stage of COTI’s roadmap is to ensure an effective launch. It will enable us to amplify our community base and to generate greater visibility and liquidity measures.
Even more so, just comparing the overall network value of projects that went through an IEO and those that didn’t, it makes it very lucrative for all stakeholders that COTI hold an IEO.
Q:How many will be the proceeds per month, can I cover the cloud server cost
A:We will soon release a profit calculator so you can see that it is profitable. Of course you'll be able to cover the cloud hosting
Q:In your original token economy, you explained that it would not have been possible for additional COTI tokens to be created following the genesis transaction due to COTI’s DAG structure and decentralized nature. How does this multiDAG affect the COTI token supply?
A:MultiDAG is actually the solution for the problem. Each DAG layer can have its own independent supply and does not affect COTI's supply.
The commonality is that each DAG will pay network fees ("GAS") using the COTI Coin on the main DAG
Q: How about the disruptive solutions of COTI that you think will be the key for mass adoption?
A:We believe that major enterprises releasing a stable coin for payments will be the killer app to be massly adopted. We are the best solution for that today. In addition, I invite you to read our Path to Adoption article:https://medium.com/cotinetwork/coti-the-path-to-adoption-2dd9c6dc2b7f
Q:If the zero spend servers experience over-activity, It only says that a message saying problems with the network or with the Trust Score Algorithm will be indicated but no resolution was laid out. Can you shed more light on what the team or the ecosystem would do once this happens?
A: The zero spend server can not really experience over activity as they are used only when there is no activity or prior transactions in the network. So if there are transactions in the network they are confirming previous transactions and the zero spend is not needed at all.
Q:How will confirming transactions and securing the security within the Blockchain network of COTI nodes be rewarded?
A:There are two models of nodes payouts:
1. Full Nodes are free to define their own price list and have obligations to transfer defined network fee to the network pool. This model works because of the distributed nature of the network: one node can’t grab all users because it would lead to overloading and performance degradation, so the users will be spreaded between nodes and fees also will be distributed - resulting in a very competitive and low fee environment.
2. The model for DSP and Trust score nodes is different. The revenue of a node should cover standard node expenses and provide reasonable interest income based on the network fees collected.
Q:COTI provides functionality as robust as Paypal and Alipay, how exactly will you attract people to use COTI?
A:COTI partners with highly reputable and trusted companies and allows them to issue their own token and so COTI leverages the trust that these companies has.
Our go-to-market strategy is built on using our infrastructure to sell a stable coin platform, payment platform and loyalty platform to global enterprises. We are offering COTI Pay to small and medium enterprises as an off-the-shelf product. We have hired and will continue hiring business development managers in various regions to help us with this effort.
Q: COTI’s debt card will be launching in 2019?
A: Yes, stay tuned!
Q:As said by many, the COTI revolution could mean goodbye Visa, goodbye Mastercard and goodbye PayPal. So what does COTI have that can topple these giants?
A:Blockchain is a threat to traditional systems as it is a trustless system, and trust is the only thing traditional systems offer. USing our systems, the major enterprises can own their own payment rails, save a lot of money and take ownership on their data and fate.
We needed to fix blockchain to make it suitable for payments and this is exactly what we did.
Q:As stated, COTI’s ecosystem and technical solutions provide robust cyber security measures around data integrity and confidentiality. How will COTI ensures to secure their infrastructure? (blockchain and non-blockchain)
A:COTI has built mechanisms to monitor, detect and defend against any possible network attacks, ensuring network security. An example of such a mechanism is COTI’s Double Spend Prevention (DSP) Nodes. COTI is introducing a double spend prevention solution, which consists of adding a handful of highly trusted nodes to the network with the primary function of reaching consensus on whether a transaction is legitimate or a double spend. DSP consensus consists of a majority of DSP nodes, and when a transaction has more than one half of the DSP Node signatures, then consensus is achieved.
COTI tokens are stored in private, pseudo-anonymous virtual ‘wallets’. Each wallet is identified and protected by a unique access key known as a ‘seed’. Although we call them wallets, they do not actually store the tokens, instead they are like keychains that give you access to the tokens permanently stored on the COTI ledger.
Q:Which projects do you consider as a competition in the market and what would be COTI’s edge as compared to them?
A:We actually believe that other projects support the same thing as us: Adoption of digital currencies over traditional systems. So, we feel that they are not competing but helping.
If I'm pushed to figure out who we look at i'd say Ripple and Stellar.
We are different as COTI’s specialization grants it a unique position in the market as the first blockchain optimized for payments and stable coins. Other infrastructure projects are not suited to address the shortcomings of both traditional and digital payments.
Payment apps and stable coins are not a competitor to COTI as they operate at a lower tier in the value chain and can become clients of COTI. Current incumbents that operate in the financial sector are Ripple and Stellar. Stellar and Ripple are looking to create an environment of near instantaneous transfers to help serve the global unbanked population. However, their tech stack is based on previous generation blockchain that is challenging in terms of scale and costs. COTI is unrivalled in terms of scalability, processing tens of thousands of transactions per second (TPS) on account of its DAG-based Trustchain consensus protocol, all while maintaining complete decentralization.
COTI’s data structure incentivizes node operators by enabling them to earn a percentage of network fees for their contribution to the network. Ripple is centralized by nature (and criticized for it) and Stellar’s node operators have no incentives to run nodes. This approach creates a risk of centralization and lack of distribution.
COTI also supplies the infrastructure and needed features tailored for stable coins, which provides numerous advantages over issuing stable coins on other third party platforms like Ethereum, including extreme scalability, near zero fees and privacy. While some stable coin projects have added stability to the system, many others have compromised on decentralization and security and all lack the technological foundation for real world use.
Beyond this key difference, COTI stands out in terms of its decentralized buyer-seller protection system, which protects all entities against errors, fraud and counterparty abuse and is necessary for the mainstream adoption of digital currencies. This type of resource is currently unavailable to cryptocurrencies and decentralized payment networks, although it is a cornerstone to traditional payment systems like Visa, Mastercard and PayPal that provide chargebacks and dispute resolution services.
Finally, privacy is a standout for COTI, meaning transactions cannot be tracked back to a specific user, as a multi-address is implemented for each transaction by a one-way hash function. A multi-address refers to one wallet seed (user) that can have more than one address associated with its balance and can generate a one-time address for specific uses.
Q:Has any team had a partner to cooperate and accept COTI's payment solution?
A:We already signed 80,000 users and 5,000 merchants to the COTI’s network. We have also signed enterprise partnerships around the world and Asia, such as Orme, Blue Cellular, REMIIT, Credit Union West,IDT Finance and few more we are announcing after the listing on KuCoin.
Q:The company COTI has seen genuine use cases arise for blockchain related payment processing solutions like? and when do you think we'll be seeing a shift in the industry?
A:I believe the shift is near. We already see giants like Facebook, JPMorgan and Rakuten making moves. We are very close, i believe.
Q:What are the target customer segments of COTI?
A:COTI’s revenue model is based on the following:
Network usage fees: fees levied on all transactions carried out by clients using COTI’s Trustchain infrastructure and charged from node operators. The network fee is expected to be about 0.2% (much lower than current fees that range between 3%-8% in most of the world) and depends on the trust score of network participants. Fees can reach near zero for highly trusted users. We have already signed clients that are paying us every month for this.
Premium services: COTI expects to levy fees on enterprise clients implementing COTI’s technology in the form of setup fees, maintenance costs, customisations and more. We already collected over $1.5M in these fees in the past few months!
COTI’s go-to-market strategy targets Enterprises, big to small and developers. COTI’s product offering includes a white label payment solution, loyalty network and stable coins.