6997100000000000000♠10 milibillon | User(s) Poland, Malta | |
Date of introduction 18 April 2015; 21 months ago (2015-04-18) Money Supply equivalent to Polish złoty (PLN) and Euro (EUR) inflation rate - currently 0,7% | ||
Billon is a peer-to-peer payment system based on digital cash blockchain solution. As contrasted to widely known bitcoin it is not a currency and therefore technically it is a not cryptocurrency, but rather cryptocash. The uniqueness of this system lies in the fact that while it brings the huge cost advantage of infrastructure based on a distributed blockchain, it is fully legal and based on national currency. It is entirely software based solution. Other known approaches to digital cash rely on hardware tokens like Canadian MintChip backed by Royal Canadian Mint. Billon blockchain system is backed by large Polish banks: Alior Bank and PlusBank and it is based on Europe specific legal regulations: EU directive 2009/110/WE passed on 16 September 2009. Based on this regulation the exchange rate of digital cash to national currency is fixed at 1:1 ratio (in case of Billon to Polish złoty). Legally it is recognized as another form of cash and as such it is legally accepted tender, provided of course that a receiving party has appropriate software.
Contents
Characteristics of the system
There is no mining process in Billon architecture, instead the genesis blocks in Billon's blockchain are created by authorised issuer, in this case licensed banks. All the users need a software that contains public keys of the issuers. Also this application just like bitcoin wallet, has to be capable of parsing Billon's digital blockchain format and verifying signatures on incoming and outgoing money. Most importantly, both the sending and receiving party have to register their public keys at the issuing bank. This is done automatically during registration process. To set up, every user of the system chooses login name and generates its own private keys which are presented to the bank for authentication. Once the one-time registration process is completed, the software automates all the cryptography and the user is only required to click "Yes" or "No" to confirm payment.
As opposed to bitcoin's blockchain, the speed of transaction is orders of magnitude faster; for a typical transaction it is less than 10 seconds. The designers of the system, company called Billon, state that their design goal was to provide the same speed of transactions as contactless payment cards with much lower fraud levels, working not only in the physical shops but also between the computers over the Internet and directly between smartphones.
Billon life-cycle
Billon is created inside issuing bank - which exchanges pager or electronic cash into digital cash. Digital cash has form of standardized file with Billon specified crypto-protocol standard. This allows interoperability between multiple blockchains representing digital cash issued by multiple banks. Once Billon blockchain is created and transferred by the bank to the first user, further circulation is done entirely on peer-to-peer bases without any further involvement from the issuing bank. Each entry has a serial number embedded, together with denomination, currency, identifier of the issuing bank as well as layer of digital watermarks and digital signatures. Signatures are both in standard RSA format and on elliptic curves created by bank's HSM. The Billon denomination ranges from standard notes 200, 100, 50, etc. down to very low 1/10 of one grosz (Polish cent). It is called nanopayments and opens up possibilities for direct machine-to-machine price settlements.
Merchant or user wishing to convert digital cash back to electronic or paper cash needs to contact one of the participating Banks or Payment Institutions which sort out cash by issuer, and batches of that cash are than in turn transferred to correct issuing bank for final redemption. Merchants will than receive bank transfer to their bank account or they can withdraw smaller amounts of paper cash at the automated teller machine (ATM) directly from their smartphone without the use of plastic card.