An API (or Application Programming Interface) is a powerful technological tool that can speed up data processes and propel your business forward. One way in which they are used is through the online ACH money transfers. By implementing an API for your ACH payments, you are providing more payment options for your clients and/or customers, and speeding up the transaction process.
ACH APIs for cryptocurrencies are the next generation of financial transactions. They minimize and virtually eliminate the risks commonly associated with standard ACH transfers since highly secure crypto coins are used as verified payment.
If you are unfamiliar with how ACH APIs work for cryptocurrencies, then this article is for you. Just know that as the cryptocurrency space continues to develop, ACH API can securely provide an expanded digital portfolio.
How Cryptocurrency Works
It is likely that you have heard about bitcoin transactions or encountered terms like “blockchain” and “cryptocurrency” before, however, if you want to work with it, then it’s important to truly understand what cryptocurrency means.
Cryptocurrency is a type of digital-only money that can be transferred without a bank. Cryptocurrencies are made up of blockchain technology. Blockchain is essentially a facet of computer code, but you can think of it as a digital ledger. Every time a transaction is made on the blockchain, then a unique ID (or block) is created. The block is verified by computers all over the net and then added to the blockchain.
The blockchain stores each of these unique IDs, which are types of cryptocurrency transactions. Storing transaction records in this way means that every transaction has its own unique identification and unique history. Because of this, it makes it virtually impossible to falsify a transaction because you would need to falsify the entire blockchain.
Blockchain decentralizes payment processing, so no person or banking entity is touching the transactions process other than accepting or sending transactions. Furthermore, the blockchain is communally stored, so no one company is holding onto the transaction record. Instead, that information is virtually stored on the network. Blockchain transactions are verifiable by anyone on the network.
Not all cryptocurrencies are the same. In fact, multiple types of cryptocurrency exchanges happen within the cryptocurrency market. The most original and most common cryptocurrency is Bitcoin, but others include Ethereum and Litecoin. You can build your digital currency or cryptocurrency wallet to sell a cryptocurrency, to make an ACH bank transfer (cash to crypto coin and vice versa), or for crypto or Bitcoin mining.
Clearly, there are obvious benefits to this type of money transfer. Cryptocurrency, and the blockchain that is built for it, is unlike any other type of money. This innovation is completely secure, public, and is virtually free from a sole third-party oversight.
How to Use an API to Transfer Cryptocurrency
Getting started is simple. With a company like Sila, you can actually create your own API using our open-source SDK. This allows you to start with a verified and secure ACH API.
At Sila, all our endpoints enable identity verification with the U.S. Know Your Customer (KYC) regulations. We also secure bank account linking through our third-party program. All bank accounts are accessed only through our TPPP, so once the money is uploaded, our provider can support the digital currency to cryptocurrency exchange into ERC-20 stablecoin (or the Ethereum blockchain).
Financial APIs transactions are usually secured through client IDs and API secrets. To bypass this (and further secure it), Sila uses the Elliptic Curve Digital Signature Algorithm (ECDSA) as a completely secure way to validate transaction requests. Each user/app is given a private key that Sila does not have access to. Sila only stores addresses, which are derived from public keys. Since private keys cannot be derived from public keys nor addresses, then they are zero-knowledge proof and completely unknown to anyone but the user.
By using private keys and a secure TPPP to manage bank accounts, the API transaction is publically verified yet fully secure. Once this private key is generated, then each transaction by that user will be signed off using that private key. A signature is produced (and the private is never regenerated) and a message is sent requesting for the transfer. Once the signature and message are received, Sila will receive a public key and address. The address can then be verified.
Most blockchain based applications work similarly to the process described above. And analysts are starting to recognize the growth potential that this form of payment transaction can provide. A blockchain based API takes away all of the extraneous security requirements, transaction fees, and regulations from financial institutions but still allows for the security. From companies in the supply chain to healthcare, the Internet of Things (IoT), data management, and privacy, the potential is ever-growing.
Benefits of an ACH API for Cryptocurrency Transfers
The biggest benefits of ACH API include security, ease, and speed.
Since an ACH bank transfer using cryptocurrency does not need to go through the ACH network, these transactions are faster and easier than those API transfers based on the network.
Implementing an ACH API for cryptocurrencies will not only allow your company more versatile billing options, but it also reduces the economic impact of startup and operating costs. Since you are no longer reliant on transaction fees from financial institutions, then you can get up and running quicker with fewer out of pocket expenses for day-to-day tasks. This can allow your company to go to market sooner than competitors and reduce the amount of economic lag that initial investments typically experience.
Additionally, with an ACH API for cryptocurrency, you can enable cryptocurrency trading. Cryptocurrency trading allows anyone to transfer money internationally without any hefty international transaction fees. Since customers who interact with the API will need to upload standard money (whatever currency they use), then they don’t need to be clued into the details behind the money transfer.
Global companies are recognizing the power of decentralized finance that blockchain offers. By adopting blockchain technology into API form, companies can secure their business through connected machines with limited human interaction. According to a webinar with Benjamin Diggles, VP of Business Development at Constellation Labs, blockchain is also driving mobility. When companies like Uber are bringing in loads of personal data, it can be difficult to keep that sensitive data secure. Allotting payment into the blockchain form can eliminate that risk and protect that data.
In addition to this, cryptocurrencies like Bitcoin and Ethereum are completely secure. So all the sensitive transaction data is stored off your company servers on a virtual and secure public blockchain. Allowing Sila to facilitate the ACH transfer of your cryptocurrency means that you have a fully functioning and beta-tested API ready to go.
Through Sila, your customer’s identities can be verified and all transactions will be completely secure. Allow Sila to support your ACH transactions and sell cryptocurrencies for you.
How to Implement an ACH API for Cryptocurrency Transfers
Implementing an ACH API for crypto is simple with SilaMoney’s digital wallet. Our team of engineers and financial professionals have merged the security requirements of an API with the ultimate security that Ethereum provides. Through our developer console, you can also sandbox your own Sila APIs to fully develop and beta test an ACH API for your unique needs.
There are some things to consider when implementing digital signatures. For example, private keys should be at 64 characters long hex-encoded strings, and they should not start with 0x. Addresses should be 42 characters long hex-encoded strings, and these should start with 0x. And, signatures should be 130 characters long hex-encoded strings, and they should not start with 0x.
It’ll be helpful to have on hand a cryptographic library for whatever crypto language(s) your company decides to use. Since each library is different, make sure that you have the exact library of the language(s) you are using.
You may also need to marshal your request body to JSON (bytes or string) before the signature is created. There may also be structural changes if the resulting JSON string is marshaled a second time. For example, a struct, JSONObject, or hashmap may show up or the string may be ordered differently. If the marshaled JSON shows differences, then the signature will not be validated. You can access more of our troubleshooting docs through our Sila console.
An ACH API using cryptocurrency is highly secure and can eradicate having to pay fees to financial transactions as these can hold up smaller companies and greatly impact a company’s bottom line. Whether you are interested in buying Bitcoin or trading cryptocurrency, an ACH API can secure all your banking transactions and direct deposit this digital currency into your bank account. Additionally, by using an API like what Sila provides, you can bypass traditional transaction fees and processes to do business with more foreign clients with more affordability.