LOS ANGELES, April 17, 2018 /PRNewswire/ -- In late March 2018, the team at LITEX, provider of a fully decentralized cryptocurrency payment ecosystem, developed the LITEX Network enabling a payment process involving three parties, guaranteed by a smart contract, and that doesn't require participation by a centralized payment organization. LITEX's aim is to facilitate truly decentralized payment solutions, allowing users worldwide to access the LITEX ecosystem anytime and anywhere. What technology does LITEX deploy to achieve this?
1. The LITEX Architecture
The LITEX ecosystem executes two processes: the main process in which the customer completes the purchase using a cryptocurrency, which runs in a counter-clockwise direction as described in the above diagram; and the sub-process in which the exchanger swaps the fiat money for cryptocurrency, which runs in a clockwise direction. Coordinated by LTXN, the two processes achieve an optimized configuration and series of interactions, addressing the needs in a variety of payment and exchange scenarios.
In the main process, the acquirer passes the billing information, typically in the form of a payment QR code (or via a near field communication (NFC) payment terminal compatible with Apple Pay), to the merchant. The customer initiates a payment request via an e-wallet that is compatible with LITEX, the request is then transmitted to LTXN, and is designated a payment routing by way of a matching algorithm. The payment request is routed to the exchanger with the highest degree of matching. Then, in the sub-process, the exchanger settles the transaction with the merchant via the QR code or the payment terminal using fiat money, and the acquirer, after confirming that the payment has been withdrawn, sends the R to exchanger, who, after sending the R back to LTXN, immediately receives the corresponding amount in a cryptocurrency. Finally, the R is returned to the customer, who after verifying the R, makes the payment with a cryptocurrency to the corresponding downstream nodes in LTXN, completing the entire transaction process.
Lightning network is a catch-all term for BOLT protocol-based distributed networks. Conventional lightning networks only support point-to-point cryptocurrency transactions outside of the blockchain, but are of no help when it comes to fiat transactions. The complex decision-making lightning network model provides deep linking and shares nodes by integrating a complex decision-making layer network and an implementation-layer lightning network into a single distributed system, enabling a smarter lightning network and advanced routing functionalities, including the matching of conversion and payment requests. The model also can maintain an efficient and healthy network topology via the designing of rules, avoiding the occurrence of centralized nodes.
2. Matching Engine
There are generally two types of conversion scenarios, based on the request.
1) A conversion process with a lower level of immediacy in order to reduce conversion costs. There is even one conversion process that allows the user to set a "cap", which allows the process to be terminated at any time during the course of the transaction;
2) A conversion process with a higher fee option to complete the conversion process within a very short time, in a move to receive the cryptocurrency that is requested with near-zero delay.
In actual design, the ratio of timeliness to cost, based on the user's needs, will lie somewhere between the two scenarios described above. LITEX has quantified the ratio as the form of reference data for the self-adaptive matching decision-making of the entry nodes. In addition, in terms of the amount being matched, the LTXN nodes need to match multiple qualified requests across the entire network by taking into account several factors, including but not limited to the type of currency, the monetary amount of the transaction, channel time cost and channel transfer loss. The matching strategy also considers the cost of building an inter-network channel if the recipient and the issuer of the payment use two different networks that are not interconnected.
3. Intelligent routing
All LTXN nodes have a set of strategies for the synchronization of an autonomous negotiation algorithm and a node information cache, assuring that a route is determined as soon as a request comes in and that the transaction is completed, all of which takes place in the shortest time possible.
4. The light node
LITEX designed the LTXN nodes based on Simpliﬁed Payment Veriﬁcation (SPV), and added some data records to the basic business model. As a result, the LTXN nodes need to neither maintain a complete node, nor store all user transactions across the entire network. It needs only to store the transactions related to users who have built a route to the node. Once the channel is closed and the transaction is confirmed on the main chain of the blockchain, the remaining nodes on both sides of the channel will be written back onto the main chain, allowing the user to delete previous transaction data to optimize their storage space. Smartphones generally support optimized LTXN nodes that don't take up too much storage space.