In 2019, Facebook announced that it was working on Facebook Libra. However, the proposed network has since faced a lot of opposition. Despite the stiff opposition to the project, Facebook’s scientists have continued working on a payments network. They recently published a paper on the research they have been conducting.
Facebook Scientists Propose New Payments Network
Facebook’s scientists at the Novi wallet division recently published a paper on a proposed payments network called FastPay. According to the scientists, the network can be used to settle crypto payments or provide the infrastructure needed to support fiat retail payments. During a test, the scientists achieved intra-continental confirmation of less than 100 milliseconds. They also managed to achieve over 80,000 transactions per second with up to 20 different payment authorities.
Solving The Challenges of Blockchain Technology
While the blockchain has led to innovations such as private transactions and personal wallets, their distributed nature has affected performance and scalability. In 2017, the Bank of International Settlements published a research paper that noted the ambiguity relating to settlement finality was one of the major barriers to the use of the blockchain in settlements networks.
The proposed FastPay network will solve these issues by allowing authorities to jointly maintain account balances. They can then settle pre-funded retail payments between accounts. According to the paper, the network would support sub-second latency confirmation. It would work great for physical PoS payments while providing capacity that is at par with retail card networks at peak volumes as well as real-time gross settlement.
The coauthors of the paper claim that FastPay will eliminate counter-party and credit risk during net settlement. Additionally, it will eliminate the need to use intermediary banks as well as the complex financial contracts between them, which are required to absorb risk. According to the coauthors, FastPay could accommodate arbitrary capacity via the use of efficient sharding architecture at each authority.
The FastPay Network – 7 Times Faster Than Visa’s Network
As part of the testing efforts, researchers built an implementation of FastPay on Amazon Web Services. It took three engineers about 2.5 months of work using a server that contained 96 virtual processors across Intel Xeon Platinum 48 physical cores and 384GB of memory. During tests, the paper claims FastPay supported up to 160,000 TPS under a total load of 1.5 million transactions across the 48 cores.
The speeds they achieved were about 7 times faster than the peak transaction speeds of the Visa payments network. They added that these speeds were achieved via commodity computers that cost less than $4000 a month to operate and maintain. During a latency test, they claimed that FastPay was able to transfer and confirm orders at a latency of less than 200 milliseconds for a client on the US West Coast. For a test customer in the UK, the latency was around 50 milliseconds.
The researchers admitted that the experiment was conducted under optimal conditions. They added that FastPay is strictly an experimental protocol. However, they have decided to open-source their implementation of the FastPay system, support scripts, and measurement data.
Use in Crypto Payments
The paper notes that FastPay can be used as a side chain of any crypto coin with reasonable guarantees of finality and sufficient programmability. Additionally, it can be deployed as a settlement layer for a native token and crypto coin in a standalone manner.
Facebook is one of the biggest companies to emerge out of Silicon Valley. They have access to numerous resources and expertise needed to create a fast payments network that could support crypto payments. While their research is still experimental, it could help to clear the path for the incorporation of crypto payments into the mainstream retail payments world.
Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the crypto currency they discuss. The information and content are subject to change without notice. Visionary Financial and its affiliates do not provide investment, tax, legal or accounting advice.
This material has been prepared for informational purposes only and is the opinion of the author, and is not intended to provide, and should not be relied on for, investment, tax, legal, accounting advice. You should consult your own investment, tax, legal and accounting advisors before engaging in any transaction. All content published by Visionary Financial is not an endorsement whatsoever. Visionary Financial was not compensated to submit this article Please also visit our Privacy policy; disclaimer; and terms and conditions page for further information.