Aerum: Customer Centered Business Focused Blockchain

I live in the Czech Republic. Our money is the Czech Koruna (CZK). I used to have a business for which its value vs the USD was important. In those days the exchange rate was about 35 CZK/USD. Then the price dropped to about 25 CZK/USD. My business ended. That drop took nearly two years. We had time to prepare, to look for alternatives, and finally to plan our exit. In the ensuing 15 years or so the price went from 25 down as low as about 14 CZK/USD but mostly floats at around 23 or so. I don’t need to look daily or even monthly.

Transaction Cost Unpredictability

I was recently in London where I rode the bus and bought fish & chips with my card without even looking at the exchange rate.

I also didn’t even stop to consider the transaction cost.

When I go to Paralelni Polis, a cafe in Prague that accepts payment only in crypto, it’s not that easy. I check the cost of the crypto I’ll pay in, I look at the cost of the transaction and often the conversion from fiat or whatever crypto I have to spend, I figure out how much real money the coffee will cost me. It’s a pain in the ass just to buy fucking coffee.

I have an ENS name. The idea is that you can send Ether based payments to nikpage.eth instead of to 0xda8Cdc55476C0F2E0A6284E4f3AcB052255BD877 (these are real, please feel free to try them out 🙂 ). It seems like a great idea, right? There’s a problem though. As with DNS names, regular domains like nikpage.com, I need to renew and send a payment every year. With my DNS domains I know that renewal will cost a couple bucks. With my ENS name, I have absolutely no idea how much it will be. I was at an ENS conference where we discussed this and they didn’t know whether to pin this cost to a fiat value or to make it open to bidding or what. That means that I don’t know if my name will be mine in a year or three. It could belong to anyone. I do know the 0xda… wallet will be mine. Guess which one I will use as a long term public wallet address? Here’s a hint — should you read this article anytime later than June 2019 and you feel inclined to send me some ETH, please use the long wallet key.

The uncertainty of cost has completely defeated the purpose of the simple, much more elegant ENS name.

One of the key values of any medium of trade is stability. No, not absolute, rock solid stability but predictable stability. My business ended due to currency fluctuation but in a way and time frame that I could plan it. It sucked, I liked the business, but it wasn’t tragic. A lot of money was at stake — we ordered container loads of stuff months in advance of shipping them halfway round the world to sell at contractual prices. There’s no way I’d expose myself to such risk in a crypto world. Hell, I don’t even know if the value of the ENS name will be worth the cost in a year. [ Note: The ENS conference was in July 2018. They may have solved this issue by the time you read this. I like ENS and I like the project — the criticism isn’t aimed at them but at the Crypto environment at large. ]

The volatility of the price of cryptos is one factor here but not the one I’m talking about. I am focusing on the cost of transactions.

I recently conducted an ETH transaction. I had the choice of it taking an estimated 4 days to complete or boosting the Gas price to about 80% of the transaction itself. That’s what I did — in the end the Gas fee was 40% of my total expense. Absolutely nuts. International trade and travel would end if that was the case in the Fiat world.

End User Transaction Fees are Bad UX

This is a UX issue. It’s a key one. Not only are transaction fees for end users utter nonsense, they are usually insanely confusing. No one but dedicated crypto geeks (like me) would even think of doing it.

At the beginning of the debit card world we would sometimes see a fee levied on the buyer. The most complicated one I ever saw was a simple percent of the purchase price. But even those vanished long ago. Now I see a price of 23 CZK, my local Fiat, and that’s what I pay. Because I’ve spend a lot of my career in banking, I know there are fees and a time lag between my payment and when the merchant gets the cash. But I don’t care. Most customers don’t spend a moment even thinking about it.

Key UX Problems

To sum up, there are two key issues here:

1) Cost uncertainty and unpredictability

2) Transaction fees for end users

Since mass adoption of crypto is something I’m interested in, not only professionally but also because I actually believe it can help create a better future, I was thrilled to see Aerum tackling these issues. [FULL DISCLOSURE: Aerum’s taking the end user’s experience seriously is a key reason why I chose to join the team.]

Aerum’s UX Solution

Aerum solves the first issue, cost uncertainty, in two ways. First off their model will keep transaction costs down by at least an order of magnitude from current ETH transaction costs (while maintaining transaction completion times of 5–10 seconds or better). No one will need to decide between speed and cost of transactions. They will always be cheap and fast. But the better solution is that anyone can, by staking XRM (Aerum’s EIP-20 token) generate Aero (Aerum’s native transaction fee token). The Aero can be used to pay for transactions or it can be traded on a secondary market. This means that a merchant can reduce her cost of transactions by holding XRM. Hold enough XRM and the transactions are free.

This is an incredibly powerful mechanism with a number of positive consequences. One of them is the solution to the second problem above, end user transaction (gas) fees. They are eliminated. The end user doesn’t need to know there are any such fees, much less need to know anything about GWEI, Gas and all that bullshit.

The end user will see something that costs 23 TOKENX and he will pay 23 TOKENX. Everything else will be, as it always should have been, the merchant’s business, not the buyer’s. End of the fucking story.

Business & End User Focus

I’m a big fan of Bitcoin and Ether. They have proven amazing and very valuable concepts. My comments are issues I see that need to be solved for mass adoption to happen, not design flaws per se. Aerum is a next generation crypto solution, the logical evolution. Aerum’s step up from the foundations laid by Blockchain V1 & V2 is to be able to take the businesses that want to use the potential of crypto seriously. The XRM / Aero mechanism solves a key business problem elegantly and it enables a value enhancing experience for the end user. It also provides a fundamental value base to XRM — something almost entirely missing in the crypto sphere and a fantastic reason to buy XRM as an investment. This is game changing and it’s why Aerum will become the 3rd largest cryptocurrency in a couple years.

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