Cryptocurrency with Fully Asynchronous Communication based on Banks and Democracy

Abstract

Cryptocurrencies came to the world in the recent decade and attempted to offer a new order where the financial system is not governed by a centralized entity, and where you have complete control over your account without the need to trust strangers (governments and banks above all). However, cryptocurrency systems face many challenges that prevent them from being used as an everyday coin. In this paper we attempt to take one step forward by introducing a cryptocurrency system that has many important properties. Perhaps the most revolutionary property is its deterministic operation over a fully asynchronous communication network, which has sometimes been mistakenly considered to be impossible. By avoiding any temporal assumptions, we get a system that is robust against arbitrary delays in the network, and whose latency is only a function of the actual communication delay. The presented system is based on familiar concepts -banking and democracy. Our banks, just like normal banks, keep their clients' money and perform their clients' requests. However, because of the cryptographic scheme, your bank cannot do anything in your account without your permission and its entire operation is transparent so you don't have to trust it blindly. The democracy means that every operation performed by the banks (e.g., committing a client transaction) has to be accepted by a majority of the coin holders, in a way that resembles representative democracy where the banks are the representatives and where each client implicitly delegates his voting power (the sum of money in his account) to his bank. A client can switch banks at any moment, by simply applying a corresponding request to the new bank of his choice. The presented approach employs the advantages of centralization while still providing a completely trustless and decentralized system. By employing concepts from everyday life and attaining high throughput and low latency for committing transactions, the hope is that this paper will lay the foundations for a cryptocurrency that can be truly used as a practical coin on a daily basis.