Snappy speeds up payments with cryptocurrencies

The Swiss Federal Institute of Technology in Zurich (ETH) writes in a press release that trade with cryptocurrencies such as Bitcoin and Ether is already established. However, paying with cryptocurrencies is very different. For instance, it can take a whole hour for a Bitcoin payment to be approved. This takes three minutes for the currency Ether, which was designed from the start to be a complete replacement for conventional money.

The reason for the slow payment process is that cryptocurrencies are based on blockchain technology, so data must continuously be synchronized on thousands of servers involved. There are already solutions to speed up payment processes with cryptocurrencies, but these remove the blockchain. This means that two important advantages of cryptocurrencies are lost – transparency and security.

Researchers from the ETH have now developed a new payment system that does not need the blockchain element to be removed but still speeds up the payment process. This solution is called Snappy and it is based on a digital deposit system. With this, customers place a deposit of the same value in addition to their purchase amount. However, this is only kept until the digital currency payment is confirmed.

ETH Professor Srdjan Capkun explains that the solution “allows the seller to immediately confirm the payment without running the risk of losing the sum.” According to the ETH, Snappy could be integrated into apps. In practice, customers and sellers will not notice the deposit security system working in the background.