Published on: 2017-12-21T09:04:44+00:00
Nicolas Dorier has proposed the Crypto Open Exchange Protocol (COX), a standard that allows merchants to accept cryptocurrency payments and sell them automatically. The protocol aims to reduce transaction fees for merchants and provide more flexibility in choosing payment processors. By decoupling payment processors from exchanges, COX helps local exchanges lacking resources to develop their own payment solutions. The COX protocol offers an address source creation wizard that allows merchants to specify what to do when cryptocurrency is sent to the address source. It also provides an "address source URI" that can be input into the payment processor. An exchange compatible with COX would respond to HTTP POST requests to the address source URI by providing a deposit address, current rate, and optional details about rate fluctuation risks. PROCCO, a payment processor, has developed a Crypto Open Exchange Protocol that enables e-commerce websites to accept bitcoin payments. It retrieves the rate and conditions from the address source URI and presents a Bitcoin Payment Checkout page when a customer pays in bitcoin. After the payment is made, PROCCO marks it as paid and redirects to the e-commerce website. MYCOIN credits the merchant's account with the received amount of bitcoin and creates a market sell order on behalf of the merchant. The response from an exchange varies depending on whether the rate is guaranteed or not. Although the adoption of COX is not mandatory, local exchanges have incentives to implement it. Alternatively, an adapter server can be developed to expose COX endpoints and connect to underlying exchange APIs. The COX protocol is dual-licensed as BSD 3-clause and Creative Commons CC0 1.0 Universal.In addition to decoupling payment processors from exchanges, COX aims to simplify the payment process and reduce potential risks for merchants. It proposes adding an invoice mechanism similar to Lightning, where a pre-image is sent to the user's wallet upon receipt of funds. This pre-image can be presented to the merchant in case of any issues, alleviating the burden of dealing with user support requests from exchanges. The protocol could also be expanded for Lightning and include a callback from the exchange to confirm payment.COX offers merchants more flexibility by allowing them to choose their preferred method of payment using buySymbol and sellSymbol instead of currencyCode and cryptoCurrencyCode. This change would make the system more generic and enable merchants to easily switch between different cryptocurrencies without limitations. It promotes the use of different cryptocurrencies as more merchants would be willing to accept them as payment, providing greater choice and flexibility for both merchants and customers.Overall, COX is a simple protocol that addresses the issues faced by existing cryptocurrency merchant adoption solutions. It gives merchants the freedom to choose their own payment processor solution while protecting against cryptocurrency volatility. The draft of the COX protocol can be found on Github and is dual-licensed as BSD 3-clause and Creative Commons CC0 1.0 Universal.
Updated on: 2023-08-01T22:21:18.489772+00:00