pnbsp;A Payments-Based Cryptocurrency and Incentivization Network Marshall Hayner marshallmetalpay.co Abstract Metal is a blockchain-based system utilizing Proof-of-Processed-Payments to identify users, rewarding them for converting legacy fiat currency into cryptocurrency. It is a system similar to bitcoin but with a user-friendly interface and front-end that is similar to Venmo, Square or PayPal. Metal can act as a bridge to bitcoin or any cryptocurrency available. Many small businesses across the world prefer to only accept cash. However, in an increasingly cashless society, refusing to accept digital and card payments can be problematic. Put simply, Metal believes cash only businesses can benefit by adopting cryptocurrency as a new new of cash, as cryptocurrencies possess many of the same properties particularly around privacy, censorship resistance and fungibility. nbsp;In order to bring digital payments into a world that utilizes blockchain-based technology over some traditional banking rails, Metal expects to save consumers 4-5 on all purchases. Introduction Eight yearsafterthereleaseofbitcoin,cryptocurrencyhasstill yettogomainstream nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; nbsp;and achieve widespread adoption. The reasons for this canbeattributedtothese nbsp; nbsp; nbsp; nbsp; nbsp; nbsp; major problems nbsp;1 User experience and difficult learning curve nbsp;2 Lack of incentive for the layperson to get involved nbsp;3 Volatility in price 4 Many view bitcoin with suspicion due to sensational reporting from media nbsp;5 Questions around privacy 6 Lack of settlement finality 7 Legal uncertainty in the case of forks and hacks. nbsp;Bitcoin has shown currency can exist outside of the current nbsp;financial system. It is technologically resistant to counterfeiting via blockchain technology. However, this by itself is not inherently strong enough to spark a technological payments revolution. Rather, bitcoin is exciting and motivating entrepreneurs to build a better mousetrap. One challenge is that bitcoin is extremely volatile and scares away many would-be users due to the fact it is accepted almost nowhere, including brick and mortar businesses and online. Financial institutions, for the most part, avoid bitcoin. They are creating private blockchains to identify sources of funds as well as users on these systems. Using a centralized of Know-Your-Customer KYC identification and a payments plat, Metal proposes to fairly distribute cryptocurrency via Proof-of-Processed-Payments PoPP on top of the ethereum blockchain. Satoshi’s original vision for bitcoin was to distribute miner rewards fairly through Proof-of-Work PoW. However, we have seen mining become highly centralized in China. With a centralized group of miners, distribution of the cryptocurrency becomes highly skewed and becomes near impossible for the layperson to earn, instead forcing them to purchase through an exchange. nbsp;Without an incentive to purchase, cryptocurrency may never reach mass adoption. Metal proposes a system utilizing provable payments attached to verified identities to distribute currency. Anyone can participate to earn METAL as a reward for converting fiat to cryptocurrency. The goal is to provide all of the financial services small to medium sized businesses SMB might need, but can’t access currently. nbsp;Typically, cash-based businesses find it hard to get credit because they have no credit history. This has led to seeking alternative financing which comes with exorbitant fees and loan financing charges. The initial target market will be high risk merchants, cash intensive merchants, and merchants who already accept or want to accept more cryptocurrency. At a later stage, it will be to acquire traditional merchants like Square, Venmo and PayPal. Transactions Metal will offer services through software to make transactions accessible for regular users. This strategy will prove valuable as peer-to-peer payments are incentivized to leave traditional rails, opting for an open network of cryptocurrency payments. These transactions will settle faster and provide real world value beyond traditional cash-based payments. nbsp;The size of transactional volume from the traditional incumbents is staggering. nbsp;For General purpose payment cards with global brands such as American Express, Diners Club/Discover, JCB, Mastercard, UnionPay, and Visa collectively generated purchase volume of 20.422 trillion in 2015. They are projected to generate 54.891 trillion by 2025. These card-present and card-not-present payments for goods and services are generated by credit, debit, and prepaid cards. Cards issued in the United States held a 23.44 share of global brand purchase volume in 2015. That share will fall to 17.69 by 2025, even as card spending reaches 9.711 trillion, up from 4.786 trillion in 2015. nbsp;1The dollar volumes are massive as well. For general purpose payment cards with global brands such as Visa, Mastercard, American Express, Discover, JCB, Diners Club, and UnionPay had collectively generated 227.05 billion purchase transactions in 2015. They are projected to generate 604.10 billion purchase transactions in 2025. These card-present and card-not-present payments for goods and services are generated by credit, debit, and prepaid cards. Cards issued in the United States generated 36.35 of the global brand purchase transaction total in 1 Nilson Report 1102, January 2017. 2015. The U.S. market share is projected to fall to 27.63 by 2025, even as the region is expected to see transactions grow by 8.44 billion annually to reach 166.94 billion in 2025. nbsp;2With market capitalizations in cryptocurrency in the tens of billions today, as the industry scales and grows it will capture some of this market. Target Markets The market potential for unbanked and disenfranchised industry is worth billions of dollars. There are a number of industries that face problems accepting credit card payments. Often times this is due to the fact that processors consider particular businesses as high-risk. nbsp;Metal’s initial target markets are underbanked industries in the United States that are operating legally and are compliant with state laws. This focus will allow Metal to have reach into a multiple-billion dollar market in payment processing volume turned away by traditional payment companies because of high-risk status or vice. Traditional processors like PayPal and Square reject these merchants solely to avoid stigma, while Metal will welcome many of these industries. Furthermore, Metal will make cryptocurrency go mainstream for consumers through ease of use and promotion of multiple blockchains and tokens. Some example target markets may include Nutraceuticals - the sale of pharmaceutical-grade, standardized nutrients. Domestic US total annual revenue for the nutraceutical industry totals 74 Billion 2015, comprising almost 40 of the global market [1]. Cannabis - the legally regulated sale of pharmaceutical-grade, standardized THC/CBD products for medical and recreational use. The North American marijuana market posted 6.7 billion in revenue in 2016, up 30 from the 2015 [2]. Adult - the sale of adult store and online products, which also includes various s of entertainment media. Adult products are estimated at 15b, [3] while entertainment is roughly 10 billion [4] in the US. eSports - a of competition facilitated by video games. The US economy for esports online advertising, sponsorships, media rights, merchandise, tickets was estimated at 175 million for 2016, a 43 increase over 2015 [5]. nbsp;2 Nilson Report 1101, January 2017. Metal is also exploring other promising markets as well. This includes the gig or “sharing”economy. nbsp;A study by Intuit predicts that by 2020, 40 of American workers will be independent gig contractors. nbsp;In the developed world today, the total amount of gig workers is 3134,000,00. nbsp;4In addition, Metal will be attractive to cash intensive small businesses like bars and restaurants as well as the nascent DAO/DAPP economy. Reward vs. Penalty The current state of cryptocurrency is a penalty over a reward. In order to enter cryptocurrency one must have a fundamental understanding of the software that it runs on, the best security practices, ability to get in and out, avoid fluctuation and find the lowest possible fees. In addition, even armed with these skills, many users are forced to wait days for their payments to clear before they have coins on-chain. In the case of Metal, payments are approved or declined immediately and displayed as spendable off-chain credit until they settle on chain. This makes the entire experience unusable for the layman. Proof of Processed Payments PoPP changes the experience from an unpleasant penalty, to a simple reward. Earn crypto when you spend money, earn crypto when you receive money. Through PoPP and the Metal plat we are incentivizing usage and adoption of cryptocurrency and building an ecosystem for users and merchants. Incentives Metal does everything traditional payment apps can do. This includes peer-to-peer transfer and real-time invoicing. nbsp;With cryptocurrency integration and PoPP, Metal users will earn cryptocurrency for making normal payments. PoPP is a mechanism to incentivize people to leave fiat money for crypto currency. It gives people an opportunity to be a part of the financial system by giving them a financial history, which can enable them to open bank accounts and access other services. Merchants may purchase plat credit with METAL which will entitle them to a discount on all associated payment processing fees and a discount on merchant services. The use of the METAL token by merchants and individuals will drive adoption and thus usage beyond plat-based services provided by Metallicus Limited, the parent company of Metal. Merchants may also receive an additional 5 off payment processing fees for offering a discount when paying with METAL. 3 https//http- 4 http//.au/Reports/2016/Gig_Economy_August_2016.pdf nbsp;http//www.mom.gov.sg/newsroom/speeches/2017/0306-speech-by-min-lim-on-cpf-and-gig-economy-at-cos-2017 nbsp;http//.au/Reports/2016/Gig_Economy_August_2016.pdf nbsp;Many merchants will find it advantageous to offer the METAL discount to save on traditional credit and debit card processing fees. Due to the ability to save merchants on processing fees, consumers utilizing the plat will receive significant discounts when making purchases. nbsp;Owners of Metal will receive significant benefits in the of discounts 1 Discounts for Metal merchants 2 Discounts for customers paying with METAL 3 Discounts for consumers in the of heavy discounts on pay features 5Underlying Technology To implement a provably fair distribution model, Metal uses the public ethereum blockchain [6]. It uses Ethash as its Proof-of-Work for security. In an attempt to keep cryptocurrency distributed, the Ethereum Foundation chose an ASIC-resistant scheme [7], however this still does not make mining accessible to the layman. Proof-of-Work merely slows down the inevitable centralization and the inability to participate with consumer hardware. nbsp;Metal aims to be blockchain agnostic and recognizes the need for multiple cryptocurrencies. If cryptocurrency adoption is to take off it must utilize multiple blockchains. For example, many users wish to see the currency in terms of United States Dollars or Euros. For this reason Metal is using financial instruments that will offer stability. Metal recognized the need for Interoperability and Metal will use inter-blockchain exchanges to transfer between multiple cryptocurrencies and cryptoassets. Meanwhile, loyalty-based tokens that merchants can create will be on the ethereum network as well as METAL the token. Metal also recognizes the need for privacy-based tokens like DASH, Monero and Zcash, which will also be supported. Bitcoin is the underlying currency powering all transactions and purchases. However, this may change at a later time with sufficient volume to switch to METAL, ethereum or something different entirely. Proof-of-Processed-Payments Proof-of-Processed-Payments PoPP acts as a provable way of identifying users and distributing new currency into the system. At the same time, it rewards users who convert fiat currency into cryptocurrency. For this identity-based, volume-dependent distribution network, Metal first identifies a user through a social security number or passport ID with identification software. Second, Metal gets a photograph on file, either a selfie or picture of identifying documents. Third, Metal can link a 5 Discounts will vary daily and merchant to merchant. credit or debit card number in preparation for processing a payment. If no credit/debit card is available, a user can sign up with only an email address and invoice credit/debit/ach accounts into cryptocurrency. Provided all data points check out and the registered name on the identification matches the name on the credit or debit card, Metal initiates a payment using proprietary anti-money-laundering AML and anti-fraud technology. The payment typically declines or accepts in under one minute. The pending payment notification shows on the transaction list for the receiver of funds. nbsp;When the payment is completely settled and the bank transfer or cryptocurrency issued, a portion of the gross amount of the payment is returned in METAL tokens. This is 5 of the volume of the transaction at trading value for MTL in either direction sender/receiver. As an example, 100 in MTL is sent. It is trading 1/MTL. Both sender and receiver would both get 5 MTL. In order for the receiver to claim the additional METAL, they must go through the KYC process and be identified as a separate person receiving the payment. If a user wishes to simply top-up their account with a crypto balance, they are eligible for a discount of the purchase price of the transaction in METAL, the parent company of Metal, collects fees for processing payments. Additional Features Plugins Plat like Wordpress and Drupal plugins to add Metal functions to websites and apps. Loyalty Loyalty issuance in the of blockchain and closed loop tokens for merchants. Split Payments Paying with friends is always better. Create an event and start a split payment, invoice the group and watch as you approach the goal. Escrow nbsp;Escrow-based multisignature wallet used for marketplace or auction purposes. nbsp;Ecommerce plat nbsp;Shopify-style ecommerce with Metal rewards as the key market differentiator. nbsp;Loan product Lending plat tied to escrow offering. Borrowers can be rated based on Metal rewards. nbsp;Microtransactions Sending very small amounts of money, which current payment processors do not support. nbsp;Branded payment card Metal merchants will be able to cultivate loy/p