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GRAFT to Release the First Supernode that Provides Real-time Authorizations for Cryptocurrency Payments

PRESS RELEASE – for immediate distribution

July 26, 2018

With RTA Supernodes release, GRAFT makes first step into the era of blockchain being a viable option at the point of sale, providing level of service comparable to that of the credit/debit card networks.

Supernodes (aka Masternodes) are gaining traction in the blockchain space as a mean of expediting transactions. They work by constructing a second layer network around the nodes that maintain the blockchain itself, and are able to provide additional functionality on top of the blockchain such as “off-chain” transaction processing or governance. Supernodes/ Masternodes usually run on a Proof-of-Stake model requiring staking for collateralization, and provide passive income to their owners, which explains their popularity.

GRAFT is building an eco-system of Supernodes – some are used to perform quick (credit-card speed) transaction authorizations, others to provide external system connectivity, yet others to act as service brokers performing currency exchanges and hosting various applications for merchants.

Enabling cryptocurrency to pay for goods and services has been a hot topic recently, with integrated payment providers like BitPay and Coinbase, enabling e-commerce payments via a gateway solution of their own. These services act as fully integrated service providers performing settlement and payout functions. Multiple (predominantly online) merchants have rolled out alternative payment options based on these integrated services, with most notable example of Expedia, however rolled them back citing high unpredictable fees, high risks, and lack of universal coverage. Stripe’s short-lived experiment to offer cryptocurrency payments is another example of the centralized approach failure.

GRAFT is working to give the space an equivalent of a payment network (such as the ones provided by Visa, Discover, and Mastercard) by offering a network fabric that connects gateways and services together, crossing locales and making sure the network works with existing point-of-sale solutions and payment terminals. In fact, GRAFT utilizes the recently added ability of the leading payment terminal networks to run 3rd party applications on their platforms. Most notable is GRAFT’s integration with Verifone’s Enagage line of terminals.

“GRAFT’s solution makes a lot of sense both technically and economically, staying true to decentralized model of cryptocurrency, and enabling regular people to service various parts of the network. We look at it as people ARE the network.” – said Dan I, one of the GRAFT Blockchain project leads. “At the end of the day the network functions – hosting blockchain nodes, doing authorizations / validations, providing exchange services, ensuring compliance, taking care of distribution and support, and even offering credit is best done by lots of individuals or small businesses and that’s the promise of ultimate decentralization”

GRAFT Network was originally conceived by Slava Gomzin, author of “Hacking Point of Sale” and “Bitcoin for Nonmathematicians” – some of the seminal work in the point of sale and cryptocurrency spaces. The network is designed to address all issues that cryptocurrency faced at the point of sale – speed, fee, and privacy, while taking advantage of the “smart” nature of digital money backed by the smart contract capabilities. The project is an open platform / open source and the network is free to use with the low 0.5% network fee paying the Supernodes for their service.

The RTA Supernode alpha release is scheduled tentatively for August 1st and will be released on a TestNet with the RTA test volunteer team. To sign up for Supernode testing, follow the link

More information about GRAFT Blockchain can be found on WWW.GRAFT.NETWORK

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GRAFT Development Status Update June 2018

Supernodes and Real Time Authorizations

Let’s start from implementation of full supernode, which is essentially an implementation of real-time authorizations (RTA). Although we are close to the finish line, we do not release it yet to public alpha. We need more time for optimization, fine-tuning, and QA testing. One of the main reasons for the delay is an issue with communication. Unlike other two-layer cryptocurrency networks which use a separate mechanism for communication between their second-layer nodes, we reuse the existing peer-to-peer network as a basic transport. Our original algorithm finds the shortest and fastest routes between the supernonodes by maintaining a set of P2P tunnels through the network of cryptonodes. The main difference and greatest benefit of using the same communication base for two layers (both cryptonode and supernode networks) is not exposing the authorization sample’s supernodes – because in our design they are not required to have a public IP. Such design is the major difference and significant improvement comparing to other layer two implementations such as Dash masternodes.

Remember that one of GRAFT’s key differentiators and goals is absolute privacy initially provided by underlying CryptoNote blockchain protocol, which is the first layer of GRAFT platform. The fact that the auth sample supernode does not require a public IP attached to it makes GRAFT even more private and decentralized, because the supernodes are less dependant on regulated hosting providers. Without public IP the supernodes are “hidden” behind the large, distributed, and complex P2P network, which makes them less vulnerable to DDOS attacks. At the same time, the hosting and maintenance are less complicated and less expensive for supernode owners. (Note that wallet/POS proxy supernodes, which typically belong to service providers and large merchants, still require public IP address in order to be able to serve wallets and POS/payment apps).

However, such great benefits do not come for free. Along the way we found several issues in existing CryptoNote/Monero P2P communication implementation, which we are fixing in order to make it more efficient, stable, and suitable transport for our purposes. With that said, we anticipate the public alpha of supernode with RTA to be released by the end of July. Meanwhile, we will start a private alpha release for testing in a coupe of weeks, so if you are interested in helping us with preliminary testing please contact us at [email protected].

While working hard on RTA implementation and getting ready to its production launch, we realized that hosting a supernode, either full (authorization) or proxy/gateway, requires a special DevOps skill set, so we are working through making arrangements and building relationships to provide turnkey solutions to supernode owners and merchant service providers.

Payment Apps

We are continuously working on improving the Verifone terminal app so it will be fully polished for production by the time RTA is released. As Verifone have written on their merchant marketplace website, where GRAFT app is listed as the Featured Apps Partner, “Our app partners are working around the clock to help empower our merchants with applications that enrich the customer experience and provide business productivity.” This is absolutely true statement, there is not much to add. Since the Verifone certification was achieved last month, we have done several improvements such as UI redesign (in both terminal app and our wallet), enhanced configuration utility for merchants, integration with CoinMarketCap for real-time exchange rates, and some bug fixes. Also, we are working on Ingenico terminal app integration into their marketplace.

One of important and promising features we are planning to develop is using NFC (Near Field Communication) for initial engagement between the mobile wallet and terminal app, so instead of scanning QR code displayed on payment terminal the buyer will just wave the phone (the same technology is used by contactless payment cards and Apple Pay). Implementation of such a feature will help improve both buyer and merchant user experiences and reduce the overall transaction time. We will keep you posted about our progress in this area.

We just finished design and now are ready to start implementation of the payment gateway which will facilitate GRAFT payments on online shopping platforms. Once implemented, integration with GRAFT payment gateway, among other features, will bring to online merchants and buyers a unique combination of absolute privacy and instant transaction confirmations (using RTA) – something they have never seen before. Plus, after we finish RTA and move to accept broker implementation, they will be able to accept various cryptocurrencies, while keeping the same benefits of privacy and transaction speed.

Wallet Apps

We finally redesigned the app downloads page on our website, so now it’s easier to find all our apps, including wallets, and their releases for various mobile and desktop operating systems: iOS, Android, Windows, Mac OS X, and Linux. In recent wallet releases, we fixed some bugs and added new configuration options. The upcoming wallet release will support purchases with real time authorizations using full supernodes (currently it supports a limited version of RTA on testnet only).

CryptoFind App

As our app for discovering and listing crypto-friendly merchants is gaining more popularity among crypto enthusiasts, we periodically release new features and bug fixes. In recent CryptoFind version, in addition to bug fixes, we added a possibility to take a picture of the GRAFT sticker on the merchant’s window so the users can earn better bonuses.

Happy Grafting!

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New Element of GRAFT Ecosystem – Stable Value Payout Token

Designing Payout Tokens and Real Time Decentralized Exchange

As we’re working on the design and development of the features defined in the original GRAFT white paper, we are monitoring industry trends, listening to the community, and constantly looking for new ways to enhance and extend functionality of GRAFT network and its applications. Currently, we are in a process of refining several sections of the white paper, adding new features that will help GRAFT become an even more comfortable place for both merchants and buyers. In order to do that, we are designing two very important ingredients: a payout tokens and a real-time decentralized exchange. These two new features will enable optimal flow of funds, either crypto or fiat between GRAFT users on both sides of retail payment transaction. We will publish information about those new elements of GRAFT ecosystem in this blog, in two different posts, before it goes to the next version of the white paper. The first article below describes payout tokens, and the second one, which will be published soon, will describe real-time DEX using atomic swaps on network of GRAFT supernodes. The product roadmap will be also updated along with the publication of the updated white paper.

GRAFT Merchant Token Platform:

Introducing Payout Token

Although recent version of the GRAFT white paper provides pretty detailed definition of merchant token concept, it does not contain (yet) some important details which are described in this article. In addition, we introduce a concept of payout token – a special type of a merchant token that will be used to facilitate merchant payouts in local fiat currency. Before we move to payout token definition, let’s refresh our memories to recollect the concept of a GRAFT merchant token, which is a foundation of GRAFT payout token. Here is the definition from the GRAFT white paper:
In addition to fast and inexpensive transactions, merchants place high value on customer loyalty and branding. This functionality will be enabled by the token layer of the GRAFT currency. The token represents domain (merchant) specific GRAFT use, and offers smart contract-backed functionality like loyalty point accumulation and use, reward points, sale discounts, spending discounts, competitor discounts, coupons and store credit. Merchant token is a predefined smart contract that allows creating a private token that belongs to its owner. Unlike some other smart contracts and token platforms, creation of GRAFT merchant token does not require any programming and can be done by anyone.
Note that merchant tokens are not equivalent to “open” smart contracts: we do not try to build another Ethereum platform. Unlike Ethereum-like smart contracts that can be unpredictably customized through programming, flexibility of merchant tokens is limited to their necessary features, which makes them simple and inexpensive but powerful tool accessible to a merchant of any size – from individuals and small businesses to large retail chains. In addition, the main features of each particular merchant token type will be supported by supernode DAPI and GRAFT wallet and point of sale apps. Thus, those features are going to be available for merchants and buyers “out of the box”.

Stable Value

Since Graft tokens (GRFT) are tradable, when they are used for merchant payouts directly, volatility may become a problem. We cannot ignore the fact that many merchants would like to be able to accept cryptocurrencies but prefer to get paid in their local fiat currency. This is their reality: merchants still need to pay for restocking, utility bills, and employee salaries in fiat. At the same time, they don’t want to be involved in cryptocurrency exchange business, and they need to be isolated from the financial details of the crypto business. In order to finally fill the gap and connect the two worlds – cryptocurrency transactions and fiat currency merchant operations – we have created a concept of a payout token, which represents a local currency and can be transacted on GRAFT blockchain in real time using the supernode tier of the blockchain. Payout token is based on GRAFT merchant token technology, similar to gift, rewards, and other merchant token types.

Underwriting

The main goal for creating payout token is providing an easy and reliable way for merchants to get paid in stable local fiat currencies while avoiding usage of centralized payment processors. Payout tokens are issued and maintained by responsible token underwriters (such as banks). When someone (payout broker, for example) is buying payout tokens from the token underwriter, the company generates a necessary amount of tokens and transfers them to the buyer in exchange to an equivalent amount of fiat currency. When someone (merchant or payout broker on behalf of merchant) is selling payout tokens back to the token underwriter, the company destroys the tokens and pays an equivalent amount of local fiat currency to the seller. Thus, payout token is always backed by sufficient amount of fiat currency, and its price always remains the same and equals to the corresponding fiat currency float. For example, 100 USDG can be always bought or sold for US$100. Payout tokens will be issued by licensed token underwriters only in exchange to equal amounts of fiat currency. Furthermore, the rights to handle particular payout tokens can be delegated (licensed) to local commercial banks or even national governments. At this point, we’re open to partnership inquiries from financial institutions interested in underwriting payout tokens tied to the local currency. Please email info @ graft.network or contact us through other means if you represent an organization that wants to get involved.

Details

VChain name for all payout tokens is always “GRAFT”. Each payout token subtype matches a particular local fiat currency. For example, GRAFT.USDG token (ticker: USDG) matches US dollar. Payout Token Naming Format GRAFT.[Currency Ticker]G Examples:
GRAFT.USDG GRAFT.EURG
 

Vlog Version

Special shout-out to Jose D for making this wonderful video version of this important blog post, making our ramblings little easier to digest. Thanks Jose!!!
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GRAFT Development Status Update May 2018

It’s time for another status update! Y’all are busy people, so let’s not waste any time and get right to the point.

Payment Apps

Let’s start from really good news – our Merchant Marketplace app just received certification from Verifone – big step towards GRAFT acceptance by brick-and-mortar merchants and a product of 6 months long development cycle in close communication with Verifone. We are working on improving this application as well as building apps for other major players in the area of hardware payment terminals such as Ingenico.

Also, we just started designing the online shopping cart integrations – the first implementation is going to be an integration with Shopify, one of the most popular online store platforms. While it’s not within GRAFT’s charter to produce all the integrations, we take it upon ourselves to provide reference integrations with few leading platforms, paving the way for the independent software developers to take GRAFT to all other platforms.

Blockchain

It’s not a big secret that GRAFT has been forked from Monero – in order to be able to reuse the best (as of today) implementation of Cryptonote protocol, which is the most secure blockchain protocol so far, at least for people who care about their privacy. The idea was (and still is!) to take the open source Cryptonote technology and use it as a tier-1 foundation of the future 2-tier application platform, when the 2nd tier consists of the network of full supernodes (please read the white paper for more details). So the GRAFT dev team was supposed to be mostly focused on design and implementation of the tier 2 from the beginning. Unfortunately, sometimes our plans diverge reality in unpredictable ways, and we admit that it was naive assumption. Instead of working on core development tasks, significant part of the team had to address several problems caused by network difficulty and timestamp manipulation attacks. As a result, we switched to more efficient difficulty adjustment algorithm, which is already used by a few other blockchains, and even managed to improve it. We also followed the majority of Cryptonote community and implemented ASIC-resistant code.

We appreciate a concrete help we receive from the community, including individual contributors zawy12 and jagerman – thank you guys! It’s also worth mentioning that our full time core dev team has been growing as well – we have added two senior core developers and project/product manager.

We are working on another potential modification – Cryptonote Heavy hash algorithm. Although the code change is ready, we are still testing, and haven’t made a final decision when (if at all) to switch to Heavy. We continue monitoring the situation in order to find the best time for changes that require major network update.

Real Time Authorizations (RTA)

Our top-most development priority right now is RTA and we’ve been hard at work doing the R&D and laying the foundation to meet our delivery timeframes. For those of you who are interested in details, here is the “10,000 foot view” of RTA – simplistic, optimistic sequence diagram of the RTA flow: Note that every line of text in this diagram correspondents to hundreds or even thousands of lines of the source code, so this diagram just demonstrates interactions between the main players, without going deeply into the details such as auth sample selection, fee distribution, message broadcasting, etc. We are working on various modules of the RTA so we could compile the full picture: supernode-ng server framework, porting DAPI/business logic into a new framework, and authorization sample communication, which includes both super-fast UDP-based direct communication protocol (for “urgent” messages) and “unhurried” protocol (for regular message transmissions) based on existing P2P implementation.

CryptoFind

Although CryptoFind was not designed to be the core product, its popularity recently skyrocketed, and so now we cannot imagine GRAFT without CryptoFind, which becomes the most comprehensive worldwide database of businesses that accept crypto. We have implemented some new features and improvements in CryptoFind since the last update: added a text search function, which allows you to find nearby points by name or type (cafe, store, refueling, etc.), enhanced the user interface, and created statistics page.

Network Monitoring

Also we are internally monitoring multiple parameters of GRAFT servers using special tools such as CloudWatch and Nagios, we thought that the community should be able to know about the basic status (“up/down”) in real time as well, without the need to ask and repeat the same questions on forums. So we have created a simple public network status monitoring page – don’t forget to check it out!

Happy Grafting!

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GRAFT Merchant Tokens: Introducing VChains

Merchant token is a simple smart contract that allows creating a private token that belongs to its owner. Unlike some other smart contract and token platforms, creation of GRAFT merchant token does not require any programming and can be done by anyone.

The business features described below are typically associated with using complex third party service providers and high implementation costs, which makes those services inaccessible for small to medium size businesses and expensive to large businesses. GRAFT Merchant tokens allow any merchant to implement those important business features with minimum efforts and low cost.

Types of Merchant Tokens

Store Credits

Store Credits are typically utilized by merchants for performing purchase returns and exchanges, when return cannot be done using the original payment method, or the merchant’s return policy does not allow the full refund. Store Credit essentially transforms return to exchange, so the merchant does not lose the customer and associated revenue.

Store Credit Token can be linked to the item price in local fiat currency, so the customer can use those tokens during next purchase “instead” of or in addition to the payment with local fiat currency. Store Credit tokens usually either do not expire or have very distant expiration date as they are basically replace the fiat currency.

Loyalty Rewards

Loyalty Rewards is powerful marketing instrument which attracts customers and increases spending. Loyalty Rewards can be awarded with each purchase, or as one-time bonus, or using other models. The rewards than can be used to makes purchases of particular items or all items, or converted to cash. Loyalty Rewards are not necessarily linked directly to fiat or crypto currency as they can be spend to provide discount or buy a special “unique” reward items that are not available for sale using other methods of payment.

Loyalty Rewards usually have relatively close expiration date. This way the merchant “stimulates” earning more rewards and eliminates accumulation of very large amounts of reward points that can become useless.

GIft Certificates

Gift Certificates can be issued by merchant in order to attract customers. In order to increase the effect, gift certificates can be sold with discount (for less than their nominal price). Gift Certificate tokens usually either do not expire or have very distant expiration date as they are basically represent the fiat currency.

Discount Coupons

Discount coupons can be used for one-time or long term promotions. The coupons can be distributed publicly or to individuals, in wallet or paper form. The coupon then can be scanned by point of sale in order to get discounted or even free item.

Transactions with Merchant Tokens

Create

Creating new merchant token (“smart contract”). Can be done using point of sale app.

Renew

Renew merchant token (“smart contract”). Can be done using point of sale app.

Add

Add more merchant tokens to the circulation.

Issue

Merchant’s point of sale sends merchant tokens to the customer wallet or prints a paper wallet.

Redeem

Customer redeems merchant tokens at merchant’s point of sale using wallet app or paper wallet.

Merchant Token Fees

All the merchant token fees are paid to the current supernode authorization sample.

Merchant Token Transaction Fees

Merchant always pays the token transaction fee, which means the buyer never pays the fee. A regular transaction fee is applied to each transaction with merchant token, including adding, issuing, and redemption. As GRAFT fees are proportional to transaction amount, the fee is calculated based on 1 token = 1 GRF, although it’s not necessarily that the token has any direct link to the GRF or other currency. It’s important to note that GRAFT fees are calculated based on logarithmical formula so there is no danger of paying high fee on large amounts.

Initialization and Renewal Fees

The initial Create transaction implies a special higher fee because it is associated with naming a token. In order to prevent “domain squatting”, the initial fee is set to a reasonable amount that prevents massive abuse. Initialization fee of 5 GRF is required to generate a new merchant token smart contract (Create transaction). The renewal fee is 10 GRF.

VChain

VChain allows creating a virtual chain of stores so multiple point of sales can be “connected’ to the same private “virtual blockchain”. Thus, there is a dual meaning of word “Vchain”: virtual chain and virtual blockchain. Vchain creates a private common platform for managing merchant tokens and items catalogue.

Merchants can create their own private vchain which is going to be accessible only by this particular merchant and contain all information about its tokens. Vchain allows connecting multiple points of sale or even creating a chain of multiple stores. Points of sale that belong to the same vchain can issue and accept the same merchant tokens, use the same shared item catalog stored and maintained on the blockchain, generate aggregated transaction reports, and more.

Buyers can use vchain to link multiple wallets so they can manage multiple accounts and move funds between those accounts without paying fees. This feature is useful for family and corporate accounts.

VChain Fees

There is initialization annual fee of 5 GRF for creating a new Vchain smart contract. The renewal fee is 10 GRF. Those fees are required to securely process the smart contract and prevent system abuse. There is a separate annual fee of 10 GRF for adding another point of sale or wallet to the vchain.

All vchain fees are paid to the current supernode authorization sample.

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Graft vs Ripple and Others: Focus on Buyers, Merchants, and Their Privacy

Focus on Buyer and Merchant NeedsRipple’s is mostly focused on bank settlements, while Graft provide solutions to buyers and merchants. Buyers can pay anywhere with cryptocurrencies or plastic card using Graft wallet app. Merchants can receive payment from anyone using point of sale accepting both cryptocurrencies and plastic cards. Faster payment confirmations are provided 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, by supernodes that are automatically selected by the network using combined proof of work and proof of stake algorithm. Focus on Absolute Privacy 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. 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.
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Since Graft uses CryptoNote protocol, has the Monero community indicated support for Graft?

While Graft supernode code is being written from scratch, the blockchain CryptoNote implementation codebase is forked from Monero. We do not anticipate a direct and immediate Monero community support. However, we believe that our project attracts people from CryptoNote communities as it adds a lot of features that are not available in existing CryptoNote implementations. One example of such a feature is real-time authorization (instant confirmation). Another example is hidden transaction fee amount, which is exposed to public view in all existing blockchains. This table compares Graft with Monero, Bitcoin, Dash, and other cryptocurrencies. However, there are even more important features that are not simply enhancements of the CryptoNote protocol. No one needs just another blockchain, even if it provides better privacy. But Graft is much more than just “another blockchain”. Graft is innovative payment application platform which supports various payment and payout methods, either traditional or innovative. While providing “reference”, default implementations of applications and services, Graft ecosystem is open for any software vendors and service providers. We believe in diversity of payment methods and cryptocurrencies.