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Apr 8, 2019 | White Paper

An Electronic Cash System with Emergent Reputation


A peer-to-peer electronic payment network with emergent reputation would allow financial institutions to fund green, infrastructure, development and impact projects through corporates in emerging economies. It would also greatly reduce theft, corruption and counterfeiting. Digital signatures form the basis of asset transfer within the network and offline receipt of payments is supported. Communication within the network is asynchronous with an expectation of intermittent connectivity. Reputation within the network can facilitate a meritocracy and entrepreneurship leading to faster economic recovery.

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Financial institutions currently have difficulty providing funds at an individual level due to their need to disburse large amounts and the ever-present opportunities for fraud. This gives rise to a complex “trickle down” approach that appears to be ineffective as funds are subjected to fees by intermediaries and can be diverted away from their intended use.[1]

What is needed is a network that provides these institutions with assurance that the funds provided reach their intended recipients and that they are used for their intended purpose. In this paper, we propose a payment network that meets these needs and assists with economic recovery.



We start with an example: an international body wishes to provide foreign direct investment to corporates that meet the requirements of the funds mandate such as green, impact and/or development initiative in an emerging economy or post conflict zone. A dispersal profile is created indicating how the funds are to be allocated and what they should be spent on. A collection of payments is made in suitable currencies (both national and cryptographic) to segregated accounts to act as auditable backing. Assets are generated within the network with contracts to enforce the dispersal profile. Ownership of the assets is then transferred via a payment process to the recipients.

The recipients can only spend these assets with the third parties within the dispersal profile (e.g. contractors building fiber-optic network, cell towers) which significantly reduces the opportunities for fraud. After the assets have been spent they may, subject to the dispersal profile, become fungible and can be used as electronic money. The recipient receives a reputation as a result of their honest involvement in the transaction. This reputation drives the potential for further funding within the system which acts as a game theoretic motivator for repeated use.

At some point, a recipient may wish to convert their assets back into the original backing asset via the segregated account. This can be accomplished by authorised agents (such as local financial institutions) offering exchange facilities. These institutions can then make a claim against the segregated account to receive the face value of the asset together with a simultaneous removal of the corresponding cryptographic asset from the network.


We propose that the network will be private and peer-to-peer with a controlled on-boarding process to ensure the legal identities of the peers are known. Each peer will provide various services to the network to assist with asset tracking and other flows. Messages between peers are not known to other peers to reduce information leaks relating to financial information. Figure 1: A schematic representation of the system

Key management

We propose that all messages are digitally signed using a public key infrastructure. Consequently, control of private keys within the system is critical to its overall security. We adopt a balanced approach of assisting asset recovery while respecting the authority of the recipient.

We use a cryptographic seed (256 bit random number) from which a one-way hierarchy of private and public keys are generated. This is the “hierarchical deterministic” approach to key generation which has become the de facto standard for Bitcoin[2,3] wallets. We store the seed on the recipient’s device symmetrically encrypted with a passphrase known only to the recipient.

During the seed creation process the recipient is shown a 24-word seed phrase that can be written down and stored securely[4]. We also offer the option of secret sharing so that the seed phrase can be securely distributed between trusted contacts and the network for social recovery via an m-of-n key recovery process. This approach reduces the administrative burden to the network and allows for timely key recovery for the recipient.



  1. Alan Safahi, “Cutting money transfer fees could unlock $15bn for developing countries. Here’s how”
  2. S. Nakamoto, “Bitcoin: A Peer-to-Peer Electronic Cash System”
  3. Pieter Wuille, “Hierarchical Deterministic Wallets”
  4. Marek Palatinus, Pavol Rusnak, Aaron Voisine, Sean Bowe, “Mnemonic code for generating deterministic keys”



Kyle Hauser – CEO & Founder of Yokiki

Gary Rowe – CTO & Co-Founder

Jim Burton – Lead Developer & Co-Founder

Barry Childe – Business Development Advisor & Co-Founder


We have also created a downloadable version of the white paper which is available as a PDF.

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