The Decentralized Bank Projectby@luisfernandomolina
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The Decentralized Bank Project

by Luis Fernando MolinaMay 18th, 2017
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<em>Where is the “be your own bank” dream after almost 10 years of development with the brightest minds on earth? It is almost forgotten.</em>

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Where is the “be your own bank” dream after almost 10 years of development with the brightest minds on earth? It is almost forgotten.

The cryptocurrency industry was hijacked. It happened quite a long time ago, when the flow of venture capital started flowing into the cryptocurrency ecosystem. Where are we more than two billion dollars later? We are stuck with a lot of centralized services which dilute the transformative potential of the technology Satoshi gave to the world.

Unfortunately a very big percentage of the funding went to the big centralized players of the industry. Just an upgraded version of the current financial system with little chance of producing any change on the status quo. Sadly, very little funding went to standalone wallets or truly decentralized services.

There was a small group of people that understood the divergence and stood firm to the original principles of empowering people and allowing them to be their own bank.

Although many geeks understood how to handle cryptocurrency, regular people were far from being able to enjoy the benefits. Three years ago we drafted a plan to make Satoshi’s dream come true for everyone. That plan started with the Internet of People, which creates the underlying infrastructure needed to enable the Person to Person economy and ultimately decentralized banks. Now that the Internet of People is on the way, we can start thinking on how to build on top of it the Decentralized Bank project. We have already identified all the problems to be solved and created a roadmap which would make Satoshi proud.

Problems to Solve

The main problem for non-geek people to be their own bank is that all this crypto technology is very difficult for them and they perceive it as very risky too. Non geeks won’t make a wallet backup, store safely a copy of the wallet.dat, encrypt the wallet.dat file, or write 12 words without mixing things up. They don’t like these cryptic addresses used to send and receive coins either. They feel scared of typos that could lead to money being lost. They will never put a lot of money on their phone, knowing that it can be lost, stolen, the wallet app mistakenly erased, etc. Non geeks will never do cold storage or even understand what it is. It is simply too risky and too difficult in comparison to the perceived benefits. These are the reasons why cryptocurrencies might never get mass adopted, since their real advantage is when you handle and control them by yourself.

Even geeks ended up using centralized services instead of standalone wallets. These centralized services are now as regulated as any other financial service providers, killing the disruptive potential of cryptocurrencies and many of it’s advantages.

Backups and crypto addresses need to be removed and the user experience needs to be as simple as possible. The risk of holding crypto-currency by yourself needs to be minimized by automation.


Imagine a future where you can store any amount of crypto currency without using any centralized service, without backups or cold storage, and without crypto addresses. Imagine that if your phone is lost or stolen it doesn’t matter, because it only contains a tiny part of your wealth. Imagine you have in your smartphone a petty cash wallet that is topped up automatically every time it’s balance is close to zero. Imagine that your wealth is at a multisig vault managed automatically by a network of devices you own and control, automatically, without you doing anything at all.

Imagine that in the event of a lost or stolen phone, you use any of the other devices of your private network and eject the stolen one. The network then reconfigures itself with one less device, revoking its signature and moving the petty cash balance to a new account. Only if the thief is an expert and opens your phone before you eject it from the private network you would lose the balance of the petty cash wallet. The real money is on the vault managed by a Decentralized Bank.

In order to be super secure, your private network must have the following properties:

  1. Have as many devices as you want (up to the limit of IoP multi-sig technology, which should be around 10 times the one of bitcoin).
  2. The devices could be anywhere on earth.
  3. Nobody should be able to know which devices are part of your private network.

With these conditions met, a Decentralized Bank would be extremely secure and anyone could store any amount of cryptocurrency there. A typical private network would have your mobile phones, tablets, laptops, pcs, some family members pcs at remote locations, etc.

Being your own bank is Satoshi’s vision. We just refined it based on experience and made it our own. To get to that future first we need to finish the Internet of People.

The Internet of People Project

Essentially, the Internet of People is a set of technologies: IoP Token, Graphchain, Redtooth and dAPIs.

The following is a very high level roadmap of this project:

  1. IoP Token— Cryptocurrency with Democratic Mining: It is a cryptocurrency modeled on bitcoin with some changes to prevent centralization of mining and embedded governance functionality with Contribution Contracts. For decentralized banks we need to expand the amount of possible signatures of multisig transactions, to better adapt it to the “be your own bank” use case.
  2. Graphchain— Open Social Graph: This technology creates an open social graph, which allows people to find each other on the internet without ever going through a company’s or any other type of entity’s servers. This is needed to connect your own devices across the world in a secure way.
  3. Redtooth— Bluetooth over the Internet: This technology enables the pairing of devices over the internet. It allows mobile apps to securely exchange data directly between any two devices. This data for instance could be crypto addresses, enabling crypto-wallets not to show these addresses to end users anymore, and automatically get addresses from counter parties on the wallet’s contact list.
  4. dAPIs — Decentralized APIs: This technology enables any device to run different services anyone connected over Redtooth with that device can consume. These services can be about anything: chat, online dating, taxis, you name it.

Once the previous technologies are developed, anyone can create Person to Person Apps both for commercial and social purposes. That means that a whole ecosystem can blossom. All of it enabled by the Internet of People. But the Internet of People also enables other projects that are not simple end user apps.

Decentralized Bank Project Roadmap

This project needs the Internet of People to be ready before it can be implemented. If we add to the Internet of People a few more layers of infrastructure then we would reach Satoshi’s dream of allowing people to be their own bank:

  1. DPN — Decentralized Private Network: This technology enables the setup of a private network of devices owned either by a single user or a trusted group of people over Redtooth and dAPIs. This private network can later be used by apps for multiple purposes, for example to securely synchronize data among devices, or to run a Decentralized Bank.
  2. Decentralized Bank: This technology creates a multisig vault over a DPN and allows you to store any amount of IoPs on it as secure as any centralized crypto bank or centralized wallet. This is not an APP that someone can open and access the funds. It is an autonomous software that does it’s job automatically. That is the reason why it can run for instance on the devices of many family members, and no one can see or withdraw the funds of individual members except the owners of those funds. It replaces the concept of cold storage by a massive multisig vault which can require up to dozens of devices to sign transactions if needed.
  3. Petty Cash Crypto Wallet: This could end up being the most user friendly crypto wallet possible. Its main features include:
  4. Decentralized Bank Ready: The wallet can get connected to a Decentralized Bank and be automatically topped up when low on funds. It can easily withdraw large funds from the Decentralized Bank upon user request. It can also deposit funds on the Decentralized Bank when needed.
  5. Bitcoin Supported: Besides IoP, the wallet can also store bitcoin since it is the single most accepted cryptocurrency, with a large network of merchants, large liquidity and easily exchanged for fiat currencies all over the globe. Note that bitcoins can only be stored at the petty cash wallet, not at the Decentralized Bank.
  6. IoP to Bitcoin Exchange: The wallet must allow end users to easily convert IoP to Bitcoin and vice versa. Funds at the Decentralized Bank are stored in IoPs, and can be converted to Bitcoin on demand before spending from the wallet.
  7. No Crypto Addresses: For transactions between IoP users, payments are sent to wallet contacts (aliases and pictures), no addresses. End users will never see these long strange strings of characters again.


A growing community is helping make Satoshi’s dream come true by building the Internet of People. We are spread all over the world. The graphchain has already been released in beta, and it is currently waiting for the first apps to be developed. The community is working on Redtooth now, and slowly moving towards dAPIs.

The IoP tokens are on the market at You can buy some if you want to support the Decentralized Bank project and make it happen. If we allow regular people to easily and securely store any amount of cryptocurrency at their own Decentralized Bank, IoP tokens might become a very good early investment opportunity.

If the concept of decentralized banks and be your own bank resonates with you, come and join us. Help make Satoshi’s dream come to life. Get into our slack, meet the community, join #decentralized-bank channel and tell us how you can help.

Thanks to Amadeo Charlé, Guillermo Villanueva, Rich McDowell for their contributions to this piece.

If you are interested in learning more about this technology, this list might help you:

  1. “Fermat, the Internet of People and the Person to Person Economy.”The Internet of People architecture dissected.

  2. Introducing the Graphchain.The cryptographically secured data structure we use to store profiles and their relationships.

  3. Introducing RedtoothLike Bluetooth with global range.

  4. The Profile Server.The cornerstone software of the Internet of people.

  5. The Location Based Network.The geo-located network that help other services to be geo-localized.

  6. Person to Person Apps.Apps that run over Redtooth.

  7. The Web of PeopleAn open map of everyone and how we are related.

  8. Fermat Distributed Governance ModelThe way we govern ourselves.

  9. Fermat’s InceptionHow the Fermat project was born.

  10. IoP MiningHow to enter into the world of mining IoP Tokens.

The Internet of People is being built by the Fermat Project. If you like what you are reading, check out our online community on Slack.

A bit about me: I am a systems architect who started his career designing and building banking systems. Later I turned into an entrepreneur. Three years ago I learned about bitcoin and decided I would use the underlying technology to fix the biggest problem we have as humans: “unlimited concentration of power”.