1

CHRONOBANK - PHASE 1: A NON-VOLATILE DIGITAL TOKEN BACKED BY LABOUR-HOURS THE CHRONOBANK TEAM CHRONOBANK.IO INFO@CHRONOBANK.IO Abstract. This whitepaper abstractly describes a system designed to tokenise labour-hours using blockchain technology. ChronoBank is a proposed implementation of the described system that can be deployed in several economic localities. The proposed system leverages smart contract techniques to automate a process whereby a country-specific ‘labour-hour’ token may be redeemed for real labour-hours via legally binding (traditional) contracts with labour-offering companies. The proposed ‘stable-coin’ implementation provides a non-volatile, inflation-resistant digital asset transfer system. 1. Introduction With the advent of cryptocurrencies, relatively instant low-cost transfers of value have become a reality. Blockchain technology, which is a defining feature of most cryptocurrencies, has recently been applied to solve a great variety of problems. Currently the most widespread implementation of blockchain technology is Bitcoin [1], which is a simple asset transfer system. The asset in Bitcoin’s case is a bitcoin (BTC). The value of this token has seen rapid variation since its inception in 2009, which has hindered its feasibility as a global currency. There have been a variety of attempts to realise the advantages of blockchain technology while simultaneously mitigating issues regarding the stability of value for cryptocurrency applications. To achieve this, many attempts employ the notion of a stable-coin, whereby each token of value in the system has a counterpart of equal worth stored in a non-digital and tangible form in the ‘real world’. Two example implementations of the aforementioned stable-coin paradigm are listed below: USDT by Tether[2]: Each USDT token is backed by an equivalent amount of United States Dollars (USD) held in a reserve account by the private company Tether Limited. Digix[3]: Each token is backed by an equivalent amount of gold, which is stored in reserves by a dedicated precious metal storage custodian. In both examples, it is always possible for a token holder to redeem that token for its counterpart, thus ensuring its fundamental ‘stable’ value. Another notable example of a stable-coin is Bitshares [4], which attempts to decentralise the entire system through the use of digital Contract For Differences (CFD) [5] interactions. The system presented in this whitepaper does not attempt to achieve decentralisation, but instead attempts to address some of the drawbacks surrounding existing centralised stable-coins. These drawbacks include difficulties regarding the storage of physical or economic wealth, and the increasing likelihood of attacks, as a single entity 1 2. The ChronoBank System Similar to existing stable-coins (such as USDT by Tether and Digix), we propose a centralised entity that coordinates the creation, redemption, and destruction of Labour-Hour Tokens (LHT). We refer to this entity as the ChronoBank Entity (CBE). It is responsible for the acquisition and coordination of legally binding contracts for labour, in addition to the creation and dissemination of LHT. Ultimately the role of the CBE is to ensure the stability centralises the entire wealth of the system. Typical stablecoins are also subject to fluctuations in the value of their underlying asset. While these fluctuations are usually very small when compared with fluctuations in traditional cryptocurrencies, they are still significant. For example, USDT is subject to the devaluation of USD due to inflation. In this paper, we propose a stable cryptocurrency system which addresses the aforementioned drawbacks of existing stable currency solutions. Specifically, we propose a new type of token which is not backed by any existing fiat currency or physical store of wealth, but instead is backed by legally binding contractual obligations to provide real-world labour-hours. As such, the system and its controlling entity are not responsible for the centralised storage and management of wealth. Further, the value of an unskilled labour-hour in a particular geographic region naturally adjusts according to economic conditions such as inflation, thereby maintaining the long-term intrinsic value of the cryptocurrency. This paper is organised as follows: In Section 2 we provide an overview of the system as a whole before discussing the technical details of the necessary system components and processes. Section 3 provides economic considerations in brief, regarding the real-world deployment of this system and its feasibility. Finally, Section 4 discusses future directions and applications of the system and of ChronoBank. The appendix of this document provides supporting reference of several concepts introduced throughout the paper. In particular Appendix B and C list the variables that encapsulate the functionality of the system. These variables are also summarised in Table 1.

2 Publizr Home


You need flash player to view this online publication