02. Introduction

Technological innovations and the rapid proliferation of digital devices have driven significant advancements, particularly in payment and financial services. Online and mobile payments have enabled individuals to access financial services from virtually anywhere, making transfers and transactions more convenient and secure. These innovations have accelerated the growth of the digital economy, making systems more profitable and efficient for both businesses and consumers.

The world is evolving faster and becoming more complex than we could imagine, creating a growing demand for more advanced payment methods.

Blockchain and crypto assets have long been considered practical solutions for next-generation payment methods. Various types of blockchains, cryptocurrencies, and related services have emerged as promising ways to solve existing issues in traditional payment systems.

However, their impact on conventional payment methods remains limited, and valuable services have yet to take root.

One of the key reasons for this is that many blockchains are not as efficient in payment applications as traditional systems like credit cards, mobile payments, or online payment solutions. The processing capacity of many existing blockchains is inadequate, and to be adopted by online stores and physical retailers, blockchain payments must match or surpass the capabilities of traditional payment systems.

Two critical factors for a successful payment process are TPS (Transactions Per Second) and Settlement Finality.

• TPS (Transactions Per Second): TPS refers to the maximum number of transactions that can be completed within a given period. It is essential for the timely and efficient completion of payments. TPS is determined by factors such as block size, block approval time, and the average message size of the transaction. Insufficient TPS can lead to longer settlement times, causing delays and inefficiencies in the payment process.
• Settlement Finality: Settlement finality is the foundation of trust between the parties in a transaction, ensuring asset security. It signifies that an asset has been securely transferred from one user to another without risk of tampering or fraud. Settlement finality typically means the payment is unconditional, irreversible, and definitively completed.

Both TPS and settlement finality are crucial for achieving successful and efficient transaction settlements.

As cashless payments increase, so does the volume of payment transactions. Typical mobile payment systems handle several hundred to a few thousand transactions, while major credit card companies can process between 4,000 and 6,000 transactions on average, with a maximum capacity of up to 50,000 transactions per second.

On the other hand, typical blockchain TPS is limited to just a few dozen transactions. The restricted TPS of Bitcoin and Ethereum has become a significant issue as the number of users and applications grows, leading to increased fees and longer confirmation times.

During the peak of the crypto boom in 2017-2018, for example, Ethereum's network became congested, resulting in a sharp increase in fees and delays in transaction confirmations. This congestion created inconvenience for users and highlighted the need for more scalable solutions.

To address scalability issues, leading blockchains like Bitcoin and Ethereum have been researching and developing new solutions. High-speed blockchains designed to process more transactions have also begun to emerge, aiming to increase throughput while maintaining security and decentralization.

However, the capability to process a large volume of transactions alone is not sufficient for payment and financial services.

Another crucial component for payments is settlement finality. Typical blockchains like Bitcoin and Ethereum do not provide the level of settlement finality required for payment and financial services.

For instance, credit card payments have a brief lag between entering a PIN and removing the card, and QR code-based mobile payments also involve a short delay before the payment is completed. This lag is because the store's payment procedures are not finalized at the point-of-sale terminal but must be approved by the core system of the payment network. However, in traditional payment methods, this delay is usually only a few seconds.

In contrast, typical blockchains cannot complete transactions within seconds like traditional payment systems.

When using Bitcoin for retail payments, it takes approximately 10 minutes for the transaction to be broadcast to the blockchain and receive approval. This is due to Bitcoin's 10-minute block generation interval, making it impractical for customers to wait in front of a payment terminal for this duration. Ethereum and other common blockchains can take seconds to minutes, or even longer, depending on network congestion.

Moreover, blockchain approval does not necessarily mean the transaction is final.

The time required for settlement confirmation in a blockchain varies depending on the specific protocol. Settlement finality in blockchain refers to the state when a transaction is considered irreversible and cannot be undone.

In a blockchain, transactions are added to a block, which is then verified by nodes across the network. The number of confirmations required before a payment is considered complete also differs between blockchains. Generally, the more confirmations a transaction has, the more secure it is.

For example, in Bitcoin, it is typically recommended to wait for at least six confirmations before a payment is considered confirmed. Each additional block added to the chain increases the security level, making it harder to reverse the transaction.

Mainstream blockchains rely on consensus mechanisms like Proof of Work (PoW) and Proof of Stake (PoS), which have proven effective in securing the network and preventing double-spending attacks. However, these mechanisms are not designed to guarantee settlement finality.

Due to these issues, despite the high potential of blockchain for payment and financial services, its use has been limited.

As a blockchain specifically designed for payments and financial services, UPCX employs a variety of consensus mechanisms and protocols to ensure faster and more efficient transaction completion, offering performance comparable to traditional payment systems.

In addition to high throughput and rapid settlement finality, UPCX provides financial smart contracts that enable advanced and sophisticated financial services. As society becomes increasingly complex, financial smart contracts will be a powerful tool for next-generation payment and financial services.

UPCX also includes an easy-to-use wallet app, hardware solutions for business applications, and blockchain oracles that enable seamless interoperability between the UPCX blockchain and non-blockchain systems. These features make UPCX a versatile platform capable of addressing a wide range of financial and payment needs.