Crunchfish Digital Cash is the Internet of Payments
Figure: Crunchfish Digital Cash native layer-1 and non-native layer-2 solutions are for payments what the internet is for information sharing.
Any public good in the society like the internet, electricity or telecom must be carefully designed to continue working despite temporary outages of the service. Digital Payments is such a public good that also should be inclusive, resilient and offer privacy, just as physical cash we are used to today. Central Banks should demand that all closed-loop and Real-Time Payments services must fulfill these design criteria to be allowed to operate in the country. The Central Banks should also take it upon themselves to establish these design goals before making any technology choices, as such tend to limit or even work against to their own desired outcome. Crunchfish Digital Cash delivers on all the design goals of the internet and is designed to augment any payment service with these properties. Furthermore, Crunchfish Digital Cash delivers all requirements of a CBDC implantation as a non-native layer-2 solution, interoperable with any digital payment rail.
The Defense Advanced Research Projects Agency (DARPA) developed the 1970s a suite of protocols for packet switched networking. These protocols, which include the Internet Protocol (IP) and the Transmission Control Protocol (TCP) are in wide use for commercial networking. These protocols have also influenced other protocol suites, most importantly the connectionless configuration of ISO protocols.
In the important paper “The design philosophy of the DARPA Internet Protocols” originally published in 1988 by David D. Clark from Massachusetts Institute of Technology he outlines that Internet fundamentally is “a packet switched communication facility in which a number of distinguishable networks are connected together using packet communications processors called gateways which implement a store and forwarding algorithm.” This is how Crunchfish Digital Cash works for payments. There are also secondary design goals where Crunchfish Digital Cash has implemented an equivalent protocol for payments as described below:
1.Internet communications must continue despite loss of networks or gateways, i e payments need to have survivability in the face of failure, essentially meaning that payments should work offline, regardless of internet connectivity or backend banking services. The architecture of Crunchfish Digital Cash masks completely any temporary failure and supports the underlying payment service with both native layer-1 use cases and non-native layer-2 tokens.
2. The internet must support multiple types of communication services, i e Digital Cash must support and be interoperable with multiple payment services, which calls for use cases with non-native layer-2 tokens.
3. The internet architecture must accommodate a variety of networks, i e Digital Cash must be agnostic to the online payment rail and not constrain the type of payment rails that can be used. Again, the non-native layer-2 tokens of Crunchfish Digital Cash are very suitable.
4.The internet architecture must permit distributed management of its resources, i e the front-end Digital Cash Trusted Application must be an independent payment ledger capable of keeping a balance and signing out transactions implemented in a Trusted Environment.
5. The internet architecture most be cost effective, i e the front-end Digital Cash Trusted Application must primarily be implemented in software-based Trusted Environment on smartphones or on smartglasses in the not too distant future.
6. The internet architecture must permit host attachment with a low level of effort, i e the front-end Digital Cash Trusted Application should be able to connect over long-distance using either internet protocols or SS7 signalling over telecom networks to top-up the balance, make offline payments or initiate settlement.
7. The resources used in the internet architecture must be accountable, i e the front-end Digital Cash Trusted Application should bind the user to the wallet and the offline transaction. Depending on regulatory Know-Your-Customer requirements the user may be an anonymous alias able to make smaller transactions ensuring privacy balanced with tax evasion and Anti-Money Laundering requirements.
Crunchfish CEO will introduce these ideas today at an expert panel discussion on “Offline payments for CBDCs and financial inclusion” at the ITU’s DC conference “From cryptocurrencies to CBDC” at 11.00 CET / 15.30 IST. Last week, on January 19th 2023, Crunchfish released in partnership with Lipis Advisors the first whitepaper in a new whitepaper series “Enabling Offline Payments in an Online World” with a focus on practical offline payments design. It was followed by a webinar where the whitepaper was first presented by Bonni Brodsky at Lipis Advisors and then followed by a panel discussion with Beju Shah, Head of the Nordic Innovation Hub at Bank of International Settlement and Crunchfish CEO Joachim Samuelsson. The first whitepaper and recorded webinar on “A practical guide for offline payment design” is available by this link.
For more information, please contact:
Joachim Samuelsson, CEO of Crunchfish AB
+46 708 46 47 88
joachim.samuelsson@crunchfish.com
This information is Crunchfish AB obliged to publish in accordance with the EU Market Abuse Regulation. The information was provided by the contact person above for publication 27 January 2023 at 10:00 CET.
Västra Hamnen Corporate Finance AB is the Certified Adviser. Email: ca@vhcorp.se. Telephone +46 40 200 250.
About Crunchfish – crunchfish.com
Crunchfish are a deep tech company developing a Digital Cash platform for Banks, Payment Services and CBDC implementations and Gesture Interaction technology for AR/VR and automotive industry. Crunchfish are listed on Nasdaq First North Growth Market since 2016, with headquarters in Malmö, Sweden and with a subsidiary in India.
