The Trustlines Network brings "people powered money" to users as public, permissionless payments without the need of a credit card, government ID or a bank account. It is a decentralised platform for customizable, interoperable complementary currencies which comes as a mobile payment app.

The network is the brainchild of Ethereum developer Heiko Hees and the team behind Raiden, which is bringing state channel functionality to Ethereum. Speaking at Edcon in Paris, Heiko said that the Trustlines network is based on the original ripple pay idea in which payments can be facilitated through a chain of 'friends of friends'.

"Lending money between trusted friends is no problem, but what about strangers?" he said. "Based on this foundation of technology you can have a chain or path of trust relationships and chain them together in such a way to have payments between participants on the network that don't know each other."

Once credit lines have been established it creates what in the real world would be called IOUs. Looking at the network of trust lines, these can be used to find pathways to make payments between people who are part of trust lines but do not have trust lines between them.

Payment channels are already being built on Ethereum with contracts on the blockchain which know who the senders and receivers are, where tokens can be held in escrow. In the case of state channels, an off-chain tally of transactions is signed with digital signatures and when those signatures are accepted some goods, for instance, can be exchanged up to the value on deposit or in escrow in the smart contract.

Heiko pointed out that building a payment channel system around credit lines between peers is not a new idea: the accepted fractional reserve banking model where you deposit money to a bank means you are creating a credit line to the bank.

"This sort of system is thousands of years old so it's a powerful idea. We see it with hawala systems [a trust-based transaction system]. Of course, a blockchain is better because you get a notary.
"Think about all the unbanked people of the world who have smartphones. It make sense to implement on Ethereum, which is a payments network, and scaling it with the Raiden network and sharding. We are doing this anyway."