Request Network: More Than Just
2nd May 2018
From a short term perspective, people who entered the crypto-space between Nov 2017 and January 2018 have gotten burned massively. A lot of them lost their initial interest in crypto, stopped refreshing their Blockfolio or stopped reacting to any good news enthusiastically.
As our reader, you are one of the few who knows that the crypto revolution continues and will be extremely profitable for all those who participated in the right projects early enough.
The fundamentals did not change.
‘I wish I had bought coin X a year ago, I’d be a millionaire by now.’
How many times did you or one of your friends say that?
As the good ol’ Chinese proverb says, ‘The best time to plant a tree was 20 years ago. The second best time is now.’
The bear market like the one we’ve experienced in the last few months is the perfect time to plant your seeds which will flourish during the bull phase. The average crypto enthusiast will lose his mind every time there is a correction, but we want you to stay calm and realise that the cheaper you can invest, the more upside potential there is in the future.
Back in 2013, Bitcoin dropped from over $1100 to around $100 which seemed like a nightmare when you lived in the bubble of that very moment. However, in hindsight it was an amazing opportunity to accumulate, similar to what we’ve experienced in 2018’s bear market.
Whenever we’re in a bear season, instead of burying your head in the sand, look out for the projects that stand out. Plant your seeds before the bulls return and bring back the green euphoria.
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The China Gold Rush
It is 2008 and the global crisis leaves many with their jaws dropped to the floor. The subprime mortgage bubble bursts, negatively impacting economics around the globe and causing a meltdown of trillions of US dollars in consumer wealth.
It was a disaster.
After this major hit for investors, they began to look after another opportunity to recover their losses.
It did not take long for Wall Street to come up with the next way to make a bank. They figured out how to exploit the expanding Chinese market by something called a ‘reverse merger’.
Access to the Chinese stock market is very difficult due to government regulations, especially for Americans.
Some smart people figured out how to bring Chinese companies to US exchanges. This was accomplished by simply assuming the control of defunct American firms that still carry a symbol on the US exchange to these Chinese firms.
Where is the catch?
It is not illegal in China to file fraudulent financial disclosures in the United States.
In short, let’s say you have a company in China worth 2 million USD. You claim false papers in the United States that you’ve made 10 million USD in profits this year and then you merge with some defunct American company.
Another ‘fantastic’ opportunity to invest in a company that just hit U.S. exchanges shows enormous results.
As long as the new method allowed everyone involved to make money, nobody really questioned it.
The short term profit, however, made everyone blind for the inevitable consequences. On the top of that, the boom of the Chinese economy made it easier for people to justify the risky investment.
Between 2008 and 2012, around 500 Chinese companies were listed on US exchanges in this way. A group of people that found this loophole made enormous loads of money by throwing other people’s savings and pension funds into these investments. It goes without saying that we, here at London Letter, condemn such behaviour. Among other reasons, this was the major reason we came to be.
It is not just speculators who were moving money around. Average Joe investors were also participating, completely unaware of the scammy nature of this procedure.
A bunch of people from Muddy Water Research got suspicious and organised a trip to China to get a first-hand overview of these Chinese ‘unicorns’. It turned out that most of the companies that claimed millions of profits were nothing but obscure buildings hiring a few farmers to fake some activity. Soon after these findings came to light the bubble burst, resulting in billions of losses in consumer wealth.
Although the entire process was based upon several loopholes, we believe the key to making it all happen was the ability to fake the profit sheets of the Chinese businesses.
Was all this avoidable?
Maybe. Currently there are no tools that would allow for a more reliable insight into a true financial state of a company. Instead, we have to rely on third party audits, which in this case failed enormously.
However, there is hope on the horizon.
It’s called Request Network.
The regular crypto enthusiasts refer to it as PayPal 2.0.
While this is true and REQ is indeed the new PayPal on the blockchain, the ‘Pay with REQ’ button is just the icing on the cake. The Request Network project goes far beyond a new payment option. Curious on what other innovations it brings to the table? Learn more by reading our following review.
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Accounting is absolutely essential in today’s world and there is no way around it.
Unfortunately, the way we do accounting today is far from perfect. In order to trust each other many businesses have to hire expensive auditing firms which have to go through all the paperwork of the company to verify their records.
This also is open to human failure, which is unavoidable. If it wasn’t, the stories like above would not have happened.
If you have ever had to deal with invoices you know that it can be a huge pain in the ass. Not to mention that all the paperwork is still required to be printed in many countries by law.
On one hand, we’ve got Elon Musk shooting his Tesla to the orbit and other unreal stuff happening in the tech world. On the other hand, the accounting industry still hasn’t adapted to the 21st century even though every business is obligated to fall in line.
This, however, creates an amazing opportunity for Request Network.
What is their solution?
A standardised ecosystem beyond the countries’ borders. Just like the internet has a set of rules and protocols to which developers from all over the world adapt, we believe a similar set of standardised methods for accounting and auditing can be applied using blockchain.
Request Network is on their way to turn this vision into a fully working product.
Imagine a system where a payment itself becomes an invoice. No more need for sending papers back and forth to confirm that the particular transaction has occurred. No more problems with the IRS for missing statements. No more overwhelming work and expenses during the tax season as everything is clearly visible in the public ledger.
Sounds too good to be true?
Request Network recently made the first step to make this a reality.
On 30 March 2018 the Beta Mainnet was launched. This platform enables anyone to issue an invoice on the blockchain. Below, we’ll give you a short overview of the platform because it’s already truly impressive.
Please keep in mind that the current version is not mainstream-friendly, yet. But early adapters and investors, who can play around in order to understand the core functions of what Request Network is capable of, can get a pretty good idea of what’s in store.
After heading to the main site, we are presented with a neat interface.
Requesting a payment is child’s play. Currently, the system supports only ETH payments whereas other ERC-20 tokens are soon to be added.
Let’s say you sell T-shirts online and someone purchased a white one from you.
By filling out the amount in ETH and the Payer’s ETH address we head over to confirm that with a click on the ‘Create a Request’ button an invoice on the Ethereum blockchain will be created.
This is how the invoice looks from the issuer’s perspective. The options are visible only when you have your Metamask connected throughout the process.
From this point, you can simply copy the url from the box in the top left corner and send it to the person who owes you money for your product. You can also update the requested amount anytime.
The screenshot below presents what the receiver sees after opening the invoice. From there only two clicks separate him from making a payment. Keep in mind the Metamask is active in the background.
After the successful payment, a complete invoice is presented for both sides which looks like this:
The confirmation of the payment for a white T-Shirt between those two addresses will be stored on the blockchain forever. The reason (look at the screen above) for the transaction is stored on the blockchain as well. The invoice has a unique ID (top right corner with an issued date). The history of any changes is clearly visible in the left column.
No one can fake the amount of money that was being transferred during this process.
This is revolutionary.
The invoice turns valid only once the payment has been confirmed and either payee or payer doesn’t have to store the invoice on their own.
Obviously, what was described above was a manual process which will be automatically handled by the apps created upon the Request Network.
And we couldn’t be more excited about what is yet to come.
Request is not an app
It is a layer on top of Ethereum that other developers can utilise for their own dapps. If you read our previous issues, you can observe a pattern. We put a lot of pressure on projects which aim to create their own platform or ecosystem with various branches.
Request Network is no different.
Let’s take a broad view of the mindmap of the Request Network ecosystem created by their phenomenal team.
Click to zoom: https://www.mindmeister.com/991002501?t=R1iofDilV0
There are plenty of use cases, starting from salary softwares, accounting, crowdfunding, lending and many, many more.
Their vision reaches far and beyond general use cases though.
As stated in their roadmap, in the first quarter of 2018 they managed to deliver the Request Mainnet that we just described, a partnership with PwC – which is important and we will touch on that in a moment. Not to mention the ‘Pay with Request’ button that third parties can start implementing on their own sites.
Why then is REQ token price so low?
Besides the heavy bear market we’ve seen, there are two other factors that keep the price low. For now.
Accounting and auditing are the two main things the Request Network focuses on. The truth is that average people don’t bother with these terms on a daily basis. Oftentimes, it’s difficult to explain and the wider audience takes longer to realise the benefit of REQ’s accounting solution on the blockchain.
It is a platform. Due to its wide spread potential use cases, it can be difficult to pitch the concept when compared to a single purpose DAPP you could easily describe in one sentence.
Once DAPPS built around the Request Network start popping up to the wider audience, we expect that the value of the REQ token will increase organically, since they’re being burnt when the participants use the network. We will go into more detailed on that shortly as well.
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In Team We Trust
If you’ve read our previous issues, you know that we pay a lot of attention to the ‘team’ part of every project we recommend. At the end of the day, an idea means nothing without proper execution.
This is why we make sure there’s always a solid team behind any cryptocurrency we invest in. They’re the foundation that’s going to help us survive a potential FUD or bear market that is part of the crypto game.
The team behind REQ is indeed an impressive one. These guys are not just a bunch of random people with a common goal. They actually have worked together in the past for terms ranging up to 6 years.
Knowing that the team has previous accomplishments (e.g. ‘Moneytis.com’ which was backed by ING bank accelerator) and work history gives us more confidence in their ability to reach their goals for REQ.
Furthermore, they come from different backgrounds including finance, pharmaceutical, fintech, consultancy, research and more. Together, they’ve got what it takes to revolutionise the blockchain fintech world.
If the modest recognition from London Letter is not enough for you, then get ready for this giant who decided Request Network is worth their investment.
REQ took part in Y Combinator which is one of the best startup incubators in the world. But don’t take our word for granted. Let us present some of the facts about YC so you can see how important this is.
First of all, their acceptance rate is ridiculously low sitting at 2%.
Additionally, some of their participants include Coinbase, Reddit, Airbnb, Stripe and more. These unicorns we just named probably all sound familiar to you. That’s because they not only dominate their industries but literally change the world. Y Combinator works with the best of the best so for us to see them working with REQ team is an extremely bullish sign.
Request Network is on the right track to change the world just like the big boys above but in this case, you can still get in early.
What we also like about Request guys is their approach to updating the community on progress. It’s very transparent and honest. Their updates are published frequently and include a lot of details and if they didn’t accomplish a milestone as planned, they explain exactly why. It’s not uncommon to see teams trying to hide their failures by hyping some other news. So it’s a relief to see that REQ is the opposite.
Take the implementation of the Bitcoin Oracle as an example – which they planned to release in Q1 this year. The team fully admitted that they did not manage to deliver simply due to not finishing the project. A red flag?
Considering the currently delivered work, we see this kind of explanation as a very good move to be completely honest with the investors rather than washing our eyes with big, yet false, promises.
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It is already clear that Request Network creates an ecosystem upon which other companies can build and integrate their own applications. Although they offer an open documentation for developers to play around, Request team is not sitting back and drinking cocktails waiting for the community to build the first apps upon the Request Layers.
As stated in their recent March update, they have begun to develop their own dapps.
The first is the payment app which, in our opinion is the most important one for now. Request recently published documentation for developers so that they can play around with the ‘Pay with REQ’ mechanism, but we know that it is not enough to bring this function to the mainstream.
A payment app with a nice user interface, dashboard and the features fiat apps currently possess is definitely the way to go for online payment integrations.
The second and also very important feature they are working on is the accounting app integrated into crypto financial flows that will help people with their tax declarations.
We all know very well that taxes, especially in the crypto space, are a pain in the ass to track. Taxing each transaction? How do you track all of them? We could debate all day long…
The business which solves this issue first will obviously enjoy a lot of attention with no competition and give some significant gains to investors.
As much as the buzzwords like ‘fast’, ‘low fee’ and ‘transparent transactions’ sound cool, the companies that will bring the crypto closer to the masses will be the first ones to solve the common issues of the current crypto community in the first place. From there, the step forward to the average Joe is much, much easier to take.
And we have strong fundamentals to believe that the Request Network is in the right shoes to take all the necessary steps.
Request Network Partnerships
On March 28 a partnership with PricewaterhouseCoopers France (PwC) and Francophone Africa was officially announced. PwC belongs to one of the Big Four largest accounting companies in the world.
This is definitely one of the biggest partnerships of the crypto space announced this year so far. The fact that the accounting giant looks for a way to expand its activities into the blockchain space is a clear sign for us that we’re looking at an undervalued cryptocurrency that has a lot of room to grow.
PwC France partnership also raised some controversy in the crypto space. Often discussed was the fact of PwC France being just another branch of some larger PwC and that the partnership is way too hyped. People say it would be more serious if it was PwC US.
Well, what we are about to present will prove that it is just as serious as if Request had partnered with the US branch.
First of all, the Request Network founders and the core team are French. So it is very natural from the organisational point of view to have a partnership with a branch in your base country rather than with one on the other side of the ocean.
Secondly, there is no such thing as the PwC US holding the rest of the branches in its grip. PwC is kind of decentralised, where each branch is a separate entity operating on its own.
Lastly, PwC France carries a lot of weight in the European Union. This will especially be true after Brexit happens. It makes more sense to partner with them than, let’s say PwC UK which is in the process of leaving the European Union.
For us there is no doubt that this partnership not only opens the doors to all the PwC branches, but also its wide range of clients which is the perfect customer base for Request Network to utilise.
Request and Kyber Network
Kyber is an instant decentralised crypto exchange service.
Let’s say that you hold only POWR tokens and you want to buy a white T-shirt from us, but we accept only ETH. Thanks to the Request Network payment gateway and Kyber working in the background as the gatekeeper you won’t have to sell your favourite ERC-20 tokens for ETH to buy a T-shirt on some exchange. Instead, with one click on the ‘Pay Now’ button Kyber is seamlessly in the background going to convert your token to the exact required amount of ETH at the best rate.
Both teams have realised that their projects fulfill each other. Some of the Request team even moved to Shanghai for a couple of months to work closer together. This is a serious step, especially for us investors, who are pretty excited to see what they came up with.
Another partnership that can’t go without mentioning is the one with iExec. If you’ve read our previous report, you already know iExec is working on a ground breaking idea. That is why we’re more than happy to inform you that iExec CEO is an advisor to the Request team.
Their partnership allows both teams to benefit by utilising each other’s know-how in their respective areas of expertise. iExec assists with developing a decentralised auditing algorithm which is aimed to allow companies to run their own financial audits. In return Request helps iExec deal with finances (like accounting, regulating financial interactions between sellers and buyers or streamlined auditing).
Although there is more partnerships than we’ve described above, we decided to show you the ones we believe to be the most important.
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The Silent Kickstarter
If there was any way for you to invest in WordPress back in 2003 you’d be sitting on a fortune right now.
Have you ever heard of it?
WordPress is a content management system (CMS) that powers 30% of all websites on the internet. Given the fact, that there are 200 million active sites (and growing!) we can easily calculate that WordPress is used for around 60 million of those sites.
Simple question: Why do people create websites?
For various reasons, like blogging, business, portfolio etc. In fact, it’s hard to imagine a business that wants to be taken seriously and doesn’t have a website.
But, what’s important to notice here is that a lot of websites are created because people want to monetise their work.
Monetise by selling products
WordPress is similar to LEGO. You can customise it with plugins in any way you want. Think of plugins as bricks.
WooCommerce plugin is a notably important feature which anyone can apply to their WordPress website. It accounts for powering more than 42% of eCommerce websites on the entire internet. Its simplicity and easy-to-use interface allows anyone to build and run an online shop.
Within a few clicks you can create a checkout with a gateway which is the key to get the buyers to pay for your products. Woocommerce plugin became so popular that it has its own plugins now.
But what does Woocommerce have to do with cryptocurrency?
The key to crypto mass adoption – WooReq
A sub-plugin for WooCommerce is the answer, where store owners can easily add a ‘Pay with Request’ button next to the fiat options (or instead of them).
Looks awesome, doesn’t it?
We strongly believe that WooReq is a silent Kickstarter not only for Request Network but also the entire cryptocurrency industry. It will not only allow crypto users to buy products online but also contribute massively to overall crypto awareness. As WooCommerce powers enormous amounts of websites, imagine what is going to happen once people start noticing the ‘Pay with Request’ button during checkout.
WooReq is so important it just can’t be overlooked when talking about Request Network. WordPress and WooCommerce are open source and free. So is WooReq – and there is more…
This plugin does not apply fees to its creators. This fact alone presents a huge threat to all the other crypto payment gateways out there.
A feeless payment gateway? You might wonder, what’s the catch?
Currently, one of the biggest players out there is Coinpayments which not only takes 0.5% on each processed transaction but also requires users to leave the merchant’s website to make a purchase. Neither the seller nor the customer likes to do that.
WooReq beats all of them with its 0% transaction fee and on-site payment processing.
REQ holders will directly benefit from this, as each time a transaction on the Request Network occurs, the burning mechanism kicks in.
REQ under the hood
In this section, we’ll give you some insight into the technical structure of REQ by explaining its essentialities.
Just like a good lasagna, REQ is made up of layers. They are built atop each other, thereby creating a complementary ecosystem, as seen in the visual below:
The first layer is the foundation of REQ. It manages the ledger and keeps track of the transactions. It is based on the ETH blockchain which is obviously a great advantage for Ethereum and ERC20 invoices.
Another amazing functionality based in this layer is automatic detection. Imagine the following scenario: Alice owes you money and you owe money to Bob. If Alice issues a payment request from Bob, the system would detect those dependencies and automatically offer compensation for those bills.
To encourage the usage and further development of solutions based on the Core Layer, its usage is free – the only cost is the Ethereum gas.
Whereas you’re able to perform basic payments on the Core Layer, there are cases where one often would like to include some additional information into the transaction.
For instance, take a payment request from a company. Such transaction may only be completed with additional information such as payment terms, taxes, advances or escrows. All of these conditions can be added to this layer as an extension.
Another use case for an extension mentioned in REQ’s whitepaper is rerouting taxes in real time to government agencies, thus making the majority of a company’s tax calculation and payment process obsolete. After a purchase of a product, 13% (or whatever the number in your country is) of VAT would go to the government and 87% to the recipient enterprise.
If you’ve read our previous reports, you know what we make out of solutions which are simplifying day-to-day processes and as a result save people or companies money. The real-life use of REQ described above is another perfect example of this. A token whose usage literally helps people save cold hard cash is exactly the kind of investment worth putting in your portfolio.
Utilising this layers’ methods comes with a small fee paid in REQ tokens. Its purpose is twofold. Firstly and obviously it keeps the network running and secure. That’s really nothing new since virtually all cryptocurrencies enforce a fee for this purpose in one way or another.
The second reason is far more interesting. It’s the previously teased burning mechanism. With each transaction a dynamically calculated amount of REQ is being burned. You can imagine it as literal burning of money. Why would anyone want to do that?
Well, as they say, some men just want to watch the world burn. On a more serious note though, let’s be clear. We’re talking about really tiny amounts here – that’s why it’s being constantly adjusted. The reason behind this ‘money burning’ is simple: it’s yet another incentive to use REQ’s ecosystem and ensure that the tokens gain value.
If some miniscule amount of tokens are being burned with each transaction, it makes holding REQ even more lucrative since there is less there. Think of it this way: your 10 BTC would be worth a lot more if the total amount of Bitcoin were to be reduced from 21 million to 2.1 million.
That’s the basic idea behind REQ.
In the beginning, transactions burn at a greater rate due to greater total coins in existence. For instance, one transaction might cause 10 REQ to be burned out of 1,000,000,000 total coins. But as time passes, that amount may be reduced to 0.0001 REQ out of 100,000.
That way the deflation of REQ isn’t bound to any specific payment method – it doesn’t matter whether the payer pays with BTC and payee receives fiat. The REQ fee is burned regardless of the individual payment preferences.
As mentioned, there are also other incentives ensuring that REQ gets used in the ecosystem. For example creating advanced requests or rewarding parties which help the ecosystem expand.
This layer will be the one that nicely wraps up the functionalities of the previous two and enables an incredibly easy interaction with the end user. Hell, it’s even probable that most of the casual users won’t realise that they’re using crypto.
The use of this layer is relatively straight forward. An entity, be it a bank, government institution or a website like Coinbase, wants to use one or multiple utilities described in the Extension Layer. It simply connects to Request via the interface or an API that the REQ team will provide. From there it can easily connect accounting, payment system, audit, tax, debt collection and recovery etc. Once this happens, they can access invoices of a user and offer to pay them instantly.
A feature not to be overlooked is the Reputation System, also built into the Application Layer. Just like the name suggests it tracks how trustworthy any one given company or user is. It does so by taking into consideration various criteria, such as the number of invoices not paid on time or the number of rejected payments by other users issued by a phishing company.
Since the negative reputation will be penalised, it’s natural that a positive reputation should be gratified. Members with the best reputation will get access to custom extensions or receive a different type of cost reduction.
The mere existence of these layers incentivises a whole spectrum of users to
utilise and extend REQ’s ecosystem on any layer they find most suitable for them, be it basic payments on the Core Layer, creating customized extensions on the Extensions Layer or connecting your payment system to the REQ ecosystem.
Were you lucky enough to invest in a property 20 years ago that has doubled in value? Or buy an asset that has made you incredibly rich?
Now is the time to put yourself in that position 20 years from now. By planting the seeds of REQ today we all will get to see the green of its leaves bloom one day. Or should we say b(l)oom. Both figuratively and literally.
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