Network Encrypted Sovereign Dollar: a Stable Digital Currency System
Network Encrypted Sovereign Dolloar (NESO) is a stable digital currency system that combines sovereign legitimacy and crypto anonymity, with the goal of allowing a unit of real world economic value to be stored and passed from one party to another without having to a) go through a financial institution, b) compute crypto tokens as proof-of-work, and c) rely on a block-chain network for transaction verification. The mathematical construct of the stable currency maintains par value to the Unites States Dollar, while Three Party Encryption Chain (TPEC) protocol ensures the user and transaction anonymity. There is no need for block chain type of network for transaction verification because three-party encryption with public and private key pairs are used to ensure transaction integrity.
- Introduction
The cryptos are becoming an asset class, but they are not a currency. Cryptos do not meet the two basic prerequisites for a currency: 1) sovereign legitimacy and 2) long-term stability. Another weakness of cryptos is that they need to be bought and sold on a exchange, which by definition is a centralized financial institution. Cryptos rely on blockchain networks for transaction verification, a slow and computationally intensive process that renders it not fit for high volume and high throughput real time financial transactions.
Furthermore, since there are no underlying assets backing the values of cryptos, they will introduce tremendous amount of inflations and leverages into the real world economy if cryptos were to become real world currencies.
What is needed is a mechanism to combine sovereign legitimacy and crypto anonymity for a stable digital currency that does not rely on block chain network for transaction verification, and introduce zero inflations and leverage into the real world economy. In this paper, we propose Network Encrypted Sovereign Dollar, or NESO, for such a stable digital currency system.