TNT – a layer 1 network

TNT – A Layer 1 Network

By Joseph Mark Haykov

January 16, 2024

Abstract

This white paper introduces Trust Network Technology (TNT), a groundbreaking payment system that redefines trust in the realm of digital transactions, moving beyond traditional processors like Bitcoin miners or Ethereum validators. TNT's core innovation is enabling recipients to independently authenticate transactions, a feature reminiscent of the directness and reliability seen in historical gold coin or cash exchanges. Similar to the way individuals receiving gold, silver coins, or cash can verify the authenticity of these payment mediums on their own, TNT facilitates direct money transfers between spender and recipient without third-party involvement. This advance significantly reduces the risk of debt-credit mismatches, colloquially known as 'double spending', and enhances operational efficiency by obviating the need for energy-intensive and time-consuming mining processes. TNT marks a significant shift in digital transactions, marrying the trust and reliability of traditional payment methods with the efficiency and scalability of modern technology.

Introduction

In today's rapidly evolving digital financial landscape, the demand for secure, efficient, and transparent payment systems is more critical than ever. This paper aims to explore the advantages of the Trust Network Technology (TNT) Layer 1 payment system, highlighting it as a forward-thinking alternative to traditional payment models currently dominating the market. Unlike conventional Layer 1 blockchain technologies that depend on 'proof' mechanisms, such as proof of work, proof of history, and proof of stake, TNT introduces a novel approach to transaction validation.

The increasing market valuation of Bitcoin, which is nearing a 1 trillion dollar market cap as of January 2024, underscores the vital role of trust and security in blockchain systems. Interestingly, Bitcoin's inefficiency as a medium of exchange—where each transaction incurs significant real-world costs in electricity, cooling, and mining equipment—ironically bolsters its value. This inefficiency is central to the trust associated with the proof of work system.

In contrast, none of the competing cryptocurrencies, including proof of stake-based alternatives like Ethereum, have reached Bitcoin's market capitalization. This difference stems partly from the inherent characteristics of their respective systems. Proof of stake models, for instance, carry a potential risk for collusion among validators, which could enable fraud with no substantial cost to the perpetrators. On the other hand, any attempt to steal or manipulate Bitcoin requires a considerable investment of real-world resources, making such fraudulent activities impractical and unlikely from a game-theoretic standpoint. This dynamic contributes significantly to Bitcoin's enhanced security and overall value.

TNT revolutionizes transaction validation by streamlining the process and removing the need for intermediary proofs. It facilitates direct transactions between spending and receiving wallets, akin to cash exchanges between a buyer and a seller, but with no third-party involvement. This method presents numerous advantages: it not only lowers the risk of counterfeiting below Bitcoin's level but also avoids the need for energy-intensive mining. As a result, TNT can handle an exceptionally high volume of transactions, rivaling major processing networks like Visa and FedNow in terms of capacity.

Layering and Cryptocurrency Operations

In the complex world of cryptocurrency, two foundational technologies are consistently employed across various platforms, including Bitcoin, Ethereum, and others like Polka Dot, Solana, Cardano, and Ripple. This foundational layer, known as Layer 0, relies on cryptographic hash functions and public-private key encryption to securely record and link blocks of digitally signed transactions. This layer forms the backbone of a cryptocurrency's architecture, enabling it to function as a secure store of value and an almost unalterable, recursively linked blockchain.

Layer 1, as defined in this white paper, represents the payment processing layer. It involves nodes such as miners and validators, which facilitate the actual transaction process within the cryptocurrency network. Together with Layer 0, these layers create a digital double-entry bookkeeping system essential for maintaining an accurate general ledger of all digital token transactions. This system ensures a transparent and traceable flow of currency, debiting the spender's wallet and crediting the receiver's, thereby maintaining transaction integrity.

The strength of Layer 0 lies in its robust security mechanism. Incorporating advanced cryptographic methods, including digital signatures and hash functions, Layer 0 blockchain makes any attempt to alter historical data easily detectable. This feature is crucial for maintaining the integrity of the system, as it allows honest bank clients to easily identify and disregard dishonest copies of the blockchain. Additionally, the architecture ensures that spending digital tokens requires a private key corresponding to the wallet's public key, significantly enhancing transaction security.

However, a notable challenge within Layer 0 blockchain is the risk of losing digital tokens. It is estimated that over 30% of all digital tokens have been permanently lost, primarily due to misplaced or forgotten private keys. This significant loss highlights the importance of secure private key management and underscores the near impossibility of conducting dishonest transactions within this layer, further emphasizing its inherent security.

In conclusion, the Layer 0 blockchain of cryptocurrencies, with its robust security mechanisms, forms an essential foundation for the secure and trustworthy operation of digital currencies. While its strength in preventing fraudulent activities is undeniable, the challenges it presents, such as the risk of lost digital tokens, are critical considerations in the ongoing development and management of cryptocurrency systems.

Introduction to Layer 1, as Distinct from Layer 0 (or Blockchain)

In the architecture of cryptocurrency systems, distinguishing between Layer 0 and Layer 1 is crucial for understanding their full range of capabilities. Layer 0, commonly known as the blockchain, excels in recording coin payments as debits and credits, akin to entries in a bank's general ledger, and computes the resulting wallet balances. This foundational layer is shared across all cryptocurrencies, providing a secure record of transactions.

However, it is Layer 1, the payment processing layer, that imparts unique characteristics to each cryptocurrency, enabling their practical use as mediums of exchange. Layer 1 consists of a network of nodes responsible for crucial tasks such as transaction validation, block creation, and network consensus. These nodes, which vary among different cryptocurrencies, include miners in Proof of Work systems like Bitcoin, validators in Proof of Stake systems like Ethereum, and analogous roles in other protocols.

These payment processing nodes, typically operated by a select group of wallet holders, play a vital role in the cryptocurrency ecosystem. They authenticate and record all digital asset payments, ensuring the integrity and accuracy of transactions. This layer transforms digital assets from mere stores of value to functioning currencies, enabling everyday transactions and practical usage in the digital economy.

Layer 1's role is pivotal in facilitating cryptocurrencies as not only investments or reserves but also as practical means of exchange. This layer's operations vary among cryptocurrencies, contributing to the diverse landscape of digital currencies. For example, Bitcoin's Layer 1 involves miners solving complex mathematical problems, while Ethereum is transitioning to a system where validators stake their own coins to validate transactions.

A thorough understanding of Layer 1 and its distinct functions is essential for appreciating the security measures, transaction processing capabilities, and overall utility of modern cryptocurrency systems. As we delve deeper into the intricacies of Layer 1, we will explore how these functionalities contribute to the robustness and versatility of cryptocurrencies in today's digital economy.

Layer 1: Where the Challenge Lies

Grasping the intricacies of Bitcoin's original payment processing method, Proof of Work (PoW), is vital to understand why Bitcoin remains the most valuable cryptocurrency despite its high operational cost and inefficiency. The cornerstone of Bitcoin's high valuation lies in its perceived trustworthiness and security. While PoW is theoretically vulnerable to a 51% attack and has faced real-world challenges, including intervention from authorities like the FBI, Bitcoin's reputation as a secure and reliable cryptocurrency remains unshaken. These vulnerabilities, coupled with the substantial mining costs, have not deterred its position as a trusted digital currency. The community's perception of Bitcoin as the most secure option, with minimal risk of theft, significantly contributes to its market value.

The security advantage of Bitcoin's PoW is not merely perceived but is rooted in mathematical facts, as we will explore in the next section. This fact becomes more pronounced when compared with alternatives like Ethereum's Proof of Stake (PoS). Ethereum and other digital currencies like Ripple, Cardano, Solana, and Polkadot employ different Layer 1 payment systems, such as Proof of History, each with its unique consensus mechanisms and payment processing methods.

Despite the advancements in these diverse cryptocurrencies, Bitcoin's established track record and robustness continue to set a high standard for security and reliability in the market. As of [specific date or time frame], the total cryptocurrency market cap is approximately $1.7 trillion, with Bitcoin alone accounting for over $900 billion. This figure significantly surpasses the market cap of Ethereum, the next most valuable cryptocurrency, which exceeds $200 billion. However, Ethereum's PoS system, while respectable, has yet to match the trustworthiness of Bitcoin, pending developments in technologies like true-no-trust TNT.

Bitcoin's dominance in the market is a reflection of not just its longstanding reputation, but also the confidence and widespread adoption it enjoys among investors. Despite the competitive and evolving nature of the cryptocurrency market, Bitcoin's status as a secure and reliable digital asset continues to resonate with users globally. Its significant market capitalization is indicative of the growing importance and acceptance of cryptocurrencies in the global financial landscape, with Bitcoin leading as a prime example of success and stability in this rapidly advancing field.

Why Bitcoin is So Valuable: The Trustworthiness of Proof of Work

Bitcoin's preeminent status as the most valued and trusted cryptocurrency, with a market cap nearing $1 trillion, largely stems from its underlying Proof of Work (PoW) technology. This framework is distinct in requiring substantial real-world electricity consumption and other resources for its operation, contrasting sharply with Proof of Stake (PoS) systems. In PoW, the commitment of extensive physical resources, such as electricity and specialized mining hardware, not only secures the network but also makes collusion among miners economically unfeasible. This significant investment in real-world wealth forms the bedrock of Bitcoin's value proposition, ensuring the network's security and resistance to manipulation.

In comparison, PoS systems, while more energy-efficient, pose a risk of network centralization. Validators in PoS systems are typically those who can afford to stake large amounts of coins, potentially leading to concentrated control. This contrasts with Bitcoin's PoW, where the extensive and tangible real-world investment required for mining makes the system more resilient to collusion and fraud.

However, the energy-intensive nature of PoW has raised concerns about its environmental impact, a factor that influences Bitcoin’s valuation and perception. The significant energy consumption of PoW is a critical consideration in the ongoing debate over the sustainability of cryptocurrencies.

The introduction of Trust Network Technology (TNT) and the TNT-bank concept offers an innovative approach to this landscape. Unlike traditional banking or other cryptocurrency systems, in a TNT-bank, all clients also function as peer-to-peer node providers. Each wallet holder is required to provide a node to verify the integrity of incoming coin payments, eliminating the need for third-party payment processing nodes. This approach fosters a decentralized and transparent banking experience, where bank clients effectively become the bankers themselves.

To conclude, Bitcoin's PoW system underpins its value as a secure and reliable cryptocurrency, rooted in the considerable real-world wealth expended on mining. Its robustness against manipulation and fraud contributes to its enduring trustworthiness. However, as new technologies like TNT emerge, they offer potential alternatives that could reshape the future of digital currencies. TNT's model of decentralization and transparency presents a contrasting approach to traditional and current cryptocurrency systems, suggesting a path towards more sustainable and equitable financial networks. This shift towards systems where clients are actively involved in the verification process represents an evolution in the cryptocurrency space, potentially addressing some of the centralization and sustainability concerns of existing models.

In essence, while Bitcoin's PoW system continues to set a high standard for security and trust in the cryptocurrency market, the evolving landscape, marked by innovations like TNT, indicates a dynamic future. These advancements could redefine what constitutes a secure, efficient, and trustworthy digital currency, offering new opportunities and challenges in the ever-growing realm of digital assets.

TNT – A New Way in Layer 1 Payment Processing: Independence from Third Parties

Trust Network Technology (TNT) introduces a groundbreaking approach in Layer 1 payment processing, markedly distinguishing itself from traditional cryptocurrency systems. Central to TNT's innovation is the implementation of a double-matching digital signature process for each valid TNT-coin transaction. This unique method requires a digitally signed debit from the spender's wallet and a corresponding digitally signed credit to the recipient's wallet, authenticated using a dual-approval public key.

In TNT, each wallet is equipped with two public keys: one for authorizing coin spending and another for receiving payments. The corresponding private keys are securely held by the wallet owner. The primary public key authenticates debits from the account, while the dual-approval key pair is exclusively used for digitally signing incoming payments. This dual-key strategy enhances transaction security by preventing overspending and enabling recipients to refuse payments from untrusted sources. Moreover, it ensures that the general ledger remains balanced and that the receipt of payments can be independently verified.

TNT's requirement for explicit authorization from both transaction parties significantly elevates its security and integrity. The dual signature mechanism not only authenticates each transaction but also establishes complete independence from third-party intermediaries. Transactions are independently certified by the receiving wallet, aligning with the principles of decentralized finance. This approach empowers individuals with direct control and verification in their transactions, representing a paradigm shift in the dynamics of payment processing in the digital currency space.

TNT's pioneering methodology champions a more secure, transparent, and self-reliant financial environment. It resonates with the evolving trends in decentralized finance, offering users greater autonomy and control over their digital transactions. This innovation is set to make a substantial impact in the digital currency market, heralding a new era of financial independence and security.

Implementing a Structured Time System for Payment Processing in TNT

TNT's novel approach to digital currency transaction processing represents a significant departure from conventional systems. By adopting a structured time system synchronized globally using a standard like GMT, TNT designates specific intervals exclusively for processing transactions. During these periods, all nodes temporarily cease accepting new payment instructions, concentrating instead on efficiently settling and recording pending transactions. This method, contrasting with the continuous, ad-hoc processing in traditional Layer 1 systems, effectively mitigates network congestion and significantly accelerates transaction efficiency.

The adoption of pre-defined, universally synchronized time slots introduces an element of predictability and order, reminiscent of traditional financial exchanges like the NYSE, where transactions are settled during non-trading hours. This structured approach, with clear intervals for transaction initiation and processing, ensures an orderly and efficient payment process. The streamlined workflow in TNT allows for rapid transaction processing, as it solely requires the validation of digital signatures, eliminating the need for more complex tasks like mining.

The utilization of GMT as the global clock standard is instrumental in achieving uniformity and precision in transaction synchronization across the TNT network. Network clocks, synchronized to an exceptionally high degree of accuracy using atomic clocks, bolster the integrity and reliability of the transaction process.

TNT's structured-in-time system, blending traditional financial protocols with digital currency innovation, presents a familiar yet advanced framework to users accustomed to traditional financial models. This approach not only strengthens network security and stability but also enhances user experience by offering a more predictable and orderly transaction environment.

In summary, TNT's adoption of this innovative system for payment processing marks a pivotal advancement in digital currency methods. It reflects TNT's commitment to creating a platform that is secure, efficient, and user-friendly, merging the best practices of traditional finance with the unique benefits of digital currency. This approach positions TNT as a forward-thinking entity in the digital currency market, potentially influencing future trends in transaction processing methods.

Focused Validation of Transactions in TNT

A pivotal aspect of TNT’s structured payment processing system is its approach to focused validation of transactions during predefined intervals. In these periods, all honest peer-to-peer nodes in the network engage in a synchronized effort to validate the same block of updates. This collective approach not only ensures uniformity in data processing but also significantly reduces the risks of discrepancies and fraudulent activities within the network.

The controlled timeframe for accepting new payment instructions is instrumental in facilitating comprehensive scrutiny of each transaction. By limiting the validation process to these specific intervals, TNT effectively prevents new payment instructions from being added to the pending update block. This approach guarantees thorough verification of all transactions before their finalization, reinforcing the network's security, efficiency, and overall integrity.

TNT also offers clients the flexibility to tailor their involvement in the validation process. Clients have the option of conducting complete and independent validation, maintaining direct control and oversight. Alternatively, they can collaborate with trusted global nodes, a choice that may be more appealing for those who prefer not to engage directly in the validation process or who seek additional assurance from established, reputable nodes in the network. This flexibility in the validation approach makes TNT’s system adaptable and user-centric, catering to a diverse range of client preferences and requirements.

In summary, the focused validation of transactions during specific intervals, combined with the option for client involvement and collaboration, underscores TNT's commitment to providing a secure, efficient, and adaptable payment processing platform. This innovative approach enhances the reliability of transactions and offers users a tailored experience, positioning TNT as a forward-thinking and client-oriented solution in the digital currency market.

Doubly-Digitally Signed Payments: Debits and Credits in TNT

A fundamental aspect of TNT’s innovative payment processing system is its requirement for doubly-digitally signed transactions, which encompass both debits and credits. This dual-signature mechanism represents a significant departure from traditional digital currency systems. In TNT, the spender's wallet digitally signs all debits, authenticating the intention to spend, while the receiver's wallet digitally signs the credits, confirming acceptance of the funds. These signings are facilitated not personally, but by independently owned and operated incoming payment verification nodes.

Wallet holders can individually own and operate such nodes, available at a low monthly cost from services like AWS, maintaining direct control over their transaction validation. Alternatively, wallet holders can opt to outsource the validation of incoming payments to a correspondent clearing bank or a trusted third-party independent validator – an 'invalidator' in TNT-bank terminology. This term reflects the unique approach of TNT, where a transaction impacts the balance only when it is signed by both parties involved.

This dual-signature mechanism ensures mutual authentication of each transaction, significantly enhancing the security and integrity of the TNT network. It provides a robust framework that requires consent and validation from both the sender and receiver for a transaction to be considered complete. For example, when a spender initiates a transaction, it is only deemed valid and recorded in the ledger after the recipient's node has also authenticated and accepted it.

This process not only verifies the authenticity of the transaction but also empowers the receiving wallet to independently verify the spender's status and reject unwanted payments. Consequently, TNT transactions are marked by comprehensive authentication, balance, and integrity, with the general ledger reflecting a mutually agreed and validated record of all transactions.

The implementation of this doubly-digitally signed transaction process is fundamental in enhancing TNT’s security and reliability. It effectively mitigates the risk of unauthorized payments, ensuring that every transaction is a product of mutual agreement and validation by both involved parties. This innovative approach plays a crucial role in maintaining the accuracy and integrity of the entire transaction process, reinforcing the trust and dependability that are integral to the TNT system.

Crossing Sessions for Processing in TNT

A key innovation in TNT's payment processing system is the implementation of 'crossing sessions.' These are structured intervals, scheduled during predefined time periods, such as alternating between odd and even minutes, specifically designed to separate the acceptance of payment instructions from their actual processing. This approach creates a clear demarcation between different phases of the transaction cycle, enhancing both security and efficiency.

Crossing sessions play a crucial role in TNT’s system by temporally separating the signing of debits from the corresponding signing of credits within the double-entry bookkeeping system. This separation allows for complete and independent verification of all payments, ensuring the accuracy and security of the ledger while streamlining the transaction process.

During these sessions, each transaction component undergoes rigorous validation. The process begins with the signing and confirmation of debits, followed by the credits' signing. This sequential batch approach allows for careful examination of each transaction, ensuring that all entries are valid, properly authenticated, and accurately recorded in the ledger before finalization.

TNT's structured-in-time approach, which distinctly separates transaction processing from the issuance of payment requests, marks a significant advancement over traditional continuous processing systems. By providing a more organized and secure method for managing cryptocurrency transactions, TNT enhances the overall transactional integrity and efficiency. This innovative system reflects TNT's commitment to advancing digital currency realms with orderly, reliable, and efficient transaction processes, positioning it as a pioneering entity in the digital currency market.

Trustless Verification Process in TNT

A key advantage of TNT’s innovative payment system is its focus on a trustless verification process, which represents a paradigm shift in blockchain technology. By eliminating reliance on the honesty of individual node owner-operators, TNT fosters an environment where trust is intrinsic to the system itself. Each node within the TNT network has the capability to independently verify that all other nodes are processing the correct block of updates, significantly enhancing system security and reliability.

This trustless verification is made possible through TNT's requirement for each bank client to provide a secondary public dual-approval key, which is uniquely matched with a corresponding private key. Stored on a trusted node and dedicated solely to validating incoming payments, this private key is crucial for signing all incoming payments to a wallet. Notably, it cannot be used for issuing outgoing payments, maintaining the integrity of each transaction under TNT's stringent true-no-trust protocols.

Clients in TNT have the option to operate their own node, which can be facilitated at a potentially low cost using cloud services like AWS or through compiling open-source software. This independent verification capability is a defining feature of TNT, providing users with enhanced security and control. For those who prefer not to manage their own node, outsourcing to a trusted core node remains a viable option. In either scenario, without the requisite digital signatures, no payments will be accepted into any TNT wallet, embodying TNT’s core principle of 'no trust without verification.'

TNT’s method of trustless verification marks a significant advancement in digital transaction processing. It ensures the integrity and trustworthiness of every transaction within the network, representing TNT’s commitment to providing a secure, efficient, and transparent platform in the blockchain space.

In Summary: TNT's Layer 1 Payment Processing System

TNT's Layer 1 payment processing system marks a significant advancement in the realm of cryptocurrency transactions. It stands out with its structured, secure, and efficient methodology, distinguishing itself from traditional cryptocurrency payment practices.

Structured Intervals: TNT employs specifically designated time intervals for processing payments. This systematic approach helps alleviate network congestion and enhances overall security. By preventing a continuous inflow of transactions, it fosters a more orderly and secure environment for payment verification and processing.

Focused Validation: During these specified intervals, all network nodes concentrate on validating a fixed block of updates. No new payments are accepted by any honest node during these periods, making any attempt at cheating easily detectable. This focused validation ensures complete synchronicity and uniformity in transaction processing, effectively eliminating the possibility of dishonest behavior unless collectively agreed upon by all honest user-bankers/clients.

Doubly-Digitally Signed Transactions: A defining feature of TNT is its requirement for digital signatures on both debits and credits. This dual-signature mechanism not only certifies each transaction's honesty to any third party but also ensures the balance and accuracy of the ledger. It adds an extra layer of security through independent verification, enhancing the integrity of every transaction.

Trustless Verification Process: TNT's trustless verification model allows any node in the network to independently confirm that all nodes are processing the same, universally agreed-upon block of updates. This approach significantly bolsters the network's reliability and security, creating a transparent and secure transaction environment.

In conclusion, TNT's innovative approach in Layer 1 payment processing establishes new benchmarks in security, efficiency, and reliability within the cryptocurrency sector. Its unique features position it as a pioneering system in digital currency, redefining standards in transaction processing, validation, and security.

TNT's Payment Processing System in Action: Alice Transfers Digital Currency to Bob

To understand TNT’s innovative payment processing system, consider a transaction where Alice transfers digital currency to Bob. TNT operates on a time-based protocol, alternating between odd minutes for initiating payments and even minutes for processing them.

In our example, Alice initiates the payment during an odd minute by digitally signing a debit instruction from her account, signaling her intent to transfer funds to Bob. As the system clock, synchronized globally to a standard like GMT, ticks into the next even minute, TNT’s peer-to-peer nodes switch to processing mode. During this phase, no new payments are accepted, and the focus is on processing transactions initiated in the preceding odd minute.

Bob’s node, during the first seconds of the even minute, receives a notification of Alice’s incoming payment. To complete the transaction, Bob’s node must digitally sign the credit instruction within the update block. Should Bob choose not to sign, perhaps due to insufficient funds in Alice’s account or his reluctance to accept funds from her, the transaction will be invalidated, and Alice’s funds will remain in her account. Invalidated transactions, while not affecting account balances, are still recorded in the TNT-bank blockchain for transparency and potential future dispute resolution.

Once the payment processing period concludes, the network’s nodes collectively validate all transactions, ensuring accuracy and legitimacy through the verification of double digital signatures. The general ledger is then updated to reflect the new balances for Alice and Bob, finalizing the transaction securely and efficiently.

TNT’s system transcends traditional cryptocurrency payment processing by enhancing transaction integrity and reliability. By enabling precise authentication and validation within a structured environment, TNT establishes a secure and efficient platform for digital currency transactions. It ensures that only mutually agreed-upon transactions by the involved parties are processed and validated, reinforcing trust and dependability in digital currency exchanges.

A Pivotal Innovation in TNT’s System: Eliminating Traditional Intermediaries

One of the most significant innovations in TNT’s payment processing system is the elimination of traditional intermediaries, such as miners or validators, who typically play a central role in traditional cryptocurrency networks. TNT diverges from this norm by empowering the primary parties in a transaction—the spender and the recipient—to directly verify transactions themselves. This shift in responsibility renders traditional intermediaries obsolete, much like the directness and transparency of exchanging physical gold coins.

In TNT’s model, the power of verification lies with the transaction participants. This approach not only simplifies the transaction process but also significantly fortifies it against fraud and dishonesty. Each participant becomes actively involved in validating transactions, mirroring the tangibility and directness of physical gold coin exchanges, but within a digital context.

Moreover, TNT leverages a decentralized network of independent owner-operators of peer-to-peer nodes using open-source software. This model allows each bank client to independently operate and audit their node, enhancing the overall transparency and trustworthiness of the system. The open-source nature of TNT’s infrastructure guarantees that all network participants have the capability and autonomy to independently verify the system’s security and integrity.

This methodology marks a fundamental paradigm shift in the processing of digital currency payments. Moving from a system reliant on trust to one based on verification, TNT integrates security and reliability into the very architecture of its network. The system itself becomes the guarantor of transaction integrity, positioning TNT as a pioneering model in the digital currency landscape. This approach sets new benchmarks for secure, efficient, and transparent financial transactions, establishing TNT as a trailblazer in the realm of digital currencies.

The Best Part of TNT: The Role of Custodian Banks

A defining feature of the TNT infrastructure is its empowerment of receiving wallets in controlling incoming payments. In TNT's true-no-trust system, transactions require dual authentication with the recipient wallet's dual-approval key to be validated. Payments lacking this signature are invalidated and returned, ensuring that recipients have full control and oversight over funds entering their wallets.

This feature is particularly beneficial for custodian banks operating within the TNT system. These banks have the capability to monitor, approve, and scrutinize all transactions on the TNT-bank blockchain that involve their funds, especially ensuring compliance with stringent anti-money laundering (AML) and know your customer (KYC) regulations. This level of oversight is crucial in preventing financial crimes such as money laundering.

Consider a hypothetical scenario where a major bank like JP Morgan issues its digital currency, JP Morgan Dollars (JPMD), on the TNT-bank blockchain. In this setup, to accept JPMD, a wallet must be linked to an active JP Morgan bank account. JP Morgan would manage the dual-approval payment receiver’s public key for these wallets, aligning JPMD holdings in TNT-bank wallets with those in JP Morgan’s internal bank accounts.

In this framework, JP Morgan exercises comprehensive control over JPMD transactions, similar to their authority over traditional digital payment systems like ACH transactions. Converting JPMD into US dollar bank account money requires the bank's explicit approval. JP Morgan can trace each JPMD payment's history, ensuring the legitimacy of funds entering its accounts. As a prime broker for entities like Art-Shares LLC hedge funds, JP Morgan maintains high compliance and oversight standards, enhancing transaction security within TNT.

Being legally licensed to issue US dollar units on the TNT-bank blockchain, JP Morgan ensures that these transactions accurately reflect activities in corresponding bank accounts. The bank retains the authority to decline any transaction it deems suspicious, thereby maintaining comprehensive control over incoming JPMD payments.

While art-shares can be exchanged independently, JPMD payments not digitally signed and accepted by JP Morgan are treated akin to cash. For such funds to be accepted back into JP Morgan accounts, depositors must comply with regional KYC and AML regulations, similar to current procedures for large cash deposits under US law. This approach mirrors the role of prime brokers in managing hedge fund accounts and aligns with the services they provide in today's financial landscape.

In summary, TNT’s integration with custodian banks like JP Morgan significantly enhances the system's compliance, security, and transaction legitimacy. By empowering banks to have direct control over transactions involving their issued digital currency units, TNT aligns with established financial regulations and practices. This approach not only ensures transaction legitimacy and oversight but also fortifies the network against potential misuse, making TNT a secure and compliant platform in the digital currency ecosystem.

Expanding TNT's Infrastructure: Embracing Diverse Currency Management with Multiple Custodian Banks

TNT’s infrastructure significantly evolves beyond the conventional single custodian bank model, adopting a strategy akin to a hedge fund working with multiple prime brokers. This expanded framework enables entities like art coin Regulation D LLC general partnerships or hedge funds to engage with a variety of custodian banks. Each of these banks can issue their distinct fiat currency units on the TNT-bank blockchain, fostering a rich diversity in financial options.

Consider the example of VTB bank in Russia issuing its digital currency, VTB Rubles (VTBR), on the TNT-bank blockchain. These VTBRs are rigorously monitored by VTB to ensure adherence to Russian AML and KYC regulations. TNT-bank clients interested in investing in art-share TNTs, instead of holding Russian rubles directly, can conveniently convert VTBRs into rubles in their VTB bank accounts for various purposes, including tax obligations.

This model offers seamless management of digital currencies, aligning with the unique legal and regulatory frameworks of different countries. It empowers clients to diversify their assets across currencies while complying with the financial regulations of each custodian bank's jurisdiction. TNT's infrastructure thus provides not only a secure and efficient platform for digital currency transactions but also a versatile system for global financial management and asset diversification.

Welcome to TNT: the future of true no-trust asset management. In this system, you have direct ownership of your assets without reliance on intermediaries. For instance, if an intermediary like FTX fails, alternative platforms like Coinbase or Binance are available for Bitcoin trading. Similarly, should a financial institution like JP Morgan face challenges, clients can turn to other banks, such as the Royal Bank of Canada, to convert art shares or green coins into fiat money. This approach offers protection against individual bank or country failures, providing comprehensive diversification, including counterparty risk in trading—a key advantage now fully manageable within TNT.

TNT advocates for complete disintermediation by enabling verifiable honesty, eliminating the traditional need for trust. This approach allows for extensive diversification of counterparty risk, adding inherent value to TNT-bank money itself and positioning TNT as a revolutionary platform in the digital currency landscape.