BoLT: Building on Local Trust


You can hear about BoLT in recent podcast episode of All About Blockchain.

A transparent, reputation-based market in exchangeable credit allows people to support businesses in their communities at low cost and with minimal risk. We propose BoLT, a platform that increases availability of capital, especially to small and traditionally disadvantaged borrowers. During the unprecedented economic slow-down in the wake of Covid-19, many organizations and individuals want to support threatened local enterprises. BoLT is a bottom-up system that lets them invest in businesses they care about while purchasing products and services they want.

Utilizing a transparent ledger, BoLT overcomes several long-standing problems of established lending markets, such as asymmetric information, high transaction costs, imperfect competition, and systemic bias. By providing both interest and liquidity It goes beyond existing crowdfunding sites (like Kickstarter, GoFundMe, Patreon, or Indiegogo) and microlending platforms (like Kiva or LendingClub).

To see how BoLT works, suppose Alice's Bakery has a devoted following. Alice offers her customers bolts (which we can think of as digital gift cards), redeemable in six months, that carry 10% annual interest. So if Bob buys $20 worth of Alice's bolts, in six months he'll be able to purchase $21 worth of baked goods. Meanwhile, Alice gets funding for her business.

But the story doesn't end there. Bob can immediately trade his Alice bolts on the BoLT system. If someone else wants his Alice bolts, he can exchange them for bolts issued by other businesses or for currency. Or, if another merchant agrees to accept Alice bolts, he can spend them at, say, Main Street Hardware. And if Main Street Hardware doesn't accept Alice bolts, the BoLT system can search for traders willing to swap MSH-accepted bolts for Alice bolts, executing the three-way transaction on the fly, transparently, without intervention by Bob. Since BoLT makes all transactions publicly visible, traders can see the degree of trust placed in participating businesses. Over time, we expect that overlapping trading circles will extend bolt markets beyond the local communities in which they begin.

Draft Paper

Draft paper on BoLT (under review)

Use Cases

One of the key advantages of the BoLT system is that the underlying protocal is quite flexible. It gives local governments, individual merchants, foundations, and communities to power to create the funding and payment system that suits their needs. It can be used to create an alternative currency increasing spending that stays in the community, a government benefit with defered costs, a gift card and reward system to promote spending, a grant to local businesses, a universal basic income for members of a community, etc.

We outline a few use cases highlighting some of BoLT's protocal in the following pages. (More coming soon.)


The BoLT project is funded in part by grants from: and .