Payments giant Visa has released a proposal that will allow Ethereum users to make automated programmable payments without the involvement of any third parties.
According to a recent crypto idea leadership positionThe company plans to achieve this goal by using a smart contract that acts as an intermediary between a user account and a contract account, creating a self-custodial wallet that is independent of banks or other centralized entities. Can make automatic recurring payments without participation.
While such services are already available to bank account holders and users of traditional financial companies, the capability is not currently available on blockchain networks. Therefore, Visa aims to be the first company to bring such capabilities to the Ethereum network.
“On the blockchain, these types of transactions are not so straightforward,” the company said, adding that it plans to deploy the solution on the Ethereum Layer 2 network StarkNet. Visa’s head of central bank digital currencies and protocols, Catherine Gu, who co-wrote the proposal, said:
“If one of the major use cases of blockchain is for payments, the basic requirement is that blockchain has to work just as well as it does today, if not better.”
Visa said they came up with this feature as a result of their Crypto Hackathon Challenge, 2022, a competition among company employees in February to see how an ETH owner could pay a bill with crypto at a future date, while temporarily away from form. Internet service.
As of now, there are two types of accounts on the Ethereum network: Externally Owned Accounts (EOAs), which are controlled by a private key, and Contract Accounts (CAs), which are essentially smart contracts.
EOAs can initiate transactions while CAs cannot. However, using Account Abstraction (AA), the idea of merging a smart contract and a wallet into a single type of account on the Ethereum blockchain, it is possible to create a smart contract that can initiate transactions on behalf of the EOA.
One use case for AA is the creation of “representative accounts”, which allow automation of payments through the use of smart contracts. Notably, the idea of AA dates back to 2015 and was initially proposed by Vitalik Buterin, co-founder of Ethereum. The proposal was formalized in 2017 as Ethereum Improvement Proposal (EIP) 86.
Ethereum balances on exchanges at historic lows
Large or “whale-style” wallets continue to pull their assets from exchanges amid the recent explosion of cryptocurrency exchange FTX and increased user confidence in centralized platforms. According to Bitfinx analysts, BTC and ETH held on the exchange are set for their biggest historical declines in 2022.
As mentioned, the world’s largest cryptocurrency exchange, Binance, saw over $3 billion Net withdrawal in a day last week. In a recent report, Bitfinix Said,
“BTC and ETH held on centralized exchanges have seen the largest annual percentage declines in 2022, both down nearly 20 percent. November’s percentage decline is the third largest monthly decline in BTC history and the fifth largest for ETH, both The percentage decline is the largest since 2017.”
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