Cryptocurrencies have been used as the medium to process cross-border transactions for a long time ago. Many people have been using Bitcoin, Ethereum, and other cryptocurrencies to send money from different countries. However, there are also a lot of problems with sending money through cryptocurrencies. For example, the majority of the recipients don’t really want to deal with crypto volatility. For example, if you agree to pay them $1000, they want to be able to get exactly $1000. They don’t want to receive $1000 in Bitcoin now, and suddenly, the value becomes $900 a few hours later due to the BTC price volatility. Not to mention all the hassles with converting crypto back to fiat.
The Request Network is trying to solve that exact problem. It is basically an Ethereum-based payment system where everybody in the world can easily request payment and will be able to receive their money easily and securely. It is like PayPal, but they utilize the blockchain technology. The idea here is that merchants (or money recipients) don’t really need to deal with crypto volatility or all the technical steps they are required to do. However, of course, the Request Network payment system will still be better and cheaper than traditional payment companies (such as Paypal itself) due to the utilization of blockchain. Want to learn more about Request Network? Let’s just begin right away!
Cryptocurrencies And Cross-Border Transactions
Before we get into Request Network, first, we need to understand the world of cross-border transactions. Cryptocurrencies’ primary use case has always been about sending money abroad. Bitcoin has been used as a medium to send money all over the world since many years ago. There are several different benefits when you choose to use cryptocurrencies over Paypal or Western Union. First of all, you will have cheaper fees when you send money through Bitcoin or Ethereum or other cryptocurrencies.
To send cryptocurrencies from wallet A to wallet B (anywhere in the world), you will only need to pay for the blockchain transaction fees, which can be very cheap as long as the blockchain network is not clogged. The biggest fees typically come in the form of withdrawal. For example, a guy in Mexico sends cryptocurrencies to a freelancer in Indonesia. The Indonesian freelancer will need to convert his cryptocurrencies to fiat, and then he has to withdraw his money to his bank account. Usually, the withdrawal process can cost him 0.5% or 1% or even more. That being said, this might still be cheaper than standard wire transfer procedure or PayPal or western union (though it depends on the amount of money that the recipient receives).
Not only about fees, but it’s also much faster to send money abroad with cryptocurrencies. When you send money abroad with a fast altcoin like NANO or XRP or XLM, you only need seconds before the recipient’s crypto wallet receives your money. While the recipient still needs to convert his cryptocurrency back to fiat, but it usually does not take a long time to do that (depends on the fiat on/off-ramp in the country). In some regions, you need less than one day to process fiat withdrawal in a fiat-to-crypto exchange. You can compare that with wire transfer or PayPal where the whole process might take more than a few business days before you can see the money in your own bank account.
Despite that, there are also some disadvantages to using cryptocurrencies. The biggest problem has always been about price volatility. Imagine when you are a merchant, and someone buys your service for $100 by using BTC. But you are currently outside, and you have no time to check your computer. One hour later, you come home, and you find out that the $100 worth of BTC is now only worth $90 due to the price of BTC being lower than earlier. You get angry, but there’s not much you can do.
Another problem is that the majority of people don’t want to deal with technical steps to use cryptocurrencies. Most people feel it’s too inconvenient to learn all these kinds of stuff about crypto wallets and crypto exchanges. And as everybody knows, it takes a bit of time for casual joes to learn about all these things. Not to mention, some crypto exchanges require KYC verification before you can withdraw fiat currencies with them. And yes, many merchants do not want to deal with KYC verification unless if they can do it easily.
So, there are pros and cons of using cryptocurrencies to send money abroad. While it’s faster and (arguably) cheaper to use crypto, but there are also problems with crypto price volatility and the need to learn new technical things. Here’s where the Request Network can help solve the problems. Request Network maintains crypto advantages over traditional payment systems (fast and cheap) while it reduces the cons of price volatility and technical learning. How does Request Network do it? Let’s find out!
History of Request Network
Before we get into more technical details of Request Network, we should learn a little bit about its history. Basically, Request Network got its funding from an initial coin offering (ICO). The ICO ended on October 16, 2017 and it successfully collected $33,600,000 USD. There is not much history on the internet about the core team’s background, but you can check from LinkedIn and ICOBench that Christophe Lassuyt and Etienne Tatur are the co-founders of the project.
Etienne used to be the CTO and co-founder of MONEYTIS before he created Request. Meanwhile, Christophe was also the co-founder of MONEYTIS alongside Neomy. Other team members include Vincent Rolland (Lead Engineer), Laura Girod (Data Scientist), Julien Devoir (CMO), and Elliott Denis (Full Stack Engineer).
How Does Request Network Work?
The concept of Request Network is fairly simple. Requester “broadcasts” his/her request to the money sender utilizing the blockchain. The sender will automatically detect the request through the application. Within just one click, the recipient will get the money in his/her local currency. That’s the goal of what Request Network wants to be.
But of course, this ‘simple’ process won’t be the only thing that you can do with Request Network. Online purchases, B2B (business to business), and even payments for the internet of things will be made possible. At least, that’s the promise — one more important thing to notice. Request Network also has the ability to track and record transactions for auditing and transparency purposes.
In the middle of all these technological features, Request Network uses its own cryptocurrency called REQ. You need to use REQ if you want to use the Request ecosystem. Whenever you want to create more advanced invoices, you will need to use REQ as well. Within the new Request v2, the fees will be charged depending on the size of the data of every request. $0.10 fees will be applied up to the first 10 kiloBytes of data, and then it will increase $0.03 for each extra 10kiloBytes. The fees themselves won’t be forever fixed. The team might adjust them somewhere in the future.
Unfortunately, the Request Network project does not shy itself from some controversies and heavy criticisms. The biggest ‘question’ that comes to people’s minds is the lack of progress. Apparently, the Request core team suffers a lot of PR problems. They seem to miscommunicate a lot and kept on saying, “we are working hard,” while the reality is that the public does not really know what things they are currently developing.
There are a lot of promises that were made in 2017 (during their ICO), and many of them are still ‘under development’. The lack of adoption starts to worry many long-term REQ token holders.
There are a lot of competitors to the Request Network. If we want to look at the top altcoins list, maybe XRP and XLM are the most relevant competitors. Both Ripple’s xRapid and IBM Blockchain World Wire utilize cryptocurrencies for cross-border transactions. And yes, both of them also promise ‘automatic’ conversion to fiat currencies at the end of the ‘process’. Considering IBM, Stellar, and Ripple are much larger than Request Network, actually, the success of these projects would mean a harder time for Request Network.
Because theoretically, you will be able to ‘request’ payment with 1 or 2 clicks solution as well with these programs, depending on the partners of xRapid and IBM Blockchain World Wire programs. Other than these two, we can also include stablecoins and future stablecoins. TUSD, USDC, and maybe even Facebook’s Libra can be seen as competitors to Request Payment.
REQ Token In The Crypto Market
At the time this post was written, one REQ token was worth $0.011851 USD. The market cap was $9,299,993 USD, with slightly more than $150,000 USD daily trading volume. You can find REQ on crypto exchanges like Binance, Huobi, Mercatox, Kucoin, Kyber Network, and many others. However, liquidity does not look good at the moment.
Request Network used to be one of the most promising crypto projects in 2017, but recently there seem to be some problems and delays with development progress. While the idea remains brilliant but other crypto projects are starting to try to do the same thing.