People Powered Money on the Trustlines Network

Transcript

oh Lola puncher hello I'm here to talk about people-powered money on the trust lines Network my name is Alisa how it I'm American I've been working on trust line since 2019 my role is research and business development I am based in Germany and the New York area and just a disclaimer I'm gonna be throwing around some financial terminology but please do not

interpret these in the legal sense of the words I'm just using them colloquially and I hope that nobody here is going to sue me for doing so and just a brief outline we're gonna start with some of the principles of Financial Inclusion them inspired this project I'm going to talk about the definition of a trust line and walk you through that and then we're going to discuss the Tres alliance protocol it's a technology stack and we're going to introduce you the trust lines app which you can download today and test out and then I'll conclude with an inspiring profound summary and some commentary on the state of the world and Financial Inclusion

right so Financial Inclusion um what if there is a better type of money I think that is something that everyone in this room kind of shares as a goal we're interested in creating a better type of money so that we can have a more inclusive economy and we've isolated kind of some some principles of financial inclusion starting with accessibility money should be accessible to anybody you shouldn't have to use an ID to access a medium of exchange you're the infrastructure on what your monetary system is built should be censorship resistant and we should be using money that supports human centered monetary

design so we should build off the success of local and community currencies and when we're when we're designing a new monetary system which brings us to our answer to these questions these obstacles to financial inclusion which is trust lines people-powered money essentially we've built a system of mutual credit based off of individual trust relationships and I will walk you through that so you understand it what is a trust line has anyone here heard that term before just lying some of the people I work with and others this is a trust line a trust line is two credit lines issued bilaterally

between two people who trust each other so Alice and Bob they're friends they know each other in real life alice is willing to you know really actually lend Bob ten dollars at any point in time because they're friends she knows him as she trusts them and Bob is willing to do the same to Alice so what the two of them can do is they can just formalize that agreement they can write it down and and that is a trust line Alice issues Bob a ten dollar credit line and involve issues alice a ten dollar credit line and how do you pay someone using a trust line like that a mutual credit line um Alice can suppose Alice and Bob go out for drinks and Bob pays for

Alice's beer Alice should then repay Bob by well what she would say normally is she would say I owe you five dollars assuming it was a five dollar beer and so instead of just saying that what she can do is she can send him a five-dollar IOU over their trust line and what that does is that increases Bob's credit available credit with Alice so that goes from ten to fifteen and with Alice's credit line with Bob it decreases the available credit 10 minus 5 is 5 so what is the advantage to Alice and Bob writing that down writing down that transaction suppose Alice wants to transact with Charlie now Charlie

Charlie doesn't know Alice he doesn't trust her he doesn't have a credit line with her trust line with her he's going to UM but Alice wants to transact with him so what she does she looks at the network and she tries to see if they have any mutual friends mutual friends with trust lines between them because what you can do is a path of connected trust lines can actually be used to connect strangers so that they can make a transaction so here here we see that Alice and Charlie actually share a mutual friend and that is Bob in each of them happen to have a ten dollar trust line with Bob so this this path has sufficient capacity for Alice to send a

five-dollar IOU through Bob to Charlie and we call this multi hot payment you could also say it's else is rippling a transaction through Bob um what really happens is Alice sends Bob a five-dollar IOU and Bob sends Charlie a five-dollar IOU so at the end of this transaction Charlie is plus five Alice is minus five and Bob is not zero because before he had you know ten dollars in cut it with Alice and ten dollars in credit with Charlie but now he's got 15 in credit with Alice and five and credit with Charlie it still totals to twenty dollars in credit available credit so

multi-hop payments they function like payment in kind um Charlie agrees to a sale he's still plus five but he's plus five denominated in credit that he finds valuable namely with Bob who he trusts and you might wonder well okay that's all fine and well but what about when Bob and Charlie want to settle their balance um so what we find is that in a system with enough participants settlement is mostly unnecessary and that's because Bob might want to transact with Dave and David's just someone else in the network who's connected to him through Charlie so he can actually use that but his balance was with Charlie and ripple that through

Charlie today so they're settling Bob and Charlie are settling that five at five dollars um but he's able to push that that credit through Charlie to David maybe make a transaction with Dave and transfers like this can go back and forth multiple times so that ultimately settlement is mostly unnecessary moreover the transfers we were incentivizing transfers that settle balances that reduce balances rather than transfers that grow balances that make sense so what about simple attacks what about Eve Eve decides that she's

going to try and attack the network with fake credit so she creates ten million dollar trust lines with herself and she says ha ha ha I'm going to use this to buy a Lambo and ultimately Eve's spending limit is constricted by the people that she actually knows who trusts her so here she is friends with Alice Allison if they know each other in real life and Alice is willing to trust Eve with ten dollars but not with ten million dollars and she's not stupid enough to trust Eve you know Eve's multiple personality is she's only gonna trust make a trust line with one Eve you know that's it and if you know he was gonna have trouble opening a trust line with anyone

else in the in the network who doesn't actually personally know her as well so as you can see you spending ability is really constrained by the real people who trust her and who let her into that network so she can she can only she could only spend within the rest of the community to the extent that her real friends will let her and you might wonder well is is this money to me this looks like money this feels like money it's alternative it's an alternative medium of exchange that anyone can issue and moreover it's created as needed by

its users it obtains its value from real world trust relationships and most importantly it's accessible to anybody anybody with a friend to put this in perspective there are different types of money in the world most of us are familiar with government-issued money which is you know the dollars or euros that you keep in your wallet and there's also bank issued money you know money issued by private commercial banks so the credit that you might have with in your bank account there's also commodity money which you could you could say gold or you could say that bitcoin is a type of commodity

money that has an intrinsic value but there's in particular but it's different from the other three there's people-powered money there's money that's issued by people and what do we mean by that there's there's if you go out for drinks with someone with your friend and you know your buddy pays for your beer you can say well I owe you a beer that's money that's that's that's real money and the cool thing about that money is you don't have to consult anybody any central authority in order to to create that you know that meaning of exchange you're not benefiting anybody else when when you're creating that kind of money so that's kind of what we're what we're working towards

here which brings us to the it trust line it's protocol so what is that joslyn's protocol consists of four components we've got the trust lines blockchain which is a minimum viable proof of stake sidechain to aetherium um we have the smart contract which contains all the business logic and the smart contracts um we have the relay servers with which calculate the optimal paths for sending transactions through the network and the client library which is a high level API for interacting with a smart contract through the relay servers the trust nights protocol is a free

open-source technology stack designed to solve obstacles to financial inclusion it is actually agnostic to the idea of people-powered money it is something that can be used by anyone for any use case in whatever way you can imagine so crucially the trust mines blockchain which is a minimum viable proof society into a theorem it uses anonymous validators and these validators earn rewards for each block they create and each transaction they include denominated in the trust lines network took a coin and they have to stake it on

the main chain and in order to become a validator in the first place their responsibilities are to run a node with high uptime don't attack the network please monitor the chain for misbehavior and participate in governance validator is born when you when you participate in the auction the next one by the way is in July we can talk afterwards if you're interested in becoming a validator and you'd most most validators that exit automatically after a fixed period when you get your stake back and you take whatever rewards you've made at that point as well so how can a new user join the trust minds

network without buying trust lines coins we have actually created something called the delegates to solve this problem the delegates pay transaction diffuse on behalf of the end user in exchange for fees set in the smart contract system it denominated in the code in the currency network in which they're taking part so for example we see Alice here else it's a totally normal person but she wants to join the chess lines network and she has no TLC she doesn't have - he doesn't even know what crib toys um she finds a delegate to pay her fee and the to pay her transaction fees and

the delicate can either decide to do this for free because they believe in the community currency that she was taking part in or the delicate can set a current of a currency Network fee so a fee equivalent to the the the trust lines coin fee transaction fee but denominated in the currency network in which Alice takes apart so in order for that transaction to happen the Alice and the delegate would both sign a transaction and the currency network would register that Alice owes the delegate a currency Network feat and why would the delegate do this the delegate would would you know you can

imagine someone who's you know participating in a currency network where you know maybe perhaps denominated in beers like we have we've created here for your enjoyment and and maybe a delegate finds this kind of currency valuable and wants to be able to go into any crop into any community and use the credit that they've earned in this community currency network wherever they go they want to be able to purchase something using this currency using Alice's credit denominated in this currency wherever they go and they value that equivalently to the to the fees that they're there they're paying in

translates points okay so trust lines app I'm happy to say that we've got for you the trust lines mobile app just released and you can get it just lines up and the cool thing about this is that you can basically get on boarded to the system in seconds you just do download the app you create a trust line with a friend anyone and anyone who trusts you and then you can interact with anyone any in your community you can make transactions through the whole network and so in the app you can already see

the customizability of this it's a currency system and you can de nominate you can choose to use a currency of any denomination so that includes euros but also maybe work hours or time Bitcoin or as I said earlier beers that's a fun a fun currency Network you can change other things about the currency Network if you're interested in creating your own community currency so for example you can set the system you can set the network to be open or closed or permissioned and you can set an interest rate in your currency network that would could be positive or or a negative interest and you can restrict the number

of trust lines that each user is allowed to create right and so this brings us back to the principles of Financial Inclusion so I hope that I've shown you know the concept of a trust line as a financial tool is super accessible you don't need an ID to use it all you need is a friend and and we've built it on using the trust lines protocol which is censorship censorship resisteth resistant infrastructure and we've made it extremely customizable to allow you to experiment with different types of

currency designs and monetary design for a more human centric economy to bring this back to reality there are about 2 billion people excluded from the current financial system we don't have any bank accounts or access to traditional bank financial services and but an overwhelming number of people do you have mobile phones so we think that you know building something like this that's accessible from a mobile device it could be really powerful and we hope that you will try it out and let us know what you think

thank you very much my name is Lisa and it's great to be here all right thank you very much these up for the insights and rush lines um are there any questions in the audience maybe yep lovely out fantastic oh yes yeah at the idea of these trust lines or they kind of look like payment channels right and then like a network of payment channels starts to sound a lot like you know lightning or radiance on the line I guess lightning or radiant would be like

what's the main difference between trust line network and payment channel network well we're we're hoping that this is something like we're going for the idea of people-powered money so in in a system like this anyone who wants to can join the system and use it to create money wherever they need so that the I think the driving purpose is completely different we're you know we're creating an alternative medium of exchange and we're not attempting to solve

scalability issues and it's that just that somewhat answer your question but it's a very similar principle how it works is the idea still like in a payment channel you would have eventually a settlement right so you would kind of return back to you know some I mean of course that's a layer two thing right but okay so the idea with the trust lines is that you would sort of have this thing sort of growing and then producing more can you say that again so the idea like how does a is the mmm

the idea is that this would like become a medium exchange meaning or exchange but at the same that I you could build your own communities like local money yeah I I guess I guess I'm I'm like asking like what's the sort of end game for trust lines is it going to be like it is what you what you want it to be you know what you make of it I mean we're interested in the idea of people-powered money and turning turning this into a medium of exchange all right that's what I want to see but you're right to say that it has it shares a lot of the principles of yeah payment channel technology

no I just right yeah we're dealing with social collateral I have a question help me understand is it possible to integrate this with communities so obviously it is possible to kind of create an abstract concept of a community inside of the trust lines network and app but say I want to connect this to kind of a pool let's call the Val pool or community funding pool and I only want these transactions I want to actually ensure that it can only happen inside the circle and actually connect us to a front-end that is actually part of this community is this possible already or is that on your

roadmap can you say that again how can i integrate trust lines with any front-end app that I have or can I not do that I can only use your app and yeah you can you can build whatever everything is open source you can build whatever you want just let us know and maybe we can work together yeah grants thank you yeah I just had a quick question um so what is there a stake in when you establish or it's literally just I owe you money you owe me money yeah it's literally I owe you money and you owe me money if you're a validator than you're sneaking youth right so I great that's why I was thinking so

that's really the difference between state channels and this is that yeah okay Hey I have two questions the first one is how does it compare to circle ubi and the second one is so I imagine that out of this they could be an identity system that emerges out of this because we have some kind of a reputation system with the dimension of financial services and how do you imagine how could this work out as a identity solution as well and okay so

circles ubi is very similar project that is it conceptually it would be as if you had a maximum limit on the number on the amount of credit that you could have out at any one point in time with any person and that's that's sort of what it is because circles is a basic income a basic income project um you could you could recreate that concept using the trust lines protocol actually they I think it's still in development but they're you they're using X die which is proof of proof of authority so not a censorship resistant as we are and what

was the next question you forgot was about how can we use trust lines as decentralized identity series yeah okay um yeah like you you could use the you could look at the at the graph and approximate identity based on that you can use it for also calculating people's credit scores and a totally decentralized way yeah the the your you're right it could be used like that you might want to change certain features about do the the currency networks if that's your goal because you know you wouldn't be exactly

incentivizing unique identity the the incentives are slightly different it's about well how creditworthy do you think your friends are and etc um so you'd have to take that into account but the principles are pretty similar yeah all right thank you very much I guess that was last question just get off for at least the ones once again and for trans lines and thank you very much for coming [Applause]