Silent Bitcoin (or SBC) is a digital voucher currency 100% backed by bitcoins. This means that 1.0 SBC equals 1.0 BTC. When a user spends BTC to a wallet hash controlled by SilentVault, they receive in exchange a voucher (a cryptographically signed XML object) for the same amount in SBC. Thereafter the SBC voucher value circulates privately off-chain between SilentVault wallets, until a holder redeems their SBC voucher for BTC. At that point the SBC value is decirculated, and a BTC spend is made from SilentVault'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.)
Please read the User Agreement governing the use of Silent Bitcoin.
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 BTC spend to purchase a SBC voucher does require 6 confirmations before the SBC 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 BTC 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 SBC value between SilentVault wallets than to perform "naked spends" between BTC wallets on the blockchain. (Though naturally it is also more expensive, privacy being worth something.)
Exchanges in and out of SBC from/to BTC are performed via the "Exchanges" tab in the SilentVault wallet, by buying or selling SBC vouchers, respectively. These sales and repurchases are carried out with the exchange itself — meaning SilentVault is an agent for the Issuer of SBC. SBC 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 (SilentVault 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 SilentVault. You are your wallet keys, period.
The fees currently charged by SilentVault are as follows:
- Purchase SBC with BTC: 0.0% (free), minimum quantity 0.01 BTC
- Redeem SBC for BTC: 0.1%, minimum quantity 0.02 BTC
- Make SBC voucher spend: 0.0015 BTC
- Receive SBC voucher spend: 0.0006 BTC (first one is 0.0002)
- Escrow exchange: 0.5% of amount, minimum quantity 0.01 BTC
NB: Pricing for BTC relative to other assets is determined using the 24-hour weighted average price of BTC in USD across multiple Bitcoin exchanges, as calculated by BitcoinCharts and reported at this URL. The 24h weighted average is used because of the high volatility of BTC and the often wide spreads between exchanges. Prices are sampled roughly every 16 minutes. (Other assets such as gold and fiat currencies are updated more frequently, every 2-3 minutes.)