To be able to understand such logic in a closed ledger setting, I will give you an example. PayPal which is a very familiar payment method for most of the end users. To be able to use PayPal, you should make a deposit in your PayPal account from your bank account. PayPal then offers you credit in your PayPal account. Then now you will be able to send PayPal credit to any person that trusts PayPal. The person who received the PayPal credit can convert it into fiat money using PayPal by withdrawing it to his bank or to a payment card or by using it to make purchases of goods and services.
In reality, such bridge entities effectively fulfill the same functions in the HydraNet network. The only difference is that all such bridge entities will be operating on the same HydraNet, so they are all able to call and transact between each other. This makes the setup much more efficient than that of PayPal. For example, HydraNet users will have an opportunity to send and exchange all the different bridge entity credits between each other. The power and capabilities of the HydraNet as an open global value transfer network will be far greater as compared to that of PayPal. This will eliminate the traditional technologies that depend on closed ledger systems.
Any institution is able to join the HydraNet as a bridge entity and model entities can be created
To utilize the full operation of the platform, Hydra aims at creating a director via partners, such as bank entities to promote the HydraNet and present its capabilities to other banks and institutions. In the mean time, any institution will have the decision to freely join the Hydra Net as a bridge entity. There are no qualifications between such entities. With such entities as bank entities and HydraNet will be independent of each other which means none will depend on the other to operate and therefore HydraNEt can perform the same bridge functions with any other bank that is ready to offer the bridge entity with HydraNet.
Cleat advantages over the traditional inefficient structures
There are some advantages in opting for the disruptive Hydra Protocol for interbank transfers. These include the following:
• Users will have no need in converting to the native digital currency of HydraNet to execute a transaction on the Protocol given its native currency agnostic nature, the sender of the funds will have to worry about a single fee which is the FX spread. This spread will be reduced given HydraNet’s algorithm that is designed to decrease transactions fees to be the lowest on the network.
• All transactions on the Hydra network will be expected to settle within a matter of seconds, and that means in real time. This will enable faster access to the user’s funds and thus improving the overall user experience, be it directly or indirectly via a bridge bank as well as improving working capital for businesses that are using HydraNet directly.
The existence of the bridge entities at both ends will simplify the transactions compliance in certain cases
If user interfaces are connected with the bank, then he/she will be able to access HydraNet KYC/AML and compliance qualifications around a client interaction via such bridge entities will be already in place and can largely remain unaltered. This makes it easy in a situation where transactions involve non-native currencies at both ends as well as requiring settlement and clearing in such fiat money.
Website: https://argentas.io
Whitepaper: https://github.com/argentasio/Documentation/blob/master/whitepaper.md
Twitter: https://twitter.com/argentasio
ANN Thread: https://bitcointalk.org/index.php?topic=4431900.0
Facebook: https://www.facebook.com/argentas.io
Telegram: https://t.me/argentas1
Medium: https://medium.com/argentas
Instagram: https://www.instagram.com/argentas.io
My Bitcointalk Username: marcuscolin
My Bitcointalk profile: https://bitcointalk.org/index.php?action=profile;u=1781890