Network Security
All messages are encrypted so that they can't be read or modified by intermediaries.
All messages are addressed to only one node at a time, instead of cascading over the network.
Nodes that broadcast invalid messages or reject valid messages gain negative reputation.
Every few minutes nodes share reputation data with their immediate peers.
The longer a node is connected to the network without losing reputation the greater the weight of it's reputation data.

Coins
Balances of coin are stored in receipts. Receipts cannot be changed, only replaced. Receipts can be replaced in one of three ways:
   Roll - transfer the coin in a receipt to a new receipt
   Split - divide the coin in a receipt between two new receipts
   Merge - combine the coin in two receipts into a new receipt

Every receipt is secured by a public key. To replace a receipt, the owner must publish a message containing his private key, as proof of ownership, and a new public key for the new receipt. New receipts are validated by proof that they replaced previously validated receipts. It is therefore necessary for all users to keep a database of all existing receipts and records of the parent receipts they replaced. Once the child receipts have been replaced, the parent receipts are deleted.

Synchronization
The synchronization of the network is achieved by consensus.
Think of consensus as decentralized mining.
All connected nodes earn a sync bonus for every valid receipt they confirm.
The sync bonus is self-adjusting to maintain an average amount of new coin per hour.
The sync bonus is calculated as:
   total bonus per hour/total receipts per hour = bonus per receipt
   bonus per receipt*receipts per node = bonus per node

Elasticity
There is no limit to the money supply. It's designed to be elastic- to inflate and deflate according to it's level of use.
Just as bonuses facilitate inflation, debits facilitate deflation.
Debits are applied to old receipts, once they reach a certain age.
The debit amount must be nominal rather than proportional so that the oldest receipts are eventually destroyed.
The debit amount is equal to the sync bonus per receipt.

Steps of a Typical Transaction
1. The payer broadcasts a message to split or merge his receipts to create a new receipt for the exact amount to be paid.
2. He then waits a few seconds for a high super-majority of the network to confirm his message.
3. Once confirmed, he sends the private key for the new receipt to the payee.
4. The payee immediately rolls or merges the new receipt to take ownership and prevent double spending.
5. He then waits a few seconds for a high super-majority of the network to confirm his message.