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An Architecture for the Internet of Money - Meher Roy
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Satoshi Nakamoto’s great invention of Bitcoin can be appreciated as having 2 distinguishing features:

Bitcoin is a public decentralized cryptographic ledger with basic ledger contracting capabilities.

The cryptographic ledger tracks balances of a new currency bitcoin.

Effort has been directed towards architecting a parallel financial system with bitcoin the currency as a base layer. The driving force are flexibility benefits of cryptographic ledgers enabling new use cases like Multi-signature accounts, Decentralized exchange, Machine to machine transactions etc. This paper analyzes applications of cryptographic ledgers in the current financial system and aims to stimulate the discussion:

What are the speed, cost and flexibility advantages that can be realized if financial institutions tracked asset and liability balances utilizing public decentralized cryptographic ledgers with basic ledger contracting capabilities?

Such ledgers enable new ways to build Real Time Gross Settlement systems like CHAPS and FedWire; Deferred Net Settlement systems resembling ACH, Bacs and correspondent banking; foreign exchange markets; stock exchanges and other pillars of the financial system. This article encapsulates these disparate elements into a coherent layer based framework christened “The Internet of Money”.

Perceived benefits from the Internet of Money will be enumerated along with system descriptions. These benefits form the motive for the proposal.

Abbreviations and Definitions

ACH: Automated Clearing House, a system enabling Deferred Net Settlement basis retail payment processing in the United States.

Bacs: A system enabling Deferred Net Settlement basis retail payment processing in the United Kingdom.

CHAPS: The primary Real Time Gross Settlement funds transfer system utilized for high-value transfers in the United Kingdom.

Consensus Pool: A set of servers, with defined owners, that continuously arrive at consensus on the state of a ledger using a fault tolerant algorithm. Healthy consensus pools are characterized by several servers controlled by different parties.

DApp: Decentralized Application.

DE: Decentralized Exchange.

DEP: Decentralized Exchange Protocol, described in section 7a.

DNS: Deferred Net Settlement.