Grassroots Cryptocurrencies: A Foundation for a Grassroots Digital Economy

Grassroots cryptocurrencies are a digital means for turning mutual trust into liquidity. Their coins are units of debt that can be issued digitally by anyone -- people, communities, corporations, banks, municipalities and governments -- and traded by anyone. The purpose of grassroots cryptocurrencies is to provide a foundation for a grassroots digital economy. With grassroots cryptocurrencies, local digital economies can emerge without initial capital or external credit (beyond the financing of smartphones), and gradually merge into one global digital economy. In this paper we introduce the principles that underlie grassroots cryptocurrencies; elaborate economic scenarios derived from these principles; specify the Grassroots Cryptocurrencies protocol formally via multiagent transition systems; provide it with an implementation by a grassroots dissemination protocol; and prove the implementation correct, fault-resilient and grassroots.