Proofs

"Everything is based on crypto proof instead of trust."

Satoshi Nakamoto, 8 February 2009

The competitive issuance of mints, consisting of debit tokens representing outright bitcoin as well as credit tokens redeemable in bitcoin on the Bitcoin mainchain, must be verifiable to minimise the trust requirement in the system and ensure full auditabilty.

These proofs can be checked both by end user wallets as well as by mints which mutually recognise each other's tokens and thereby secure the system in a fully decentralised and self-responsible fashion.

E-bill proofs

Proof of value

Bitcredit issuance must tie to real value. In a market economy, prices are a factual compromise as buyer and seller will negotiate a mutually acceptable price. Therefore, the minting of new Bitcredit requires sellers to upload a signed encrypted invoice of the goods or services sold. 

Proof of delivery

Bitcredit must be issued only for goods already produced and services already rendered.  Therefore the minting of new Bitcredit requires the buyers to upload a cryptographically countersigned encrypted confirmation of delivery.

Proof of e-bill redemption

Bitcredit redemption must be verifiable by mandatory final e-bill payment at maturity in outright Bitcoin on mainchain.

Mint proofs

Proof of assets

The total value of e-bill holdings of a mint are verifiable through the itemisation of the holding balance recorded its identity's statechain. Its holdings of bitcoin backing is provable through onchain assets.

Proof of liabilities

The total value of asset-backed Bitcoin credit tokens in circulation is verifiable by mints publishing auditable lists of minted and redeemed tokens, latest upon token redemption at e-bill maturity, or at earlier intervals if needed.

Proof of guarantee

The current guarantee percentage of a mint can be verified by its holdings of eIOU tokens at their current market value in Bitcoin, representing its available guarantee assets, in relation to their total liabilities.