CafeCoin’s Unique Blockchain and Benefits of Its Proposed Architecture

CafeCoin proposes that transactional costs and times can be lowered, and that merchants and consumers will want to make us of their services. Here’s why.

How Cafecoin solves payments

One of the most important members of any cryptocurrency network is the miner. Without these people, transactions wouldn’t be conducted, and new coins of that particular currency wouldn’t be created. These people use powerful hardware to solve complicated mathematical algorithms in order to add transactional records to the blockchain. However, these people don’t simply do it for free. They get rewards for successful blocks that they create, and depending on the amount of people who are currently mining that cryptocurrency, it can be quite difficult to finish a block in a timely manner.

It can also depend on the equipment a miner is using, but most miners already know that using sub-standard hardware can equate to lesser earnings. Miners will also choose the kind of cryptocurrency they mine depending on the rewards offered. The CafeCoin Foundation has also put this into account, and created an incentive structure that will benefit those who mine CafeCoin. There are multiple benefits that are geared towards properly incentivizing the miners, and at the same time also addresses the need for speed and cost in the proof of work algorithm and system. We’ll discuss more on that later, but we’ll first take a step back and look at the properties of the CafeCoin unique blockchain.

CafeCoin’s custom blockchain


Just like most other cryptocurrency, their blockchain is an open ledger of transactions that have occurred all across the network. However, to ensure transactions get completed and validated in a timely manner, the block size in CafeCoin, although liable to change, is at the same time restrictive. This means it has limited information scope regarding transactions, and this translates to having an efficient set of operational commands. What it sacrifices in terms of number of transactions stored, it makes up for in efficiency, and low transactional waiting time.

CafeCoin also gives users the ability to collect and share certain data regarding transactions done in the network. This includes more in-depth detail of the quantity of goods that were in the transaction, the sub-categories of products so as to give more details about the goods in the transaction, location of where the transaction occurred, and of course, the savings that were made due to the use of CafeCoin. The data may also include basic user information, which complies with anti-money laundering and Know Your Customer (KYC) laws in some jurisdictions.

This data is stored within the blockchain, and consumers will be able to share such information when they allow it. This can be done by sharing a store-specific key that is generated and stored within the CafeCoin mobile application. Possibly, stores can offer incentives to users who allow for this data to be shared, but it should be noted that the only data that merchants are able to see are their own, or transactions that they were are part of. This is the purpose of the app-generated, merchant-specific key.

 CafeCoin’s proof-of-work mechanism and incentive structure


Traditional proof-of-work algorithms, or mining, has been used to great effect by many cryptocurrencies, including Bitcoin and Ethereum. The algorithms consist of decentralizing the validation of transactions that happen within the network, validating the transactions between users, providing rewards so that large parties of users join in the validation through giving out of new coins, and creating a mechanism to introduce a new currency into the economy in a controlled way.

In order to combat speed and cost issues, CafeCoin proposes an innovative proof-of-work pattern that entices many miners to validate transactions, and at the same time discourage single large entities from monopolizing the network computing power. This will even out the playing field, as there have been instances in other cryptocurrencies wherein large entities have been able to monopolize most of the mining sector due to their mining rig quality and the amount of hardware they have.

CafeCoin proposes to have the CafeCoin mobile app have the ability to mine and validate transactions, for those smartphones with sufficient power. This will allow users to be miners as well, and they can receive Cafe rewards every time they validate new blocks. The new mobile app would be able to run CafeHash, and it would also be available for tablets and computers. More testing using the CafeHash protocol still needs to be done on mobile and desktop hardware though, so more details will come out as it progresses.

Although the CafeCoin mobile app will have the ability to mine, actual mining will only be possible by using devices that are registered and linked to a CafeCoin account. Aside from a unique print that is used to associate a device to the user account, there is absolutely no data or information about the device stored. Users have the ability to register multiple devices on the CafeCoin blockchain, but mining pools are strictly forbidden from joining in the validation process.

The thing with Cafe is that it can be used to pay for transaction fees, but cannot be converted to CafeCoin. Because users can generate their own Cafe, they can then do transactions with next to no fees, and only spend time and effort in validating other users’ transactions. Merchants can even offer specific promos or rebates for those who share the metadata. Through this, every user will have reason to help reduce transactional cost, and mining pools will have little reason to participate. The Foundation will still need to study the right balance for transactional cost and other factors, but it will surely be beneficial to all parties involved.

Although CafeCoin has considered multiple other protocols, the Foundation has determined that launching its own framework will be best considering the security of CafeCoin, as well as the desired utility for its users. With the implementation of the CafeCoin blockchain, the cost for transaction processing will be quite minimal compared to existing mobile payment costs. The Foundation even plans to split the flat fee among all participants to any transaction, so that the burden is lightened on any single user. With this, transaction fees are basically non-existent, and that particular block in large-scale use of café coin is removed. The OT cybersecurity has become necessary as protecting data is of utmost importance.

Advantages in CafeCoin’s architecture


The enhanced architecture CafeCoin has proposed gives many benefits. As with every cryptocurrency, there is no centralized authority that has the ability to settle or control transactions that are made inside the network. Another benefit of this is that even those users who had no access to centralized financial institutions are able to engage in mobile payment. The transactions users do are resolved within a few seconds at most. The extremely complex cryptography and number of digital signatures that need to be signed make sure security will never be an issue.

CafeCoin also gives customers the ability to show only the information they want shown to merchants. Multi-level permission-based information sharing is utilized so the user has complete control over who gives what. And if the building of the blockchain, and the development of the mobile app is completed, the cost of transactions is significantly minimized, to the point they can be considered inconsequential. With this, both merchants and customers are given a lot of incentive to make use of CafeCoin’s mobile application services and network.