Commerce Onchain Protocol

The Commerce Onchain Payment Protocol is an open-source project designed to facilitate the integration of on-chain cryptocurrency payments into e-commerce platforms. This protocol provides a standardized way to handle payments directly on blockchain networks, leveraging smart contracts and blockchain addresses for secure and transparent transactions.

Overview of Commerce Onchain Payment Protocol

The protocol aims to provide a consistent interface and process for accepting cryptocurrency payments. Here’s a breakdown of how it works and its key components:

Key Components

1. Payment Address Generation: Unique blockchain addresses are generated for each payment.

2. Transaction Monitoring: Transactions to these addresses are monitored for confirmation.

3. Smart Contracts: Used to handle the payment logic and ensure funds are correctly transferred.

4. Webhooks: Notifications are sent to the merchant’s server when payments are received and confirmed.

How It Works

1. Initiate Payment:

   • When a customer decides to pay with cryptocurrency, a unique payment address is generated for the transaction.

   • This address is provided to the customer to send the payment.

2. Monitor Transactions:

   • The protocol monitors the blockchain for transactions to the generated address.

   • Once a transaction is detected, it is tracked until it receives the required number of confirmations.

3. Confirm Payment:

   • After the transaction is confirmed, the funds are considered successfully received.

   • The merchant is notified of the payment via a webhook or API call.

4. Smart Contract Integration:

   • Smart contracts can be used to automate the payment process, ensuring that the funds are securely handled.

   • These contracts can handle additional logic such as refunds, escrow, and multi-signature approvals.

Implementing the Protocol

Step 1: Generate a Payment Address

The first step is to generate a unique address for each payment. This can be done using an HD wallet or a similar method to ensure that each transaction has a unique address.

Example Using Ethers.js (Ethereum):

const { ethers } = require('ethers');

// Create an HD wallet from a mnemonic
const mnemonic = 'your mnemonic phrase here';
const masterNode = ethers.utils.HDNode.fromMnemonic(mnemonic);

const generateEthereumAddress = (index) => {
    const childNode = masterNode.derivePath(`m/44'/60'/0'/0/${index}`);
    return {
        address: childNode.address,
        privateKey: childNode.privateKey
    };
};

const { address, privateKey } = generateEthereumAddress(0);
console.log(`Generated Ethereum Address: ${address}`);

Step 2: Monitor the Payment Address

Next, monitor the generated address for incoming transactions. This can be done using blockchain APIs or services like Alchemy, Infura, or directly interacting with the blockchain.

Example Using Alchemy Webhooks:

1. Set Up Webhook Endpoint:

   const express = require('express');
   const app = express();
   app.use(express.json());
   
   app.post('/webhook', (req, res) => {
       const event = req.body;
       console.log('New transaction event:', event);
       // Handle the event (e.g., update database, notify user)
       res.status(200).send('Event received');
   });
   
   app.listen(3000, () => {
       console.log('Server running on port 3000');
   });

2. Register Address for Monitoring:

   const axios = require('axios');
   
   const registerAddressForMonitoring = async (address, webhookUrl) => {
       const response = await axios.post(
           'https://eth-mainnet.alchemyapi.io/v2/YOUR_ALCHEMY_API_KEY',
           {
               addresses: [address],
               webhookUrl: webhookUrl,
               event: 'NEW_TRANSACTION'
           }
       );
       console.log('Address registered:', response.data);
   };
   
   // Register address for monitoring
   registerAddressForMonitoring('0xYourEthereumAddress', 'https://your-server.com/webhook');

Step 3: Confirm the Payment

After detecting the transaction, wait for the required number of confirmations before considering the payment complete.

Example Using Ethers.js:

const waitForConfirmations = async (txHash, confirmations = 12) => {
    const receipt = await provider.waitForTransaction(txHash, confirmations);
    return receipt;
};

const receipt = await waitForConfirmations(transactionHash);
if (receipt.status) {
    console.log('Transaction confirmed:', receipt);
    // Notify merchant and fulfill order
}

Step 4: Notify the Merchant

Once the payment is confirmed, notify the merchant through a webhook or API call.

Example Notification:

const notifyMerchant = (transactionDetails) => {
    // Implement notification logic (e.g., send an HTTP request to the merchant's server)
    console.log('Notify merchant:', transactionDetails);
};

notifyMerchant(receipt);

Conclusion

The Commerce Onchain Payment Protocol provides a robust framework for integrating cryptocurrency payments into e-commerce platforms. By generating unique addresses, monitoring transactions, and using smart contracts, merchants can securely accept and manage cryptocurrency payments. This approach ensures transparency, security, and efficiency in handling on-chain transactions. If you need further details or have specific questions about implementing this protocol, feel free to ask!