Jack Dorsey’s TBD Presents Whitepaper For Decentralized Bitcoin Exchange

tbDEX is the initial product of TBD’s Bitcoin-focused business. A decentralized exchange that they deem “A Liquidity Protocol” in the recently released whitepaper. Anybody can access the Bitcoin network from anywhere with an Internet connection. But the Fiat world that we live in today is not. Participation in the bank system is a requirement that leaves many people vulnerable and without a job. “We believe that the economy should be inclusive. We need to build on-ramps to this future where everyone can access and participate in the economy,” says TBD in This is the announcement post about tbDEX.

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A subsidiary of Jack Dorsey’s Square, they created TBD “with the sole goal of making it easy to create non-custodial, permissionless, and decentralized financial services” for Bitcoin. They now have a plan. 

What Is TBD ‘s Value Proposition?

The tbDEX aims “to build bridges between the fiat and cryptocurrency worlds,” that much is clear. Bitcoin will not succeed if we live in an outdated Fiat world. We need to find new ways of interacting with the world that are simpler and more affordable. “There are serious challenges to realizing this vision. Fiat rails are regulated, and no interface with either the traditional monetary system or “real world” can be completely trustless.” 

What solution is TBD proposing? Participants will be able to transact and interact with one another through the tbDEX You might also like BisqThese and other similar projects. However, TBD will also let users “mutually and voluntarily rely on trusted third-parties to vouch for the counterparty.” In This whitepaper contains all the information.They believe that the network will include vv. 

“PFIs can be, but are not limited to, fintech companies, regional banks, large institutional banks, or other financial institutions; PFIs have access to fiat payment systems and the ability to facilitate fiat payments in exchange for tokenized cryptocurrency assets or vice versa. In theory, a PFI could accept or produce cash or checks as a mechanism for effectuating fiat settlement.”

Financial institutions will have access to the tbDEX for AML and KYC procedures.

“The protocol will also carry the required regulatory-clearing information required by PFIs to conduct their AML and KYC checks before they provision liquidity to the wallet owner. However, the necessary information may vary based on the jurisdiction.”

Wait a minute… a decentralized exchange that requires KYC? Why would that be necessary? Well, the protocol doesn’t require KYC procedures, but some institutions might. The good news is, participants don’t have to deal with those institutions if they don’t want to. Participants can simply interact with one another and develop trust by using other methods. 

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The Price of Anonymity

It’s here that it becomes interesting. The whitepaper says:

“The tbDEX protocol facilitates decentralized networks of exchange between assets by providing a framework for establishing social trust, utilizing decentralized identity (DID) and verifiable credentials (VCs) to establish the provenance of identity in the real world.”

It’s important to notice that “the protocol itself neither collects nor records any personally identifiable information.” However, if a participant wants anonymity it’s his or her responsibility to optimize for it. Again, please refer to the whitepaper. 

“Our goal is not to maintain anonymity of transactions at all costs. Nor is it to undermine an individual’s ability to optimize for anonymity. Anonymous transactions to protect financial privacy via the tbDEX network are allowed. A PFI could, in principle, require no VCs, but such transactions would represent a high degree of risk to the counterparties.” 

It costs money to assume this risk. It’s as simple as that. This is what the announcement page says.

“Transaction costs are ultimately driven by risk. Transaction costs should always be disclosed at their lowest level. Transaction costs that are kept anonymously high will be more expensive than those with maximum transparency. This approach to price discovery allows the marketplace to find the right balance.”  

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Please send us your suggestions if you have any

Whitepaper represents a rough sketch of the tbDEX that will be.

“This initial draft of the whitepaper is meant to establish a conceptual understanding of the high-level design of the proposed tbDEX protocol. The whitepaper is not meant to be finalized. It represents a proposed design for public comment.”

Contact us if you have suggestions Tweet: TBDYou can also send them Pull request for GitHub.

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