People like you and me think it’s easy to get a coffee from your local coffee shop. Take your card and put it near the reader when you go there. As soon as we finish our part of the deal with the merchant, we might think they will get the $5 we paid them right away. As it turns out, that isn’t the case.
Many things happen behind the scenes when you use your card to pay. In this case, your data will be sent through banks and payment companies like Visa and MasterCard. They also charge a fee for all of this, which the merchants lose. Merchants also have to deal with fraudulent card charges, which cost them more than $25 billion in 2019.
All of this is, of course, a problem, and as you may have heard, there are hopes that cryptocurrency will at least partly solve this problem. However, there isn’t yet a payment ecosystem around cryptocurrencies that is ready. If you want to pay with a cryptocurrency, the most common way is to use a crypto credit card to do it. Not at all. That won’t help with the chargebacks.
As an example, Crypto. His Visa card is from Visa, and they charge the basic fee. Finally, you could transfer money from one wallet to another to pay for things with cryptocurrency, but there are a few drawbacks to that, too, like speed and security.
The Birth of the Amp
To get into the Amp Token, we first need to talk about Flexa, which has been talked about before. Flexa wants to be the payment network that can work with any software or hardware already out there now. You can solve the problems in the introduction with a mix of centralization and decentralization, so this is how you should do it.
Three people started Flexa in 2018. Trevor Filter, Zachary Kilgore, and Tyler Spalding were the three people who created it in 2018. Tyler Spalding is the face of Flexa. You’ll see him in most, if not all, of the interviews. First, Flexa had an ICO of the Flexacoin in early 2018. It was Flexa’s first round of money. Many big names helped Flexa get a lot of money in the last round of funding.
Pantera Capital and Access Ventures were two of them. Before the SPEDN app was released, Flexa had raised money in April of 2019. It made it possible for U.S. residents to pay with Bitcoin, Ethereum, and Gemini’s GUSD stablecoin for goods at more than 30 000 stores. Flexa added 10,000 more merchants in Canada after the launch and started taking Litecoin and Zcash.
During the summer of 2020, Coinbase said they would start selling Flexacoin. Hours later, Flexa announced that they were going to start selling AMP. Why did this happen? It seems that the technology behind Flexacoin didn’t allow for this. Users of Flexacoin were then able to exchange their money for Amp in a 1:1 ratio.
The Flexa and Amp
As we talked about in the previous section, the idea is to have a centralized payments operator and a decentralized network that makes it safe and trustworthy to use. Flexa is the centralized part, and AMP is the part that is not centralized, so that you might have guessed that.
Many things about how the company does business are private because Flexa is centralized. I found mixed information about which parts of the company are open source. They make it seem like everything on Flexa’s site is open source, but I’m pretty sure that isn’t true. But I’m sure that Amp is open source.
People often forget that card fraud is a big problem, and it can cost the business a lot. Some people know that exchanging one cryptocurrency for another isn’t quick to make things even more complicated. As a Flexa user, though, you’ll be able to get your money in no time.
When the merchant doesn’t have any money to back up the transaction, they could lose everything if it doesn’t work out. There are AMP Tokens used as collateral for each deal. AMP would be held in a smart contract as collateral if someone bought the coffee we talked about for $5.
If someone purchased the coffee, they talked about it for $5. There would be $6.50 worth of AMP held in the contract.
It is how it works: If a payment doesn’t go through for some reason, that locked AMP will get changed back into fiat and given to the merchant. So, where does that AMP come from now? It comes from people who invest in any payment providers that use Flexa, like SPEDN and Gemini Pay.
The Verdict
It’s clear that crypto payments are coming and that the current infrastructure needs to be changed so that crypto payments become commonplace across the world. With key partnerships already in place and more to come, it’s clear Flexa has a good head start.
At least based on their past associations, Flexa’s founders seem to know what they’re doing at least. Flexa and Amp both have a lot of unknowns, but I think I’ve already made that clear. A safe investment isn’t possible because of this. You can’t just hope that everything is acceptable under the bonnet.
People should keep an eye on the project. Not to make money, but to look at how crypto payments will change. Flexa is a big player in crypto payments, and it’s interesting to see where they’re going next.
Then, from an investment point of view, when (and if) all of the mysteries about Flexa start to be solved, it might be worth taking a new look. It would help if you kept in mind that both the vesting schedule and the fact that you can stop staking at any time are likely to keep Amp’s price from going up very much.
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