The NetCents Coin White Paper Clayton Moore CEO, NetCents Technology Inc. Jean-Marc Bougie CEO, The Hillcore Group October 10, 2017 Table of Contents Introduction 3 Evolution of Cryptocurrency 5 Current Cryptocurrency Shortcomings 7 NetCents Technology Inc. 8 The NetCents Technology Inc. Ecosystem and Our Approach 10 The Technology Behind the NetCents Coin Multichain 12 The NetCents Coin Release Management 15 The NetCents Coin Rollout 17 The NetCents Coin Treasury Reserve Account 19 How it Works 22 A Coin for the Masses 24 Concluding Remarks - The NetCents Coin White Paper of 2 25Introduction The development of the blockchain and cryptocurrencies have been called the most significant technological breakthroughs since the Internet. Bitcoin, the first cryptocurrency, appeared in January 2009 and was the creation of a computer programmer using the pseudonym Satoshi Nakamoto. Since then, cryptocurrencies have been revolutionizing the financial landscape by allowing consumers access to a global payment systemanywhere, anytimewhereby participation is restricted only by access to technology, which completely disintermediates the current financial system. It is all about empowering the consumer. From the perspective of businesses and merchants, cryptocurrencies offer low transaction fees and lower volatility risk resulting from the nearly instantaneous settlement. Yet, with all the strides these technologies and cryptocurrencies have made, there is more that can be done, and in fact, more that should be done. And that’s where we come in. At NetCents Technology Inc., we are unified in the same ambition to empower and provide our users with unlimited freedom of control. NetCents Technology Inc. is a next-generation payment processor, supporting multiple traditional currencies, cryptocurrencies, and innovative payment s, and, now, working with the NetCents Coin Organization NCCO, an independent non-profit organization, we are assisting with the launch of a new digital coin – the NetCents Coin, issued by NCCO. The NetCents Coin allows consumers to make fast and secure transactions that are independent of any one singular authority or a trusted third party, making it a truly decentralized alternative. One of the key innovations that distinguish the NetCents Coin from all other cryptocurrencies is the coin release algorithm which was developed to ensure a stable supply/demand equilibrium for a steady, yet non-speculative, rise in the price of the coin, unlike existing cryptocurrencies. - The NetCents Coin White Paper of 3 25NCCO treasury coins are released over time and sold through approved exchanges around the world. ALL sale proceeds of coins remain within the NCCO in its Treasury Reserve Account, benefiting ALL coin holders. Building this Treasury Reserve Account is key to the NetCents Coin’s long-term credibility and acceptance in the marketplace, making it a mainstream coin and not just an instrument of speculation like other cryptocurrencies in circulation today. The NetCents Coin was engineered with its users in mind, shaping it to become an appealing store of value and currency of choice for transactions around the world. With the introduction of the NetCents Coin, we are changing the game and levelling the playing field. We’re leveraging existing technologies and delivery ecosystems to bring merchants and consumers an innovative alternative. The NetCents Coin will be Widely held and circulated Tradable Backed by a Treasury Reserve Account Operated under a structured coin release to prevent price speculation Highly secure and private Structured with counterfeiting prevention and fraud risk detection, leveraging next-generation algorithms A global coin, with initial releases in Canada and Europe With its high usability and accessibility, the NetCents Coin is positioned to become the leading currency of choice for both consumers and merchants. From low transaction fees, transactions that mitigate chargebacks, and instant trading, the NetCents Coin is poised to make a second disruption in the digital currency space. NetCents Technology Inc. and the NetCents Coin are next-generation technologies for those seeking a true decentralized alternative. - The NetCents Coin White Paper of 4 25Evolution of Cryptocurrency During the 2008 Financial Crisis, the global economy saw the most significant economic downturn since the Great Depression – everyone was affected. A crash that sent the global markets sprawling, nearly a decade later, it still stirs up residual fear for anyone in the financial landscape, with many stakeholders pointing to a genuine problem that our current centralized monetary system is flawed. The creation of Bitcoin was an entirely different departure from fiat currency and a possible solution to a system rife with corruption. Entirely electronic, Bitcoin’s appeal was, and is, that no one person, system, or party can control it. It is an altogether decentralized mode of transacting which does not rely on third parties, outdated technologies, or trust, the latter of which was the primary pain point of conventional currencies after 2008, trust was a high commodity, but difficult to win. Bitcoins, unlike traditional fiat currencies, aren’t printed. They are created on computers all around the world. They leverage software that solves complex mathematical problems. And, unlike fiat currencies, they are generated at a predetermined rate by an open-source computer program, set in motion just after the Financial Crisis of 2008. All of this became achievable with the development of blockchain, the technology that acts as the backbone of Bitcoin. A blockchain is a decentralized and distributed digital ledger that is used to record transactions across many computers so that the records cannot be altered retroactively without the alteration of all subsequent blocks and the collusion of the network. This allows the participants to verify and audit transactions inexpensively. It confirms that each unit of value is transferred only once, solving the long-standing problem of double spending in which any ination online could be copied. By storing data across its network, the blockchain eliminates the risks that come with centrally held data. Its network lacks centralized points of vulnerability that computer hackers could exploit; likewise, it has no central point of failure. Data stored on the blockchain is considered incorruptible. Blockchain not only made it easier to send money to peers, but it also made it more secure, reliable, and entirely democratic, removing pain points for both consumers and businesses. Since its advent, Blockchain has upended conventional currency with the following features - The NetCents Coin White Paper of 5 25 COMPLETELY TRANSPARENT changes to the Blockchain are entirely public and viewable by all parties. IMMUTABILITY a transaction is irreversible once confirmed; no one can interfere, change, or delete a completed transfer thanks to the time and date stamps in an endless chain of codes. LOW COST intermediaries are eliminated, thereby reducing transaction fees and overhead costs. CROSS-BORDER FUNCTIONS money can be sent easily from one side of the world to the other as if they were next door. FAST Interbank transactions can take days. Transfers through blockchain show up almost instantaneously thanks to the transparent nature of the blockchain. STREAMLINED ECOSYSTEM all transactions are added to one single, continuous chain, removing clutter and complications of multiple parties and ledgers. DURABILITY AND LONGEVITY with its decentralized networks, Blockchain has no central point of failure, making it capable of withstanding potential attacks. When you add it all up, blockchain looks and sounds a lot like the gatekeeper to a decentralized payment system, one that would be the saviour of a post-2008 world. As we continued to grow into an increasingly digital world, cryptocurrencies evolved from this innovative technology, a technology that gave us Bitcoin and Ether, both of which gave us seamless transactions and smart contracts. We entered what should have been a utopian payment age, one that made it incredibly efficient to send and receive money. So, what happened - The NetCents Coin White Paper of 6 25Current Cryptocurrency Shortcomings The promise of Bitcoin revolved around the idea of a decentralized financial system, one that didn’t rely on intermediaries or third parties, which, while secure, are often susceptible to human errors, high fees, long wait times, and outdated s. Although Bitcoin served as a better alternative to outdated systems of transacting, over time, it grew susceptible to its own faults. The truth is that Bitcoin, as a digital currency, has many challenges, and not as much potential to disrupt as we once thought. Bitcoin has a limited ability to scale, with technology that can only support up to 300,000 transactions per day. It also consumes a significant amount of energy, with miners attempting nearly 450 thousand trillion solutions per second to validate transactions. There are high transaction costs, mining risks, and a lack of privacy. Anyone with Internet access can connect to the Bitcoin network and conduct peer-to-peer transfers, making it a conduit for illegal transactions. There is also zero underlying asset value to Bitcoin. Its value is entirely based on supply and demand dynamics. With an insufficient supply, Bitcoin’s value has skyrocketed to stratospheric levels. Its price appreciation is entirely artificial; a bubble which could burst at any time. Bitcoin and Ether are both speculative and volatile currencies, that, while disruptive in their technology, are not viable alternatives as a long-term store of value for the population at large. Both coins were, at the onset, issued at very low values, with new coins only issued through the mining process a vital step in maintaining their blockchain. In the event of a market fall, there is nothing to stabilize either coin. With such a flawed market introduction and no treasury reserve to support either of these cryptocurrencies, there is no intrinsic value. But perhaps the most significant demise in both Bitcoin and Ether is that both cryptocurrencies evolved into the very thing they initially sought out to trans a centralized financial network. - The NetCents Coin White Paper of 7 25Bitcoin holdings are incredibly concentrated in the hands of a small number of parties. At the time of this writing , 3.47 of addresses own 195.89 of the Bitcoins and 1 of addresses control more than half of the entire market . This is one of the key factors which has fuelled its 2price with a total supply versus demand imbalance. A fundamental issue of these mainstream cryptocurrencies is the prence of groups, or pools, of miners, concentrated and dominating the new production of coins. Meaning that these cryptocurrencies are just like the currencies they meant to disrupt centralized and vulnerable to market manipulation. On the outside, Bitcoin maintains a reputation of being a rebel with a cause; a digital coin that is upturning the financial industry. But when you look under the hood, it is the same machine that centralized banks currently use. And in our books, that’s problematic. NetCents Technology Inc. The NetCents Coin was created to address all of these significant flaws in modern-day cryptocurrencies. Much of the 2008 Financial Crisis was entrenched in the same flawed structure that is prent in the digital currencies that arose as an answer to that same crisis highly leveraged currencies with little to no real value, all with centralized holdings, and no reserve or supply mechanisms to help support its value. The premise of digital currencies is that they are alternatives to outdated fiat currencies. Fiat currencies are flawed because they are centralized, meaning their value is hoarded and not widely shared. While Bitcoin began as a decentralized coin, it has evolved into a currency where its largest shares are controlled by a small group of parties. October 10, 20171This Chart Reveals the Centralization of Bitcoin Wealth https// - The NetCents Coin White Paper of 8 25This is how we’re differentiating ourselves. While Bitcoin proved itself as a much-needed disrupter in an archaic financial landscape, there is more to be done. We’re bridging the gap between an old world and a new, with a decentralized transaction coin to be used by the masses as a daily transaction currency. A digital currency should be available to everyone. We did not break away from a centralized monetary system only to have it operate under a monopoly. We broke away from it to deliver a true alternative. NetCents Technology Inc.’s goal has always been to offer users and businesses with such an alternative currency, one that eliminates pain points and the high fees consistent with traditional payment processing systems, while also delivering a currency that is widely held. To ensure that a new digital coin would be able to evolve on its own, independent from NetCents Technology Inc., it was determined early on that an independent, non-profit organization should be issuing and governing the new coin for the benefit of all of its stakeholders, hence the creation of NCCO. Within the NetCents ecosystem, it was also determined that an exchange should be set up, once again, independent from NetCents Technology Inc., the NC Exchange. This exchange runs entirely on the blockchain technology, handling all payments and settlements, and tracking distribution metrics. Blockchain, the technology behind Bitcoin, is a digital public ledger of all transactions, one that does not require the need for a central authority or a trusted third party to send and receive money between parties. We utilize blockchain along with our AI 2.0 proprietary algorithms to provide a fast, secure, and real-time record of every transaction. These three organization, although all independent from each other, the core of the NetCents Ecosystem at launch. NetCents Technology Inc. is merely a facilitator for the launch of this new global coin. The coin and the ecosystem will rapidly evolve and bring in third parties as market participants. This includes third party exchanges and other service providers. - The NetCents Coin White Paper of 9 25The NetCents Technology Inc. Ecosystem and Our Approach The NetCents Technology Inc. ecosystem is built on a foundation of empowerment we want end users and our merchants to not only feel secure and confident with the knowledge that they have the choice of how to pay, but also the freedom to do so. Bec