Development and Evaluation of Cryptocurrency and PSD2 Payment-Methods in an Ethereum-Based Loyalty Point System

The blockchain technologic assets can potentially revolutionise the fintech and non-fintech world in term of operations speed, cost reduction, fee avoidance, transparency, immutability, intermediaries remotion and security.Nowadays, hundreds of different blockchains are on the market; however, the most relevant one is by far Ethereum.In the last few years, Ethereum has evolved under many aspects: becoming increasingly efficient, scalable and sustainable.Ethereum was the first network to introduce smart contracts, programs where currencies and assets can be transferred into and which use their code for automatically validating conditions, determining if an asset should go to one person or get back to the sender.Despite the destructive aspect of the current economical architecture, the world juridical framework has been in favour of new payment methods and financial entities. Laws and directives on digital payments has been adopted during these years, and, as a matter of facts, PSD2 is the most groundbreaking for Europe. With its compliance, banks have the obligation to introduce API for new actors, basically, third party providers of financial services; with the purpose of guaranteeing them a full access to customer's bank accounts for performing operations.Both opportunities arising from PSD2 and Ethereum state-of-the-art technologies can be combined to develop distributed blockchain-based application, finalised to transact electronically in a fast risk-less way. The distributed application implemented in the thesis work is an example of decentralized application built on top of Ethereum for performing transactions and transfer currency and assets. This project contains three different modern payment methods: an Ethereum payment, in Ether, the native cryptocurrency of the blockchain; a PSD2 payment, a pan-european instant payment in euro; and a tokens transfer, in points, programmed in a smart contract, following the ERC20-token Ethereum standard.The three kind of payments introduced are perfectly complementary with each other in the system, proving both intra and extra blockchain payments, crypto and non-crypto currency, and using money and tokens. The solution developed involves multiple transactions with different payment methods; furthermore, it is possible to interact with through a user-friendly front end.This thesis work concerns about understanding deeply the blockchain, specifically Ethereum; if this could be a next breakthrough technology and if non-strictly-financial applications can be built on its top. The present thesis work goals are to evaluate the development potential of smart contracts, analysing the system risk and vulnerabilities; to test the advantages on developing distributed applications and to compare costs, fees and speed of these modern methods with the current ones.