1. A Transferable Digital Note or TDN is a value associated with a long, unique, and impossible-to-guess string of characters called TDN signature. The value is a liability of a Guarantor.
2. A Transferable Digital Note has a Status. The Status can be Active, Canceled, or Blocked.
3. A Transferable Digital Note may be secured with a Personal Identification Number (PIN) or a PKI public/private keys pair.
4. A Guarantor is an entity that can legally hold deposits and issue Transferable Digital Notes against them. /li>
5. A Guarantor Partner is an entity that has an account with the Guarantor.
6. The Guarantor may issue TDNs only to the Guarantor's Partners.
7. The operations performed with TDNs are:
   • TDN Initial Issuance
   • TDN Redemption
   • TDN Reissuance
   • TDNs Consolidation
   • TDN Split
   • TDN Validation
   TDN Redemption, TDN Reissuance, TDNs Consolidation, and TDN Split operations can be performed only with TDNs with status Active.
8. The Guarantor releases the value of a Transferable Digital Note to Guarantor Partners and cancels the Transferable Digital Note. This operation is called TDN Redemption.
9. If requested by the Owner of a Transferable Digital Note, the Guarantor cancels the Transferable Digital Note in the owner’s possession and issues to the Owner a new Transferable Digital Note for the same value of the Transferable Digital Note canceled. This operation is called TDN Reissuance.
10. If requested by the Owner of more than one Transferable Digital Note, the Guarantor cancels all Transferable Digital Notes specified in the owner’s request and issues to the Owner one Transferable Digital Note for the total value of the Transferable Digital Notes canceled. This operation is called TDNs Consolidation.
11. If requested by the Owner of a Transferable Digital Note, the Guarantor cancels the Transferable Digital Note in the owner’s possession and issues to the Owner two or more Transferable Digital Notes for a total value of the Transferable Digital Note canceled. This operation is called TDN Split.
12. The Guarantor releases information about a Transferable Digital Note when presented with the Transferable Digital Note signature. If the inquiry originates with a Guarantor Partner or an Authorized Authority, all information may be released, otherwise, only the Value and Status are released. This operation is called TDN Validation.
13. A Transferable Digital Note has an Issue Timestamp and may have a Cancellation and a Blocking Timestamp.
14. The Guarantor keeps a repository of all issued Transferable Digital Notes, their values, status, security information, timestamps, and any other available The Guarantor receives deposits and issues Transferable Digital Notes to the Guarantor Partners. This operation is called Initial TDN Issuance.
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16. The Guarantor may collect and store in the repository information about the entity in the possession of the Transferable Digital Note if available or supplied by the owner.
17. During the transfer of a Transferable Digital Note, the new owner takes possession of the Transferable Digital Note signature from the previous owner. If set, the PIN has to be removed or made available to the new owner before the transfer occurs. If a PKI is set, it must be removed before the transaction or the previous owner must give the private key to the new owner. The new owner may check the validity of the Transferable Digital Note by requesting its Status from the Guarantor. To prevent double-spending by the previous owner, the new owner may request from the Guarantor a TDN Reissuance.
18. An Authorized Investigative Authority may block a Transferable Digital Note during an investigation by setting the status to Blocked. If the TDN is used in a transaction, the transaction initiator will receive a message showing that the TDN is Blocked and instructions on how to contact the Investigative Authority.
19. If the Guarantor decides to pay interest to TDNs TDNSYS be extended with functionality supporting the business rules for increasing the value associated with a TDN by the interest paid.

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