It’s no secret that privacy and security are major concerns in today’s digital age. With the rise of blockchain technology, there has been a growing interest in finding more secure and private ways to conduct transactions online. One company that is at the forefront of this movement is COTI. Founded by Shahaf Bar Gefen, COTI strives to establish itself as the swiftest and most lightweight privacy layer in Web3. We recently had the opportunity to speak with Shahaf about his vision for COTI and the future of online transactions.
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Shedding Light On The Inception of COTI
Shahaf has been in crypto since 2016 and just one year later in 2017, he began working on COTI. His vision for the company was born out of a need to address the limitations and challenges associated with traditional blockchain technology. With over 100 talented people working on the project, Shahaf and his team have created a platform that is faster, more scalable, and more secure than traditional blockchain solutions.
As an infrastructure, developers can build dApps and financial services on top of COTI. There are other Ethereum L2s in the ecosystem but what sets COTI apart is their privacy centric ethos. Blockchains transparent nature allows for people to see transactions taking place between two addresses but they can’t see exactly what is being transferred and the balance amount.
“We are building what’s known as a confidentiality layer. We are an Ethereum Layer 2, so we enjoy all the strongest ecosystems and security features.”
Shahaf Bar Gefen
One reason why this is helpful is that businesses don’t want the entire world to know what they’re exchanging as it can give competitors an edge. Another reason is that transactions can reveal sensitive information about individuals that they may not want to be public knowledge. With COTI, users have a balance between transparency and privacy.
Shahaf further elaborates by using the example of credit card transactions. If the world knew what you were buying, and how much you spent at certain places, it could be detrimental to your privacy. It may not be illegal, but it could expose a lot of personal information. The future is decentraized but Ethereum and other blockchains are not built for privacy and scalability.
The Tokenomics and Purpose of $COTI
Shahaf continues the conversation about why being a layer-2 makes more practical sense than proposing changes to the Ethereum blockchain. Essentially, it would be too difficult to change the entire blockchain to accommodate privacy. Starting their own blockchain would be a hurdle as the network effects of users are already on Ethereum. With that being said, creating their own coin to fit their needs was still possible being an L2 and serves to create its own economy on top of Ethereum.
The COTI coin is the native token within the COTI ecosystem. As a DAG-based cryptocurrency, it facilitates transaction fees and supports various activities throughout the network. Shahaf exposed for the first time on Blockster that they are building a new node economy.
“Those that run nodes and stake will be the beneficiaries of the tokens that are minted to the ecosystem.”
Shahaf Bar Gefen
With developers being incentivized with the COTI coin, it’s expected that there will be more and more users on the COTI network within the near future. Cross-chain interoperability with assets issued on Ethereum/other blockchains allows for the integration of different projects and their users to interact with COTI.
This is a key factor in building a strong token economy, as it opens up more opportunities for usage and adoption. By being a layer of privacy, it also allows projects to take advantage of this feature without having to leave their blockchain ecosystem.
Researching New Use Cases For Confidentiality
As the leading project for layer-2 privacy solutions, COTI is constantly researching and exploring new use cases for confidentiality. This includes industries such as gaming, finance and more. To illustrate the importance of finding areas where confidentiality is crucial, the gaming industry has been a prime example. In poker for example, players are concerned with their opponents being able to read their strategies and potentially take advantage if they are able to see their cards.
“What people can expect is us announcing more of these use cases and the partnerships we are building.”
Shahaf Bar Gefen
This research is conducted professionally and package in a way that proves the use case and value proposition to the businesses that COTI is looking to partner with. This has become an important aspect of building a strong token economy, as it shows the versatility and potential impact of COTI’s technology in various industries. By expanding its reach into different use cases, COTI is able to attract a wider range of users and create more opportunities for adoption and growth.
CBDCs and How To Find The Right Balance
CBDCs built a negative reputation in the past few months as an anti-privacy initiative. CBDCs are Central Bank Digital Currencies and they aim to create a digital version of existing currencies that would be controlled and monitored by central banks. Due to this, many people have raised concerns about privacy and the potential for government surveillance. However, Shahaf brings up the important point that it depends on how the CBDCs are built and implemented.
Assets can be frozen by a central authority but to be fair, so can USDC and USDT, two popular stablecoins, which have been touted as decentralized despite the fact that their issuing company has the power to freeze funds. Although privacy is important, adhering to the “law of the land” as Shahaf says is also crucial for mainstream adoption and acceptance of digital currencies.
With that being said, “power of the people” is also emphasized by Shahaf in relation to CBDCs. Even if a CBDC is the official currency of a country, that doesn’t mean other digital currencies cannot coexist and thrive within the same economy. People can freely choose to not use it if there is too much oversight and control, which creates a natural balance in the market.
If people don’t trust fiat, they move to crypto. It’s as simple as that. We vote with what the money that we hold and Shafah believes this will create a healthy competition between CBDCs and cryptocurrencies, ultimately benefiting the people and economy as a whole.
Final Thoughts
An exciting 3-4 months roadmap is on the horizon for COTI, including the launch of their mainnet and various feature roll-outs such as the previously mentioned cross-chain capabilities and the node ecosystem. It’s no secret that more partnerships are and developers are building on top of the COTI network. With their unique features, strong token economy and growing community, COTI is definitely one to watch in the world of blockchain technology. As they continue to grow and innovate, we can expect to see COTI making a significant impact in the industry.
