Silent Litecoin (or SLC) is a digital voucher currency 100% backed by litecoins. This means that 1.0 SLC equals 1.0 LTC. When a user spends LTC to a wallet hash controlled by Silent-Vault, they receive in exchange a voucher (a cryptographically signed XML object) for the same amount in SLC. Thereafter the SLC voucher value circulates privately off-chain between Silent-Vault wallets, until a holder redeems their SLC voucher for LTC. At that point the SLC value is decirculated, and a LTC spend is made from Silent-Vault's reserve to the address hash designated by the user who surrendered the voucher. (Which is probably, but doesn't have to be, the user's own.)
The Voucher-Safe network operates differently from the Bitcoin network, in several important respects:
- A Voucher Publisher (or VP) signs vouchers and clears voucher payments to prevent double-spending. While each VP is centralized, the protocol supports multiple Publishers. This means that payments clear in seconds, with no need to wait for transaction confirmations. (Note however that a LTC spend to purchase a SLC voucher does require 6 confirmations before the SLC voucher will be issued.)
- Input vouchers are always destroyed in every transaction, and replaced with output vouchers bearing fresh unique serial numbers. This means that unlike with the blockchain, no public transaction history exists, balances are private, and no "taint" can attach to coins. (Taint violates fungibility, a fundamental characteristic of sound money.) This represents a vast privacy improvement over regular LTC spends, and a lesser improvement even over "coin laundry" services.
- A payee must pick up their voucher payment, within the 1-7 days designated by the payer. If the payee does not do so, the payment expires and becomes recoverable by the payer (indefinitely). This makes it impossible to lose value by spending it to a "dead wallet."
- Receipts are generated by the payee, not by the Publisher. This prevents the clearing VP from needing to record transaction history, or knowing anything about the private message context accompanying the payment. The VP also never sees a user IP address.
In short, it is much faster, more convenient, more private, and generally much safer to exchange SLC value between Silent-Vault wallets than to perform "naked spends" between LTC wallets on the blockchain. (Though naturally it is also more expensive, privacy being worth something.)
Exchanges in and out of SLC from/to LTC are performed via the "Exchanges" tab in the Silent-Vault wallet, by buying or selling SLC vouchers, respectively. These sales and repurchases are carried out with the exchange itself — meaning Silent-Vault is an agent for the Issuer of SLC. SLC vouchers can also be traded to other users, in exchange for vouchers representing other asset types (e.g. USD or EUR, silver or gold, etc.) Users can specify the asset types they will accept, and offer discounts or demand premiums. The SVX (Silent-Vault Exchange) acts as a third-party escrow agent, allowing all trades to be fully anonymous and secure. You cannot know with whom you are trading, and no KYC of any kind is performable by Silent-Vault. You are your wallet keys, period.
The fees charged by Silent-Vault are as follows:
- Purchase SLC with LTC: 0.0% (free), minimum quantity 0.5 LTC
- Redeem SLC for LTC: 0.0% (free), minimum quantity 1.0 LTC
- Make SLC voucher spend: 0.075 LTC
- Receive SLC voucher spend: 0.03 LTC (first one is 0.01)
- Escrow exchange: 1.0% of amount, minimum quantity 0.5 LTC
NB: Pricing for LTC relative to other assets is determined using the posted average price of LTC in USD on the btc-e exchange, as reported at this URL. Prices are sampled roughly every 16 minutes. (Prices of other assets such as gold and fiat currencies are sampled more often, every 2-3 minutes.)