✏️ Learn more about RehiveDecentralized cloud storage is the result of countless changes and updates made to the internet ecosystem at large. It is, therefore, necessary to look at how the internet transitioned from its various phases to the current phase to put things into perspective.

When the internet was in its nascent state (or during Web 1.0), the majority of the users were consumers. Most of the data that was hosted on the internet was through on-premise servers. In more simpler terms, the internet acted as a content directory network for most of Web 1.0. With the advent of social media and rise in content creation, we transitioned to the next phase of the internet– Web 2.0 (2000–2010s).

When Web 2.0 came into being, there was a sharp increase in the number of online applications and platforms that allowed users to share their content, views, perspectives, and whatnot. As a result, on-premise servers ended up becoming a thing of the past. What the world next needed was cloud computing. Surely enough, cloud infrastructure was massively built over the period and most enterprises started relying on the cloud to store and host their data. Around this time, the content creators and users slowly started to lose the control over their data, information, and content. Centralized cloud authorities such as AWS or GCP became monopolies. More on this later. While the Web 2.0 phase was mostly about user experience and the innovations happening in the front end of the web, the next phase, Web 3.0, became all about the back-end.

Although the era of Web 3.0 is already here, the transition to Web 3.0 products and services is underway. This puts us at a key juncture in the history of the internet where control of the information and data hosted online is now put in the control of the creators and users. Now, users are slowly realizing the perils of centralization, censorship, and privacy-invasive practices that have plagued Web 2.0. In our next section, we dive deeper into the failures of traditional cloud storage and how they acted as a leeway for the inception of decentralized cloud storage.

Like we explained above, when Web 2.0 started becoming all about social media and content creation, the need for cloud computing and storage became indispensable. Some major players in the internet ecosystem, such as the Big Tech companies, started to monopolize the entire market of cloud storage. While solutions such as AWS, GCP, or Azure have all helped the internet evolve by offering reliable services, their mistakes are hard to ignore. Here are some of the prominent issues with the traditional cloud storage ecosystem:

What we have above is merely a snapshot of various issues with centralized storage. We have done a full-blown blog post talking just about the various issues with centralized storage. Check it out here: https://bit.ly/3kNFt1S

All through the evolution of Web 2.0, decentralized networks were in the silos, with the earliest examples including solutions such as Napster and BitTorrent. While Napster is long gone, BitTorrent is still a force to be reckoned with. Centralized storage networks that were a large part of Web 1.0 and Web 2.0 facilitate the transfer of data through central servers. Decentralized networks, on the other hand, facilitate the data transfer through a number of peers distributed across a wide geographical area.

This model of data transfer changed a lot of things– users were in control of data, there was better transparency, and accessing as well as sharing one’s data did not have to be controlled by a central authority.

With growing time, privacy-focused minds that prioritized user independence and integrity over profiteering, built solutions such as IPFS. We have written a full-length blog post about IPFS. Read it here: https://bit.ly/3zi5Tio

With solutions such as IPFS, transfer and storage of data was made decentralized. But that wasn’t enough. For a decentralized network to stay up and running, incentives were to be put in place. Running a storage service as an open-source project for a benevolent cause, while being commendable, does not address the market needs of data storage. The cloud storage market is currently growing at a CAGR of 22.3 percent and is all set to reach 137.3 billion USD by 2025. There are two perspectives to consider here. One, there will be a sustained growth in adoption of cloud computing. Two, novel solutions will have space to compete with the current big players in the market.

If one were to look for decentralized storage solutions in the market now, IPFS, Filecoin, Storj, Sia, and Arweave would be some of the popular options. Read on as we provide a quick summary of each of the popular decentralized solutions of today:

What we’ve covered above are some of the decentralized storage networks and providers. For a full overview of the major players in this area, check this link out.

Arcana Network is a decentralized storage network that incentivizes users through the $XAR token, and is optimized for storage of DApps and private data. While services such as Filecoin, Arweave, and IPFS are not a practical solution and strong competition to the traditional cloud storage market, Aracana is.

Arcana offers Social Auth, Access Management, and KMS in an easy to use SDK that takes minutes to integrate for any developer. Check out the testnet on www.testnet.arcana.network.

Arcana Network is a decentralized storage layer for Ethereum, offering storage for DApps built on EVM compatible chains, such as Ethereum, Binance chain, and Polygon (Matic). But Arcana doesn’t stop at storage. To fully realise the privacy and data ownership benefits of decentralized storage, you need a suite of services, which are currently not decentralised. Arcana fixes this with its Privacy Stack. Arcana’s Privacy stack offers Decentralized Storage that is end-to-end encrypted, along with Non-custodial Key Management Services (KMS) and Decentralized Identity and Access Management.

Official Links: Website | Telegram | TG Announcement | Twitter | Medium

It would appear building a fintech app is a matter of stacking various providers and adding your branding. Unfortunately, the industry is still highly fragmented and it is difficult to navigate providers and compare apples with apples.

Our clients constantly ask us what is the difference between Plaid, Truelayer, TreasuryPrime, Synapse, Wyre, Marqeta, Onfido, Sumsub, Visa, Swift, etc. Knowing what the fintech stack consists of, and where different providers fit in can help you to better plan your architecture.

At Rehive, we have met and worked with hundreds of fintech startups. We focus on the application layer on top of the fintech stack, which gives us a birds-eye view of the fintech landscape and the providers companies choose for different use cases and regions.

In this post, we look at the CeFi stack in the context of the U.S. market. By CeFi, we mean centralized and traditional banking/financial services. We are drawing significant inspiration from Chris McCann’s popular article: “FinTech Infrastructure 101”. Our goal is to adapt the article to develop the terminology that would help clients navigate their options. We also highlight why there is a need for Rehive’s no-code application layer to bring everything together.

Financial technology has undergone much change in recent times. These changes are the consequences of powerful market trends. Understanding these market trends will help you navigate the fintech stack — read more here.

Market trends are driving the need for new fintech infrastructure and, in particular, developer tools. New players relentlessly pursue solutions — some are literally scraping banking services and packaging them as APIs to get the job done!

We break the modern financial stack into 5 layers to help clients navigate their options. Here’s a market map of the fintech financial infrastructure with U.S. based examples on each layer:

Let’s look at each layer in some more detail.

Includes the end-user app as well as the ledger and user management system that powers the app experience. In some cases, the app is built directly on any of the layers below without a ledger and user management system in between. The end-user application can be for web, mobile, or embedded.

Authentication, information extraction, and transaction authorization tools. Connectors typically do not have the ability to open accounts on behalf of users and do not operate as licensed financial service providers. Connectors either scrape banking applications or aggregate any available APIs to access individual customer accounts.

Typically positioned as banking-as-a-service, compliance-as-a-service, brokerage-as-a-service, etc. They partner with underlying banks, or sometimes become banks themselves, and provide a simplified set of APIs to mimic everything a bank can do. In some cases, banks provide their own abstraction layer. This should not be confused with open banking.

Traditional core banking systems are built according to strict specifications to meet international and national regulatory requirements as well as payment rail standards. The core is managed by licensed banks that ultimately control the movement of funds.

Underlying payment rails/messaging system used to settle funds between entities, for example, ACH, SWIFT, VISA, etc.

With an understanding of the whole fintech stack, Rehive’s role and place in the stack becomes much clearer. Rehive is uniquely positioned as the application layer on top of the fintech stack. We provide a flexible transaction ledger and user management system that slots on top of any underlying store of value, whether banks or cryptocurrencies.

Whether you are pure fintech or a non-fintech business, Rehive can help you save time and money to go to market faster with a fully fledge Cash App-like solution.

We aggregate various providers, while also making it easy for clients to build their own integrations. Businesses can easily configure their project, launch, and manage everything from a single portal without having to develop anything.

Rehive is a fintech app builder on top of the fintech stack.

The solution consists of an administrator portal, as well as consumer and business applications for iOS, Android, and web. It is also possible to build custom features or integrations via the SDK or API.

Rehive product overview: Platform, Extensions and Applications

It is a popular opinion that the hardest part of building a fintech business is regulations. This is true, but the good news is providers like Wyre, SynapseFi, and Treasury Prime in the U.S are solving this problem. Rehive’s partnership with Wyre is making it extremely easy to go live with a production-ready fintech app. The first step is to open a Wyre account and then import your API keys to start transacting as a user.

Rehive’s business model is similar to Shopify’s, but instead of being focused on e-commerce, we are going after the finance and banking sector. While Shopify made it possible for anyone to create an e-store, Rehive makes it easy to create a fintech app. There is a monthly subscription fee as well as a usage fee for active users. In order for Shopify to have succeeded as an e-commerce store builder, they needed infrastructures such as packaging, shipping and delivery, stock management, and payment processing to exist. In Rehive’s case, the infrastructure requirements are instead compliance/licensing, on/off ramps, brokerage services, and custody of user funds — all provided by Wyre.

If you are working on a fintech project and evaluating various vendors for each layer of the fintech stack, it is important to keep the following in mind:

Key observations

Key questions and trade-offs

When choosing your fintech stack you have to ask the following questions:

Generally speaking, fintech applications are thought of as being built on top of existing banking rails, aka CeFi.

DeFi is a collective term for applications that are built on open blockchain networks such as Bitcoin, Ethereum, Stellar, and others.

The friction related to building on banking rails has led to the emergence of fintech infrastructure abstracting complexity, which is great. However, there are a couple of downsides:

DeFi is an opposing force that competes with the banking rails (Core and Rails layers) as an alternative. A blockchain network is a distributed, interoperable and decentralized system that can directly be used as a payment rail, without a middleman.

Companies like Circle have used the programmable nature of blockchain to represent a “digital dollar” on various blockchain networks that are held in reserve by Circle. Their website tagline says it best: “Payments & treasury infrastructure for the internet”. Circle currently holds over $50 billion USDC stablecoins.

Digital dollars on blockchain networks are referred to as stablecoins, which inherits all the technical benefits of blockchain technology, while still being regulated as a fiat currency. Effectively, one digital dollar can be redeemed for one dollar in the traditional banking system at any time. Stablecoins are effectively a new payment rail making it easier to innovate for fintechs without the necessity of the core or abstractors layers. That being said, abstractors will continue to be valuable for fintechs to take care of the custody of funds.

Stellar is an example of an open and interoperable blockchain network that is well suited for stablecoins. The network has low transaction fees and near-instantaneous settlement time.

Japan is one of the first countries to announce a bank-deposit-backed digital currency that will be issued on a distributed ledger system.

It is to be determined whether stablecoins will continue to be centrally issued and/or whether projects like MakerDao will stand the test of time with their smart contract-backed stablecoin called DAI.

Rehive works on any store of value and works closely with Stellar to support more stablecoins and tokens on the Stellar network.

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