The rapid development of the internet over the past thirty years has greatly propelled the prosperity of e-commerce. However, the payment segment has long lagged behind the development of internet technology, becoming a key bottleneck that restricts further growth. Marc Andreessen, the founder of Netscape, once referred to this as the "original sin" of the internet. As early as 2019, he pointed out that browsers should have built-in functions for "spending money," but the lack of an effective economic system at the internet's core has led to significant social costs. Traditional payment systems rely on centralized institutions for transaction verification and settlement, which not only increases transaction costs and reduces efficiency but also brings numerous security and privacy issues. Today, the emergence of the decentralized finance (DeFi) protocol Anvil attempts to provide new ideas for solving this "original sin" by reshaping credit and payment infrastructure.

1. The Chronic Issues of Internet Payments: High Costs and Centralized Dependence

The drawbacks of traditional payment systems have long existed, with their high costs and excessive reliance on centralized institutions being two major problems that have plagued the internet economy for years.

High social costs: Economic research shows that in the United States alone, the total cost of retail payments reaches 2% of GDP, nearly equivalent to the defense budget. This includes various fees such as bank charges, credit card processing fees, and fraud losses. These costs are ultimately passed on to merchants and consumers, severely restricting economic efficiency.

Centralized dependence and inefficiency: Traditional credit card payment systems rely on intermediaries such as banks and payment networks (like Visa and Mastercard) for transaction verification and settlement. This leads to complex transaction processes and slow speeds, especially in scenarios like cross-border payments, where inefficiency is even more pronounced.

Security and privacy risks: Centralized payment systems have a single point of failure risk; if the system is attacked or malfunctions, it can lead to massive financial losses and data breaches. Additionally, centralized institutions hold a large amount of user payment data, posing potential privacy leak risks.

Financial exclusion: Billions of people worldwide still lack access to basic banking services, being excluded from the traditional financial system. This makes it difficult for them to participate in the digital economy, exacerbating social inequality.

2. The Original Intention of Bitcoin and the Revival of Decentralized Payments

Satoshi Nakamoto created Bitcoin with the intention of building a "peer-to-peer electronic cash system" to achieve value transfer without intermediaries. However, as the cryptocurrency market developed, many projects gradually deviated from this original intention, focusing more on speculation and investment attributes. The emergence of Anvil marks a renewed focus on decentralized payments within the industry.

The original vision of Bitcoin: Satoshi Nakamoto clearly proposed the vision of building a decentralized, trustless electronic cash system in the Bitcoin white paper. The blockchain technology of Bitcoin provides the technical foundation to achieve this goal.

Payment innovation under the DeFi wave: The rise of DeFi has brought new development opportunities for decentralized payments. DeFi protocols based on smart contracts can automate transaction execution and settlement without human intervention, thereby improving efficiency and reducing costs.

Anvil: Reshaping credit and payment infrastructure: Anvil, founded by Tyler Spalding, co-founder of Flexa, is a decentralized credit protocol based on Ethereum. It allows users to lock up crypto assets (such as ETH, USDC, etc.) as collateral to generate letters of credit (LOC), which can be used for payments.

3. Anvil's Technical Architecture and Application Scenarios

Anvil's core innovation lies in its decentralized credit issuance and management mechanism.

• Collateral and letters of credit: Users lock crypto assets in the Anvil protocol as collateral and receive corresponding letters of credit based on the value of the collateral. These letters of credit can be used in various payment scenarios.
• Decentralized credit management: The Anvil protocol automatically manages the issuance, settlement, and repayment of collateral and letters of credit through smart contracts, eliminating the need for human intervention and reducing the risk of human error and fraud.
• Zero-fee transactions at the protocol level: The Anvil protocol itself does not charge any transaction fees, significantly reducing payment costs.
• Open governance and technical architecture: Anvil adopts open-source code and is governed by the community. 60% of governance tokens are allocated to partners and users, granting them the right to participate in protocol governance.

Anvil's application scenarios are very broad:

• Traditional loans and DeFi lending: Anvil can serve as the underlying credit infrastructure to support various types of loan and lending activities.
• DeFi counterparty credit: Providing credit support for decentralized exchanges (DEX) and liquidity providers to enhance market efficiency.
• Cross-chain asset transfer: Providing credit guarantees when transferring value between different blockchains, reducing the risks of cross-chain transactions.
• Payment systems: Reducing credit risks and costs in payment processes through decentralized collateral, achieving more efficient and lower-cost payments.

4. Opportunities and Challenges Facing Anvil

The emergence of Anvil provides a new possibility for solving the "original sin" of internet payments, but it also faces numerous challenges.

Opportunities:

• Reducing social costs: By eliminating intermediaries and lowering transaction fees, Anvil is expected to significantly reduce the social costs of payments and improve economic efficiency.
• Promoting financial inclusion: Decentralized payment systems can lower the barriers to financial services, enabling more people to participate in the digital economy.
• Driving financial innovation: Anvil's open technical architecture provides developers with ample space for innovation, potentially leading to the emergence of more applications and services based on decentralized credit and payments.

Challenges:

• User education and adoption: Users need to understand and accept cryptocurrency-based payment methods, which requires time and educational costs.
• Regulatory compliance: The regulatory policies regarding cryptocurrencies and DeFi are still unclear in various countries, and Anvil needs to adapt to different regulatory environments.
• Technical security and scalability: Ensuring the security and scalability of the protocol is key to Anvil's long-term development.
• Market competition: There are already many payment protocols and cryptocurrency payment solutions in the market, and Anvil needs to find its competitive advantage.

5. Anvil's Long-term Vision and Broader Industry Impact

The launch of Anvil is not just a technical event; it represents a new financial philosophy and development direction.

Building a trustworthy global currency system: Anvil's vision is to create a transparent, trustworthy, and scalable global currency system that breaks the monopoly of traditional financial institutions through decentralized technology, achieving fairer and more efficient value transfer.

Promoting the maturity and development of the DeFi ecosystem: As an important part of the DeFi field, Anvil's development will help promote the maturity and development of the entire DeFi ecosystem, providing infrastructure for more innovative applications and services.

Facilitating the integration of traditional finance and DeFi: The emergence of Anvil may also promote cooperation and integration between traditional financial institutions and the DeFi field, jointly exploring new financial models and solutions.

6. Conclusion: Bridging the "Original Sin" and Opening a New Chapter in the Digital Economy

The emergence of Anvil provides a powerful attempt to solve the "original sin" of internet payments. By reshaping credit and payment infrastructure through decentralized technology, Anvil is expected to lower payment costs, improve efficiency, promote financial inclusion, and drive financial innovation. However, Anvil's success will not come overnight; it needs to overcome numerous challenges and adapt to the ever-changing market and regulatory environment. Nevertheless, the emergence of Anvil undoubtedly opens a new door for the global payment system and writes a new chapter for the future of the digital economy. It represents a trend of utilizing emerging technologies like blockchain to build a more open, transparent, and efficient financial system that ultimately benefits users worldwide.

Disclaimer: The above content is for reference only and does not constitute investment advice.

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