Trustlines Network: The original Ripple idea built on Ethereum
At EDCON 2017, we presented the Trustlines Network, an iteration of the original Ripple idea, built on Ethereum. In this blog post, we would like to give some background on the project. This will include our motivations, a refresher on the original Ripple concept, and some details about how we are going to implement it.
Making the “blockchain killer application” a reality
Payments without centralized services has arguably been seen as the blockchain’s killer application, from the earliest days of Bitcoin to the present day. This technology’s absolute potential to transform the financial infrastructure we rely on day-to-day, into a fair, transparent, and fundamentally peer-to-peer system is in fact what compelled us to work in this industry in the first place.
In reality, making every day payments with cryptocurrencies, comes with a fairly poor user experience for the average new user, who is not an early adopter or using services like LocalBitcoins. In general, users need to follow the steps of creating an account with an exchange, wiring traditional money from a bank account to the exchange, buying the actual cryptocurrencies, and then enduring their volatility, all before eventually using them to make payments.
That’s why today’s cryptocurrencies, when used for payments, feel more like prepaid vouchers than the kind of money we are used to. Never mind the paradoxical situation that users need to rely on centralized payment services to get access to their decentralized alternatives. All in all, these drawbacks render cryptocurrency nearly useless to those who’d benefit most from the technology.
We at Trustlines Network believe that the broader adoption of cryptocurrencies for payments depends on a value proposition that can outcompete existing centralized payment services, instead of relying on them.
IOU Networks: Decentralized Money issuance on the Blockchain
While searching for a fair way to issue money on blockchains without relying on mined cryptocurrencies, we didn’t have to look far to rediscover the original Ripple Idea. Here money may be denominated in real-world fiat currencies, while existing as IOUs between friends that have entered bilateral credit-line agreements. Payments between non-trusting strangers are implemented by rippling balance updates through a network of trustlines (i.e. a chain of friends-of-friends), until the payment reaches the receiver. In such a complementary currency setup, money is decentrally issued by users, based on credit given by trusted friends. To learn more about the exact mechanics of this powerful idea, watch the video below.
Implementing People Powered Money on Ethereum
The decentralized issuance in such a system is People Powered Money at its best. People Powered Money offers an effective solution to the prepaid, permissioned, and volatility-plagued reality of present cryptocurrencies.
The Trustlines Network will implement People Powered Money as:
- A protocol for IOU-based payments, implemented as a set of smart contracts on the Ethereum blockchain
- An open platform to host complementary currencies based on this protocol
- A mobile client reference implementation
Blockchain Adoption on Steroids
From a user perspective, the Trustlines Network will have the lowest barrier to entry compared to any payment app that has ever existed. Joining the system will be as easy as:
- Downloading the mobile app
- Joining the system by creating a trustline with a friend who is already part of the network
- Sending and receiving payments
Notably, there is no requirement to register, to have an ID, to link a bank account or credit card, nor to have ETH or to deposit any form of money. All one needs is a smart phone and a trusting friend.
We believe that this ease of a adoption is a unique selling proposition which will allow us to significantly increase Ethereum’s user base. We are working closely with our colleagues from the Raiden Network project to make sure that the system scales as its usage grows.
Let’s build this together!
Over the last few months, our team at brainbot technologies has drafted a whitepaper, built a working prototype, and setup a website with basic information and the obligatory FAQ. We are now kicking things into high gear by starting the development of the real thing. There’s a lot of work ahead, and we are thankful for any help we can get from the community. Whether you are an interested developer, a UX designer, a complementary currency advocate, or someone otherwise attracted to the idea of building a better monetary system on the blockchain, please get in touch!
We’ve setup this slack where we will exchange ideas and plan the way forward. We’d be happy to meet you there. Also, please stay tuned for an upcoming series of blog posts in which we’ll describe the technology and concepts in much greater detail.
Let’s work together to make the original dream of a viable peer-to-peer financial infrastructure come true.