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Utah Business

Silvermint wants to be the blockchain to rule them all

Pyrofex Corporation is building Silvermint with the intention of rivaling the world’s largest payment companies and blockchains, from Visa and Mastercard, to Venmo and Cash App, to Bitcoin and Ethereum.

In cryptocurrency, there are multiple generations of cryptocurrencies. Emerging cryptocurrencies and blockchains are looking to solve problems that early ones—such as Bitcoin and Ethereum —have. One of those is performance.

“Bitcoin and Ethereum… they don’t have the throughput to support end-users in the way that they want. Their transactions are too expensive and way too slow,” Pyrofex co-founder and CEO Nash Foster says. “If you’re sending payments of $1 million, or even $10,000 or $15,000, it might make sense to send them via Ethereum or Bitcoin. But if you’re trying to make a payment of $65 for your dinner in a restaurant, then that doesn’t make any sense at all, at this time.”

Eventually, Foster says, there will be one main blockchain network to rule them all. 

“I think it tends to be winner-take-all,” he says. “I tend to think that eventually there will be one blockchain network that constitutes the vast majority of the market, and then there will be a bunch of secondary players that fill niches that may be specialty environments or have specialty needs, but they will be hanging off the ecosystem of the major player.”

Foster believes Silvermint can be up there at the top due to its security and speed potential. On its website, Silvermint boasts acceptance of transactions in about 10 milliseconds, blockchain publication of transactions in about 500 milliseconds, finalization times of about two seconds, and the potential for 140,000 transactions per second.

According to The Street, Ethereum could only handle about 30 transactions per second as of mid-2021, though Vitalik Buterin, one of the founders of Ethereum, said Ethereum 2.0 may eventually be able to scale to 100,000 transactions per second.

Other newer generation blockchains like Solana, also looking to create faster, more scalable payment options, can provide similar transaction speeds to Silvermint, so Silvermint’s progress won’t be without stiff competition.

There are hundreds of blockchains out there, increasing all the time. It’s not just other blockchains that Foster and Pyrofex are out to catch, however.

“Obviously, the crypto market is very competitive, but we think that if we build something that’s just trying to beat another crypto, another blockchain, then we’re setting our sights too low,” he says. “We view the competition as the traditional finance industry.”

The public’s move from traditional methods of finance to new decentralized finance, if it is to happen, is not going to be immediate. The general public isn’t going to migrate from their tried and true payment methods if it doesn’t benefit them—though it’s not impossible.

Right now, for many people, apps like Cash App or Venmo are the gold standard of peer-to-peer payments. If you go to dinner with friends, need to split a bill, or even need to charge a roommate for your electric bill, many people will just send a Venmo request. The friend completes the request, and you can move the cash from your Venmo account to your bank account in a matter of days, fee-free.

Venmo represents the latest in the evolution of peer-to-peer payments. In the fourth quarter of 2021, Venmo had a payment volume of $60.6 billion, according to Statista, up from $6.8 billion four years prior. Prior to Venmo’s emergence, people still had to find ways to pay one another, whether that was cash, PayPal, or checks, all of which are still used today. The people that adopted Venmo did so because it’s more convenient than writing a check, so Silvermint will need to be more convenient than Venmo if people are going to move on from the app and others like it.

“Why would you switch off Venmo for some blockchain-based thing unless it’s better? What does it mean for it to be better? We’re working with some developers now who are looking at ways to innovate in that way, and I think we’ve got enough runway to come up with some pretty cool ideas,” Foster says.

Speed and convenience are important in the financial industry, from traditional credit card payments down the line, but security might be the most important aspect of any financial system and the crypto market has its fair share of hacks and schemes. A hack of the Ronin blockchain, which powers Axie Infinity, one of the most popular play-to-earn games in the world, resulted in the loss of over $600 million in March.

According to protocol.com, the hackers of Ronin, a sidechain of the Ethereum network, “got control of four Ronin validators being run on game studio Sky Mavis, and a third-party validator run by Axie DAO.” Five of nine validator nodes were enough to deposit or withdraw funds from the network, protocol.com said.

Sky Mavis, the company that developed Axie Infinity, said it would reimburse people that lost funds, according to Bloomberg. Bloomberg also reported that 173,600 Ether and $25.5 million USDC tokens were taken in two transactions, with 56,000 of those Ether belonging to the Axie Infinity Treasury. 

One problem is that, unlike a traditional bank heist, the chances of recovering those funds is low, Rishav Rai, lead investigator for blockchain analysis company Merkle Science told Bloomberg.

Foster says that Silvermint can build a network with thousands of nodes, and the Silvermint website states that more than 650 would need to be compromised to bring down one shard on the blockchain.

In March, Silvermint announced it had completed a $5 million private seed round at a $50 million valuation. Within the next year, Silvermint’s roadmap includes a live demo in Q3, as well as an ICO and mainnet launch in 2023.

Note from the editor: A previous version of this story had an error in regards to Silvermint’s roadmap. This has been updated with the correct timeline.