To better understand the reasons why we decided to develop the Kroin system, we would like to explain in a simple way, how does the creation of new currency work, and ESPECIALLY who runs such a system.
Assumption:Up to now, the only way to inject money into the economy was through central and commercial banks or private facilities at two different levels: Central Bank emits money to Commercial Banks and these ones give money to private individuals or companies through loans. To better understand this mechanism, we have to describe in detail what is the Fractional Reserve and how it works.
Fractional Reserve. The Fractional Reserve is a banking system in which only a fraction of bank deposits are by law backed by actual cash-on-hand and are available for withdrawal.
Example: if the reserve is 2%, the bank must keep 2 euros out of 100 euros of deposits available for liquid assets or readily convertible into cash. Only the remaining 98 euros can be loaned .
In actual fact, since "it's the loan which creates the deposit", the commercial bank loans immediately € 100 without having any kind of coverage when making a loan. Then, the bank must allocate €100 in the reserves at Central Bank as a coverage of the deposit which have been created out of nothing.
The 97% of the currency in circulation is created electronically by commercial banks and in the form of debt, only the remaining 3% is made up of iron coins as well as paper money.
THE CREATION OF MONEY BY BANKS IS EXCLUSIVELY A DEBT ISSUANCE INTO THE REAL ECONOMY OF A COUNTRY. CURRENCY = DEBT.
UNTIL TODAY THERE WAS NO POSSIBILITY OF GETTING A CURRENCY OR AN ASSET WITHOUT ANY BANKING INTERMEDIATION, THERE WASN'T ANYTHING BEING A REAL ALTERNATIVE TO THE CURRENT EXCHANGE SYSTEM , PAYMENT SYSTEM AND FINANCIAL INTERMEDIATION, ANYTHING WHICH WASN'T IMPLICITLY BASED ON A DEBT-CREDIT RELATIONSHIP WHEN ISSUING A CURRENCY.
NOW THIS POSSIBILITY DOES EXIST AND IS CALLED KROIN. The Kroin technological system Kroin is the digital asset within a technology system which aims to modernize, streamline, make financial transactions easier and less expensive by creating a web based & Mobile oriented alternative to the economic, financial and payment system which is currently in use.
The distribution of kroins is managed by a proprietary algorithm. The user interface architecture is represented by a software plugin categorizing, ensuring total privacy to the user, internet browsing and the time devoted thereto, creating and distributing kroins according to the ranking rules of the algorithm. All user's credentials and activities will be collected on the dynamic website where the user can access his WALLET.
The number of Kroins per user is regulated by a set of rules within the proprietary algorithm. The global number of kroins and the limit for their creation and distribution are two of the rules set in the algorithm.
The number of the downloads of the plugin and the contextual number of Kroins, exploitable and convertible fiat money on exchanges, as well as the number of transactions and payments will help to create the value of the economy [Kroin Economy] which will start, grow up and develop on Kroin basis. Such an economy will take as starting point the number of downloads and the usability of the product kroin itself assigned within the network.
The technological system with its own algorithm will distribute Kroins to any single user forming the network taking into account the limit parameters. The system will be equipped with a transaction verification Protocol distributed and rewarded in kroins.
The company which owns both the technology and the algorithm of creation/distribution of kroins will assign a percentage of kroins to itself in a completely automatic, mathematical and descending way, on the basis of the downloads of the plugin.
Generation of inflation:
The development of the kroin economic system could create a inflationary situation on the items purchased/ exchanged with Kroins. To moderate the approach to inflation, a set of rules has been fixed within the algorithm parameterizing the allocation of Kroins to users at an average price calculated on the major exchanges and on the volume of purchases of items and services on the network.
Kroins will represent an accessible value to make purchases and payments of real items on the web but also for traditional shopping. Kroins can be exchanged among people and companies, institutions, governmental structures, institutional and supranational bodies. Kroins can be converted into fiat money directly from web interface of the Kroin platform or into the dedicated exchanges and marketplaces in the web.
The Kroin system creates-distributes kroins totally free of charge for the user.
The concept of "Mobile Mining" is introduced for the first time since now it is possible to be awarded with Kroins also from smartphones throughout a geo messaging system placed on suitable geo-POI (Point of Interest) activating in the proximity of the end user mobile device.
Messages after being read will increment the balance of the user's wallet. The allocation of these messages, how they will be confirmed and their compensation in kroins will be object of a marketing strategy put in place by the company which owns the kroin technological structure.
Kroin wants to be a valid, economic, efficient and democratic web based & mobile oriented alternative to the current monetary creation by the Central Banks which are private structures with the right of issuing and control currency.
The technological structure collocates the web user as the main character of the kroin generation, which aims to have functionality and usability typical of a payment system within an economic system which the network has been developing for years and which is in constant growth in parallel with traditional economy. The final creator-user is then the legal owner of kroins. In the distribution of kroins, any kind of intermediation by third parties has been totally eliminated. The company which owns the technological kroin structure only offers the control and management of the economic activity arising from the use of the plugin.
The main macroeconomic feature of the Kroin architecture is to be a system of exchange based on credit.
We are working hard on Kroin and we should be out in the Q1 2015. In the meantime, if you need more info, if you have any questions or suggestions or if you simply want to cheer us, please feel free to contact us directly!
Stay tuned with Kroin, stay tuned with user revolution
www.kroin.net
Topic: Why was the project Kroin born (Read 1001 times)