1. What is Tibado?
Tibado is digital cash. It’s just like physical cash – note and coins – except the cash is expressed in software, rather than as metal coins or paper and plastic banknotes.
2. So is Tibado a crypto-currency then, like Bitcoin?
No - Tibado digital cash will be denominated in fiat money – dollars, pounds, yen, euros, rupees, renminbi etc. The manufacture and distribution of Tibado value mimics the way physical money works almost exactly. That means that your pocket will hold digital cash that has exactly the same value as its physical cash equivalent.
3. How does Tibado work?
There’s just one key concept in Tibado – the idea of digital coins.
Each currency within the world of Tibado digital coins will be technically completely separate, with its own coins and security solution, just like in physical money.
For each currency, Tibado digital coins are manufactured and issued into the economy in exchange for ‘sight deposits’ (bank account money), just as happens with notes and coins. So Tibado digital coins are backed 100% by bank account money, just like notes and coins in circulation are typically backed by bank account money in accounts at the relevant reserve bank.
Once issued, Tibado coins can be swapped, split, merged, or retired (SSMR) through the ‘Originator’, or issuer, of the coins.
When a coin is issued, a copy of it is placed on the central ‘Live Coin Database’ (LCD) for that currency. A second copy is sent out to the coin holder. The first time any copy of this coin is presented back to the LCD for any SSMR transaction, the coin is removed from the LCD. The new coin(s), if any, that arise from the SSMR action are then placed on the LCD and copies sent out to the transaction requester.
So, taking GBP as an example, if you’ve got a ten pound coin and want to send someone three pounds, you would split your ten pound coin into a seven pound coin - which you would keep - and a three pound coin, which you would send.
Tibado coins are issued as barcodes in the .png file format, which is an image file. This is really convenient, because it means you can send them using virtually any messaging platform that accepts images, including social media messaging platforms, WhatsApp, email etc. You could also print out the image and send it inside a greetings card!
Of course, you can make any number of copies of an image file, so to help coin holders to keep their value safe, Tibado has a second form in which a coin can be held and this is called a pocket.
A pocket is a software wrapper around the coin that provides for any desired form of conditional access to be applied to gain access to the coin and which enables SSMR transactions to be undertaken simply and conveniently.
For example, the action of placing a coin ‘In’ to a pocket is actually a Merge transaction which leads to both the original pocket coin and the coin to be added being removed from the LCD and a new coin, for the combined amount, being placed on the LCD with a copy sent back to the pocket.
Similarly, taking a coin ‘Out’ of a pocket is a Split transaction.
We have created a demo currency, the Tibado, using the currency code TIB so that people can play with the system and see how it works.
TIB is just a demo currency, it’s not backed by any bank account deposits and has no value. It’s just here to demonstrate the system – coins in the real service will be in fiat denominated currencies like GBP, USD, EUR, etc.
4. So do you have to manually create a coin every time you make a payment?
No, you don’t. In many cases, the payer will be paying a merchant of some kind, or at least an app that works as follows: on your smartphone/tablet/laptop/whatever, you will be taken to a web page summarising the transaction (there’s plenty of ways that can happen, so exactly how it will happen isn’t central to the point here).
You will then press ‘Pay’ and the software will do the rest! There will still be a coin created with value from your paying pocket and it will still be remitted to the payee and the payee will present it to the system for redemption, it will have to pass the LCD look-up and be credited to the payee’s pocket, but all that can happen under the hood’.
So part of the beauty of Tibado is its flexibility.
It can be as informal as someone sending a coin to someone else in a social media message, or it can look more like a conventional payment where POS software handles most of the hard work!
5. What problem is Tibado solving?
Physical cash is the most successful product in the history of value storage and payments! It brings four core features – ubiquity, anonymity, control and stability of value (most of the time!).
Ubiquity because absolutely anyone, or anything (IoT?) can hold cash, anonymity because the cash isn’t linked to the holder or their bank account (if they have one), control because you can’t spend what you haven’t got and stability of value because the currency is backed by collateral deposits in the banking system.
And the benefits don’t end there – physical cash has no transaction fees and value can be exchanged without the involvement of intermediaries that both get in the way and add cost, time and hassle!
Tibado retains all of these core features but fixes many of the inconveniences of physical cash. Every smartphone potentially becomes a cash dispenser and a travel money holder and a remittance device to send money home. There are around 2.5 million cash dispensers in the world but there are already over 2.5 billion smartphones with around 1.4 billion forecast to be shipped in 2016.
So we see a future in which physical and digital cash work hand in hand, in an increasingly digital world, alongside the other ‘big guns’ of the spontaneous payments world – bankcards and single liquidity pool players like PayPal, M-PESA and ALIPAY.
We’ve set out some Use Cases here, that show why lots of consumers and merchants, lots of the time, will prefer digital cash over the other payment choices available to them.
6. Who is behind Tibado?
Two digital cash heavyweights! Tim Jones co-invented Mondex, a smartcard based digital cash initiative in the 1990s. David Everett was the technical and security architect of Mondex. Tim went on to run the Retail Bank at NatWest in the late 1990s and, more recently, built, launched and grew NEST Pensions for the UK Government. David is a leading payments security expert and more recently designed the technical and security solution for MintChip, a Royal Canadian Mint digital cash initiative.
7. How was Tibado developed?
Ever since we both left Mondex, we’ve been trying to work out the very best way to make digital cash happen. There have been plenty of blind alleys and cul-de-sacs but we finally got there in early 2014. The core idea was to require that both the payer and payee have to be online for any SSMR transaction to happen. That allowed us to design a security solution that uses smartphones, tablets and the Cloud without asking those pieces of technology to do any of the work of protecting our digital cash against counterfeit. That work is done in Hardware Security Modules (HSMs) inside secure data centres Alongside the online approach, the notion of creating coins has allowed us to create a centralised ledger – the LCD – that is fully scalable, within an acceptable transaction time, to the needs of a major currency.
8. What’s the difference between Tibado and Bitcoin?
Probably the best way to describe the differences is to say that, compared with physical cash, Tibado has one important difference, while Bitcoin has three.
Bitcoin is a crypto-currency, not a fiat currency. In a fiat currency, the cash in circulation is backed, or collateralised in the jargon of banking, by money in Bank accounts. There is no equivalent money sitting in bank accounts behind a crypto-currency.
Bitcoin also has a novel ledger. It’s distributed amongst a number of different people and it’s called a blockchain.
Each Tibado currency has its own single, centralised ledger called the LCD. This enables Tibado’s coin SSMR transactions to happen in a matter of a few seconds and at a very, very low cost.
Bitcoin and Tibado do, though, share one important feature - both Bitcoin and Tibado are digital, whereas physical cash, obviously, is not!
9. What’s the difference between Tibado and things like Snapcash, Apple Pay and Pingit?
Apple Pay, Snapcash and Pingit each do a slightly different job from each other and a different job again from digital cash. The job they’re doing is making it much easier to send money from one bank account to another. Tibado is cash in digital form and will sit alongside interbank transfers. We’ll have to see whether and how Tibado gets integrated into things like Apple Pay.
10. Where did the name Tibado come from?
We thought you might wonder! The ‘Ti’ is from Tim, the ‘ba’ is from the first two letters of David’s middle name – Barrington – and the ‘do’ is a diminution of ‘dough’ an English slang word for money. So Tibado is money from Tim and Dave! Tim thought it up, which is probably why it isn’t Batido . . .
11. What’s going to happen next?
Tim, David and the Tibado team have spent the last year refining exactly how the system will work in practice. They now believe the time is right for Tibado to launch and the first currency to be issued will be pounds sterling, or GBP. This will happen soon!
The launch will be low key – on purpose! We believe the right way forward is ‘Crawl, Walk, Run’ and so the first GBP service will get us started and help us understand how to grow and embed digital cash as a new, significant component of the spontaneous payments market.
12. What’s the proposed corporate structure for the Tibado ecosystem?
Tim and David have set up a private UK company, wholly owned by them, called Tibado Limited. Tibado Limited holds and owns the core Intellectual Property (IP) in Tibado. This includes a series of patent applications and our system symbol, which is the seven-sided coin motif.
Tibado Limited expects to licence its IP to parties who will then bring their implementations to market. The licences are non-exclusive and allow the licensee to implement the IP as they see fit.
Tibado Originators – one per implementation and licensed by Tibado Limited – will ‘mint’, issue and redeem bulk Tibado value for their implementation. They will be responsible for that implementation's technology and security, including all coins and LCD transaction processing. The Originator creates all the implementation specific business rules.
Tim and David have also set up Tibado GBP Limited as the first Tibado IP licensee and Originator, in order to introduce the live GBP service.
Not all implementations of the IP will look exactly the same - it will be up to each licensee to organise their implementation as they wish.
13. Where will we first see Tibado make an impact?
Great question and one we will push straight back to you – where would it help make your life easier?
We’ve got our ideas and we’ve written some of them up here. We expect all kinds of uses to emerge as people grab Tibado and use it to make things work better.
14. Why is there a 14th question in this set?
Call me superstitious if you like, but thirteen questions – come on!