Shifting the Narrative

3 min readJul 15, 2019

At 8Pay, our main aim is to provide merchants with a fully decentralized crypto payment solution. Through this protocol, we want to bring in fiat-like capabilities to cryptocurrencies by enabling single, recurring, and on-demand payments. We have realized that the current ecosystem desperately needs a decentralized payment protocol and in this article, we are going to tell you why this shift from a centralized protocol to a decentralized one is not just needed but is extremely crucial as well.

How does a centralized payment protocol work?

According to Wikipedia, a “payment gateway is a merchant service provided by an e-commerce application service provider that authorizes credit card or direct payment processing for e-businesses, online retailers, bricks and clicks, or traditional brick and mortar.”

Now, let’s look at the step-by-step breakdown of how the payment protocol works:

  • The customer goes to the merchant’s website and makes a purchase by pressing the order button and entering the payment details.
  • The customer’s web browser will now encrypt the customer’s information and send it over the merchant server.
  • The merchant sends the details of the transaction and the user to the payment gateway.
  • The payment gateway sends the information to the payment processor.
  • The payment processor finalizes the transactions and sends a response.
  • The payment gateway gets the response and sends it back to the merchant’s website and the customer.

So, if you break it down, the payment processor acts as a middleman between the merchant and the user. Since the processor deals with so much sensitive data, the entire transaction is entirely dependent on them working optimally. However, since they are centralized entities, they are vulnerable to a host of failure scenarios.

Vulnerabilities of a centralized system

Like we have mentioned before, a centralized system is completely dependent on the central entity to function at its most optimal level. However, what happens if:

#1 The processor decides to censor someone

These payment processors often have full control over which merchants they want to serve. What this unfortunately means, is that they can effectively censor anyone who doesn’t meet their criteria or doesn’t fit with their ideology.

Political commentator Alex Jones and his company Infowars were famously kicked out of their platform by PayPal for promoting “hate and discriminatory intolerance against certain communities and religions.”

Bitpay, the Atlanta-based digital asset service provider, updated its Terms of Use agreement to state that the use of the company’s services is subject to several important restrictions, including the sale of explicit sexual content.

The idea of a payment processor which picks and chooses their merchants goes against the very spirit of the free market.

#2 Someone hacks the processor

Since so much data is locked up in these processors, they become prime targets for hackers. Back in December 2014, more than 5,000 bitcoins were stolen from BitPay. BitPay Chief Financial Officer (CFO) Bryan Krohn was subject to an email account wherein the hacker got hold of Krohn’s corporate email id. The attacker then used that id to email BitPay CEO Stephen Pair, making him send 5,000 bitcoins in three different payments.

8Pay: Why decentralization is the answer

8Pay is a fully decentralized payment protocol, meaning we use smart contracts to control every aspect of the payment system. Since decentralization lies at our very core, there is no single entity in charge of the data inside our system. What this essentially means is:

  • There is no big boss making all the rules in the system deciding who gets to be the part of their network and who doesn’t.
  • There is no single point of failure in the system. This makes sure that our system is extremely secure from hackers.

Making the shift from a centralized payment protocol to a decentralized payment protocol will be hugely beneficial to both the merchants and the customers:

  • The merchants will be able to operate their business without the fear of getting kicked out of our platform.
  • The customers will be relieved of the fact that their money is in safe hands.




8PAY is an all-in-one payment protocol that enables quick and simple recurring transactions with digital currencies.