Digital Notes

What Is A Digital Note?

July 31, 2018


What Is A Digital Note?

If you have only ever seen smart contracts used for ICOs, you are probably wondering “what else can smart contracts do then apart from take my money?”

That’s a question we asked ourselves some time ago. The answer is, a lot of things, but mostly, they can escrow payments for very long periods of time and refund such payments at different rates (prices) to which they are received. In the world of cryptocurrencies, the ability of smart contracts to take payments, store them, and refund them to the holders of tokens those smart contracts issue is nothing short of revolutionary.

Digital notes are not security tokens or securities – they are currencies! Essentially, they are Blockchain tokens that exchange back for the unit of value that once purchased them at the end of a pre-specified cycle that is put in the code and return to that cycle after the re-exchange has taken place. They are not regulated investments and in no way are they affiliated with or even remotely like securitised financial products. They are just the smartest cryptocurrencies there are on the planet today, that’s all!

Because of the way in which smart contracts can be used to refund the unit of purchase used to make a token, suddenly when this is brought into perspective a notion of actual financial value of the cryptocurrency being used to make payment is automatically conferred by the utility of the payment and refund. For the unit of currency – for example, one Ether – with which you pay for a token (note) that is used to subsequently refund the same payment, oftentimes a lot more of that original payment than a buyer first committed, means that actual financial value can be calculated into the product.

From the MNY White Paper:

Given that Blockchain is now one decade into its evolution as a financial technology (albeit it even if it is not yet one adopted by the major part of society), it becomes only logical to ask – what are the characteristics, the functions and what is the utility of digital notes?


A digital note ideally ought to answer a question commonly asked since the gold standard was abolished by President Nixon in 1972 and one which you hear commonly asked on Blockchain today. That question is: what is the real value property of a unit of currency?


Given that notes began life as promissory paper, we can easily simulate such a scenario without necessarily securitising the product by enabling a re-exchange of the token for its original unit of purchase as a result of the smart contract’s ability to escrow sums of payment for extended period of time. For example, if someone pays 1 ETH for a token we create on the Ethereum network, we can extract a fee for the manufacturing process and innovation of the token and subsequently we can allow the remaining portion of the ETH to be held securely in the token’s smart contract until a certain date in the future when it can be re-exchanged for the token that it was first used to purchase.


If we alter the algorithm between issuance of the tokens and re-exchange of the tokens with the ETH in the smart contract, for instance by progressively issuing less tokens per ETH entered into the smart contract at point of issuance and then equalising all re-exchanges of tokens and underlying cryptocurrency in the smart contract on a fixed like-for-like basis, the result is one whereby a leverage effect in terms of the price of the initial unit of digital currency used to pay for it is created by the holder commonly getting back more ETH than they submitted initially. It was on this basis that we first created Futereum in January 2018. Thus, Futereum can be considered the world’s first digital note.


At heart, a digital note is nothing more than a proxy digital coin, or a proxy digital token, being the unit of token money value that is employed in temporarily representing the digital coins in the token’s smart contract prior to re-exchange. Because digital notes represent actual cryptocurrencies that they are in some sense categorically themselves, as opposed to an alternate form of value such as when a paper note represented a pound of silver, the effect is one whereby digital notes are able to be employed in leveraging and artificially magnifying potential investment returns for digital currency investors across a broad range of digital assets, and employing a whole series of highly-imaginative cost-of-sale formulas that ultimately affect the price of the notes themselves. In this way we are the first to have identified how to engineer not just utility but also value on the Blockchain.


To summarise, a digital coin is a unit of cryptocurrency attached to the creation of a specific Blockchain. A digital note is a smart contract utility-enhanced token where the token is used by way of being ascribed a proxy value for the underlying value that is stored inside the smart contract for which the token is ultimately re-exchanged.

In essence then, a digital note is a token that is pre-programmed in the smart contract code to re-exchange for an identical or greater amount of the original unit of value used to make the note’s purchase.

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