Blockchain evangelists would have many believe that cryptocurrency will soon be used to buy everything from coffee to supercars. Obviously, the adoption of this new form of currency is not quite so universal. Several years ago, when shops and cafés started offering customers the option to pay with crypto, they encountered two problems trying to use cryptocurrencies in real life: transaction cost and transaction speed. BANKEX Plasma solves both, as proved by its first use case: buying coffee from a vending machine almost at Visa transactions’ speed.
Because of the way the two most well-known cryptocurrencies, Bitcoin and Ethereum, are structured, transactions take time to process. For Bitcoin, because transactions must be confirmed by miners, about seven transactions are processed each second. In Ethereum, transactions move slightly faster but the speed only manages to reach roughly fifteen transactions per second. For context, Visa processes twenty-four thousand transactions a second. So this is a structural inefficiency within the two most promising blockchain environments.
If buying coffee was treated as an ordinary Ethereum transaction, it would, as of the time of this writing, cost about $0.20 to process. It would also take about 2 minutes from payment code scan to coffee delivery. $0.20 is not much in the context of transfers of $100 or more. And 2 minutes is trivial if you are enjoying your coffee in a café. But, in the context of buying coffee to go for less than $1 from a vending machine, these issues become more critical. But BANKEX aims to fix this wait time with what they are calling the Plasma Protocol. BANKEX Plasma makes transactions instantaneous and drops the cost per transaction to $.005.
According to the company, this new protocol based on the Ethereum platform has managed to process up to twenty-two thousand transactions per second. This means that, according to the company-provided statistics, the new protocol enables blockchain-based transactions to be processed almost as quickly as transactions are processed in Visa, the world’s most-used credit system.
BANKEX isn’t sitting on its laurels, however. To test the real efficiency of Plasma transactions, they outfitted their office a special coffee vending machine. All a crypto enthusiast has to do now to get his or her cappuccino now is to open an app, scan a QR code on the machine, and confirm the purchase.
The key underpinning of BANKEX Plasma, the protocol powering this new way to make purchases with crypto, is a transparent off-chain infrastructure for payments, especially micro-payments. Plasma can be thought of as a prepaid wallet. Initially, some Ether is deposited into a Plasma wallet from another preferred wallet. Thus, the standard Ethereum transaction fee is paid only once.
BANKEX Plasma is an implementation of the original Ethereum Plasma project, invented by Vitalik Buterin and Joseph Poon in August 2017.