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White Paper

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Section 01


Abstract:  Section 1

Introduction - The Problem: Section 2

Introduction - The Solution: Section 3

The Facts: Section 4

How CellBlocks Works: Section 5

The Team: Section 6


The concept of money has evolved over thousands of years, and yet there is still room for improvement. The promise of digital assets—global fluidity, frictionless, democratized—has not been fully realized. Despite the proliferation of projects, billions of dollars of resources and years spent in development, even the leading digital asset, Bitcoin, is still plagued by significant issues that limit its utility.


In this paper, we introduce the CellBlocks™ token, a new digital asset that is fully collateralized one-for-one by USD, issued by the CellBlocks Trust Company. We explain the advantages that CellBlocks brings to financial markets, allowing participants to transact in a trusted and secure, USD-backed and denominated asset with the benefits of blockchain technology and the oversight of financial regulators.


We believe that CellBlocks represents a significant advancement in digital assets, leveraging the infrastructure, oversight and stability of the traditional financial system, while operating at the speed of the Internet.

The Function of Money

Money is defined by three main functions: means of exchange, unit of account and store of value. In part, digital assets were created to improve on these functions, ushering in an era of “programmable money” and smart contracts. However, none have truly succeeded in improving all three functions in a superior way, primarily due to their volatility.

As a means of exchange, digital assets are not commonly used; rather, they are largely used for speculative purposes. Those more specifically designed to operate as a means of exchange have achieved low adoption. There has just not been enough utility, ubiquity or ease of use for widespread usage.

As a unit of value, most digital assets have values that fluctuate far too greatly to be considered an improvement over many standard fiat currencies. Over the past two years, bitcoin has reached a high of $19,720 and a low of $3,593. This constant movement is far more representative of a volatile commodity than a stable currency.

As a store of value, certain digital assets such as Bitcoin may represent significant improvements over fiat currencies, which continually devalue over time. However, their volatility means that they do not function well in this regard, yet, if ever.

Fundamentally, most digital assets do not fulfill the three basic functions of money, with the greatest concern coming from their volatility. (Most have even moved away from their original designations as “cryptocurrencies” to “crypto or digital assets” because they hardly resemble currency.)

There is a class of digital assets, however, designed specifically to solve for volatility, appropriately-named “stable coins.” This is a relatively new category built to hold consistent value over time. 

The Importance of Trust in Monetary Systems


Historical Context

In early times, commerce took many different formats than how we see it today. It started with the barter system, which worked well in small, closed societies where any trade required just two parties to agree on the equivalence of their goods. Money eventually took the form of more portable, less perishable but still intrinsically valuable representations of value, like gold coins. The next step required a bigger leap of faith.

Moving from gold coins to inherently value-less representations of money—such as in paper or simple accounting—required trust in several forms: trust that the system would maintain fair market pricing of goods and services against the currency, and trust in a broad set of market participants to follow a new set of operating principles. No longer could one simply make a deal that looks fair in insolation, trading one’s chicken for another’s loaves of bread; the new rules required that beyond the two transacting parties, everyone within this larger society generally agreed on the value of the goods.

When considering the problem of collective trust in a currency system, it becomes clear why successful monetary systems have by necessity been issued by governments. A central authority can have control over the monetary supply and the value of money, ensuring that it is stable enough to have utility for all market participants, and it can also create the legal framework within which citizens operate. When there is a finite, defined and large enough total market (one nation), with a central authority and accountability (the governing body and laws), all market participants (citizens) can safely assume a level of trust in the system and each other. These are the principles that have underpinned money for thousands of years and have become ubiquitous in fiat form across all modern nation states.

Trust and Digital Assets

Trust has been designed in the very logic of how blockchain-based digital assets operate. The code is rules-based and very hard to change. All changes to the blockchain are recorded and confirmed in a decentralized way that is created specifically to democratize access. Rather than using a trusted intermediary to facilitate transactions, the blockchain serves as the trusted, consensus-driven protocol.

Bitcoin took the concept of decentralization the furthest such that there is truly no one central figure overseeing it, and few people claim to even know its progenitor. However, even in this case, the low number of core developers (several dozen with code regular code commits) and mining pools (under 10) demonstrate that this egalitarian ethos remains de facto quite centralized even though de jure it might not be.

Many people are also confounded by digital assets’ lack of physical backing by anything of inherent value or by government fiat. Moreover, the volatility of these assets makes them seem more like investment vehicles than forms of payment.

The controls built into the digital asset ecosystem, however, still pale in comparison to the very rigorous systems that already exist for regulation, oversight, auditing, insurance, etc. in traditional finance. Since these systems are nascent at best for digital assets, traditional assets remain more trusted. 

Section 02

Introduction - The Problem

Abstract:  Section 1

Introduction - The Problem: Section 2

Introduction - The Solution: Section 3

The Facts: Section 4

How CellBlocks Works: Section 5

The Team: Section 6


The CellBlocks Mission

CellBlocks’ mission is to become fully functional within the prison’s financial network, allowing inmates to receive and use this new form of currency without worrying about delays, unexpected fees, inaccuracies or volatility.

This document outlines our plans for a new stable cryptocurrency, and a smart contract platform that together aim to create a new opportunity for responsible financial services innovation.


Problem Statement

Current Financial System for Inmates 

With over two million people housed in U.S. prisons, the financial system inmates use to make purchases has not always worked as designed. Pay systems currently used by penitentiaries and other correctional facilities charge exorbitant fees to both deposit and transfer money to an inmate's personal account. In many cases, by the time the inmate receives the money over half has been taken in fees and any other expenses. Many families go into debt to ensure their incarcerated loved one has what he or she needs, only for a chunk of the money to be taken before the inmate even has access to it. 

Problems with Payment in the U.S. Prison System

When it comes to what is called items of value in prison, inmates have very little protection or recourse if it is stolen by other inmates. In addition, money in inmates' accounts can be easily accessed by anyone who can gain entry into the system. There have been multiple cases of guards or other correctional facility personnel taking money from inmates' "private" accounts (2). Because of the way the financial network is set up in the prison system, an inmate in this situation has little recourse and rarely gets reimbursed for the stolen funds. 

In addition to prison staff having access to the accounts, the courts can also pull money without warning to pay off an inmate's court costs and fees. Inmates who have jobs within the prison have their earnings deposited into their accounts. When combined with money deposited by family members, the total is barely enough to cover necessities, especially when outside entities continue to take a portion whenever they choose. 

The barter system is one way inmates attempt to make do with the funds available to them, by providing services like doing art, tattoos, legal work, etc. (3). Problems with bartering relate to how inmates value items exchanged. Unfair values and possible theft often lead to fighting and other disruptions. Eventually, if fighting is not kept under control, the prison must bring in additional guards to help control the inmate population. This, in turn, costs taxpayers due to the added expense of extra man-hours. 


Lack of Transparency and Accountability

Money systems used in prisons and correctional facilities have very little accountability. The lack of transparency excludes prison officials from seeing how inmates use their money outside the commissary (roman, smokes, mackerel, etc.). This lack of visibility also keeps all parties from becoming aware of discrepancies that may occur when funds are transferred, taken, or stolen by inmates, the courts, or guards. 


Inefficient and Time Consuming

The most commonly heard complaints about existing financial networks are their lack of efficiency and lengthy delays when transferring funds into inmates' accounts. Even when credit and debit cards are used to complete transactions, it can take hours or even days before the inmate has access to the funds. Steps involved in using Green Dot cards are time consuming. Green Dot cards, for example, involve purchasing an actual card at a store. Money is placed on the card and then transferred into the inmate's commissary account. Not only does each transaction (bank deposits / transfers and withdrawals) require a fee, there is also a fee every time the card is "reloaded." 

Many family members put money on an inmate's accounts so they can remain in contact with one another. Hidden fees are associated with deposits and transfers can add up, and before either party realizes it, the amount of money available to the inmate has dwindled considerably. Inefficiency and lack of integrity shown by companies like JPay and Access Correction can cost inmates and their families thousands of dollars over the course of their incarceration (4). 



1.  http://time.com/3446372/criminal-justice-prisoners-profit/

2. http://www.orlandosentinel.com/news/breaking-news/os-jail-guard

3. http://www.wapt.com/article/mississippi-prison-commissaries-could-be-shut

4. https://www.washingtonpost.com/news/monkey-cage/wp/2015/10/26 

Section 03

Introduction - The Solution

Abstract:  Section 1

Introduction - The Problem: Section 2

Introduction - The Solution: Section 3

The Facts: Section 4

How CellBlocks Works: Section 5

The Team: Section 6


We present CellBlocks, the modern-day solution to all the problems associated with inmate transactions. CellBlocks provides a valuable alternative to money systems currently in place in prisons across the country. Instead of allowing outside entities to charge exorbitant and frequently hidden fees, CellBlocks puts control back in the hands of inmates and prison officials. No more third-party money drains to cause stress and frustration or profit from the suffering of others (5). 


Fewer Fees and Lower Costs

With CellBlocks, there are no hidden fees, the cost of using the system is much lower than JPay or Money Gram, and it is faster than anything else available. One of the biggest problems with current systems is that profits go to third-party financial institutions. These entities make millions of dollars each year by charging extremely high fees for every type of transaction, including deposits, transfers, withdrawals, and expenditures (6). There are even hidden fees for things like inactivity or dropping below a minimum specific dollar amount. Why not pass it back to the prison itself? 

Fees associated with CellBlocks are the equivalent to pennies per transaction. This is an affordable solution for families currently struggling to provide inmates with even the barest of necessities. Third-party financial institutions are known to charge extremely high fees for deposits and transfers between families and inmates, as well as inmate to inmate. CellBlocks eliminates high fees and allows transactions to be made quickly and efficiently at a much more affordable rate.

The entire CellBlocks system is automated, meaning fewer fees and no maintenance by prison staff. Because the system is fully automated, it requires no monitoring unless administrations choose to do so. 


Accurate Transaction Records

With the CellBlocks system, every time a token changes hands, it will create a transaction record in the blockchain (public ledger) available to inmates involved and prison authorities. The digital blockchain through which funds move records every type of transaction in real time with no delays or discrepancies. This will give prison officials an inside look at the amount of money moving through their prison at any given time. This level of transparency is beneficial for everyone involved simply because there is a dramatic reduction in accounts being breached by outside sources. 

Inmates will know exactly what they have in their accounts. Although no personal information is required to be shared with other inmates, the ability to transfer money to others in the prison (or other prisons) is left intact. The inmate simply needs to know the wallet ID belonging to the person they want to receive funds. The funds will be sent and a transaction record created for both the expenditure and the deposit. 

Barter systems within prisons have become a major issue. Not only are prices attached to items elevated, stealing is also on the rise. Resulting conflict has become a common cause of increasing altercations within the inmate population. Bartering and its side effects have also made it more difficult for guards to maintain control. 

All types of items are traded in the barter system, ranging from daily necessities like toothpaste and shampoo to extravagant illegal items like cell phones. The value of the item is often based on need and availability, meaning the price can be dramatically inflated. Overpricing items often leads to theft. The use of CellBlocks shifts the value of overpriced tangible items for barter to digital tokens, resulting in less theft and fewer fights. It also helps items maintain a more consistent, digital value and eliminates price gouging on specific items of value.

Inmate Wallet IDs

A normal address looks like a long string of letters and numbers like this: (3u7hgv45gr93jmD4nER382746y7ghF21MM), but we are using vanity addresses to identify inmates like this: 728329SQSPr93jmD4nER382746y7ghF21MM. This represents the inmate's prison ID along with “SQSP” San Quentin State Prison, the facility name followed by a unique string. This will allow the administration to see who is sending what, when, and to whom. 


Giving Control Back to the Inmates

The CellBlocks system puts control of funds back into inmates' hands. Security measures put in place protect the funds and increase transactions' accuracy and integrity, putting an end to withdrawals from outside entities. 

Family members who contribute regularly to their loved ones' accounts won't have to worry how much of the money they send will end up in the bank's pockets. They will purchase tokens and they will transfer directly into the inmate's virtual wallet within seconds. Inmates will be able to determine how much tokens goes back to the courts for their fees and restitution, while at the same time having an accurate record of how much has been paid and when. 

Finding a solution to problems caused by the current money systems used in correctional facilities wasn't difficult. The key was eliminating financial institutions and the control they have over how traditional currency is used. With the introduction of cryptocurrency, it was incredibly simple to create a financial system based on digital tokens. Digital tokens can be traded or saved just like its traditional counterpart, but the digital world provides a much higher degree of accuracy and less risk of financial loss for inmates and their families and these tokens will create a new economy in the prison system.



5. https://consumerist.com/2014/09/30/transferring-funds-to-prisoners-is-big

6. http://time.com/3446372/criminal-justice-prisoners-profit/ 

Section 04

The Facts

Abstract:  Section 1

Introduction - The Problem: Section 2

Introduction - The Solution: Section 3

The Facts: Section 4

How CellBlocks Works: Section 5

The Team: Section 6





CellBlocks, or CLBK, is a token that is backed one-to-one by USD deposits and available through CellBlocks. CLBK is available one-to-one in exchange for USD and redeemable one-to-one for USD. Upon redemption, CellBlocks tokens are immediately removed from the supply; CLBK tokens are only in existence when the corresponding dollars are in custody.

The one thing that sets CellBlocks apart from any other stable coin is CellBlocks does not directly hold the funds in reserves for the inmates.   For example, you have stable coins like Tether who clams they have over 2 billion in the bank accounts set for redemptions, that is a large amount of trust for one coin.  The funds for each inmate will be held by the corresponding states Department of Corrections bank accounts.


This means if someone wants to purchase tokens in the state of Colorado, then the funds would be deposited into a bank account owned by the Colorado Department of Corrections.  By doing it this way, the state is guaranteed to hold 100% of the redemption for each token in their state.


Key Product Features and Benefits


CellBlocks tokens are issued and redeemed by CellBlocks. As a trust, CellBlocks issues CLBK directly with no need for any middlemen. This enables more efficient operations, including shorter redemption windows (CLBK can be redeemed for dollars within one business day) and lower fees.


CLBK can be sent to or received by anyone with an Ethereum wallet. All transactions operate according to the rules of a smart contract on the Ethereum platform following the ERC-20 protocol. Because of this smart contract, transactions eliminate human error and the system operates only as programmed.

CLBK is available to be listed on exchanges around the world. Since it is backed by the dollar, it can be used as a proxy for understanding the value of the dollar as compared to other digital assets.

The CellBlocks exchange, will allow users to cash out of their holdings directly and instantaneously to cash if they choose and will also trade CLBK OTC.


CLBK is available 24/7 to facilitate settlement against any type of asset including crypto, security and asset tokens or for payments. Unlike fiat, which is only available to settle trades during bank business hours, CLBK can move anywhere, anytime.


Built on the Ethereum blockchain, CLBK is a programmable token that can participate in the larger global community of tokens, helping create a global platform for programmable money with stability.



Section 05

How CellBlocks Works?

Abstract:  Section 1

Introduction - The Problem: Section 2

Introduction - The Solution: Section 3

The Facts: Section 4

How CellBlocks Works: Section 5

The Team: Section 6


The anonymous nature of the cryptocurrency world does not reside in CellBlocks within the prison walls. Each digital wallet will be associated with an inmate's prison vanity ID, allowing administrations to oversee each instance of an inmate sending tokens to another. This is something the prison system has never had in the past. This also gives inmates peace of mind by eliminating any influence or control by the government. CellBlocks is decentralized, meaning there is no government control over how it's used. Cryptocurrency cannot be seized nor can it be transferred  out of an inmate's digital wallet without their permission. Because the tokens are digital, it puts the inmate in control. The inmate doesn't have to wait to gain access to their tokens. When someone deposits Tokens in their wallet, the virtual nature of the transaction allows for its immediate availability. As inmates get funds within seconds, they also show up in the public ledger, also visible to the administration in real time. 

Our developers are in the process of establishing an intra-prison token network that would allow inmates to have direct control over their own digital wallets through a kiosk system. At this time, a pilot program is being created for use in a few prisons willing to implement the virtual financial system. 

Inmates would have full and total control over their accounts, allowing them to transfer CellBlocks to other inmates, no matter where they are being incarcerated. Upon the inmate's release or any time the cryptocurrency is no longer needed, it can be exchanged for market value. The inmate or their family members would then be given the cash equivalent in line with the current exchange rate for cryptocurrency to cash. If the inmate doesn't wish to exchange the crypto for cash or send to family, they can transfer to another inmate's wallet, either at their prison or another facility anywhere the currency is in use. 

Because of its functionality, the developers of CellBlocks believe it has the capability of becoming the only digital currency used in the United States' prison system. As a decentralized currency, it provides inmates with an accurate and efficient way to handle their financial affairs. Since the system is a completely virtual network, no actual currency changes hands and inmates can control their digital wallet from almost any electronic device they can access. CellBlocks has the ability, in time, to become the strongest, most widely used financial network within the state and federal prison systems. 

What Fees Are There?

CellBlocks is an Ethereum-based decentralized network, also known as the blockchain. Ether (ETH) is the fuel for that network. When an inmate sends CLBK Tokens, they must pay for the computation. That payment is calculated in gas, and gas is paid in ETH. 

Inmates are paying for the computation, regardless of whether the transaction succeeds or fails. Even if it fails, the miners must validate and execute your transaction (compute), and therefore you must pay for that computation just like you would pay for a successful transaction. 

You can see your TX fee (gas limit * gas price) in ETH and USD when you search for your transaction on etherscan.io. This is not a TX fee the wallet or any other service provider receives. This fee is paid to miners for mining transactions, putting them into blocks, and securing the blockchain. 


Analogy Time! 

You can think of the gas limit like the amount of units of gas for a car. You can think of the gas price as the cost of each unit of gas. 

  • With a car, it's $2.50 (price) per gallon (unit). 

  • With Ethereum, it's 20 GWEI (price) per gas (unit). 

To fill your "tank," it takes: 

  • 10 gallons at $2.50 = $25

  • 21,000 units of gas at 20 GWEI = 0.00042 ETH.


Therefore, the total TX fee will be 0.00042 Ether. 

Sending Tokens will typically take approximately 50,000 to 100,000 gas, so the total TX fee increases to 0.001 to 0.002 ETH or USD pennies per transaction.



CellBlocks Monthly Loyalty Program



50% of all CellBlocks 1% transactions fees that come from the prisons will form the Monthly Loyalty Program. This program is aimed on stimulating users to buy and hold CellBlocks tokens. Loyalty rewards are made in CLBK tokens.

Each user’s loyalty rewards depends only on the amount of tokens he/she is in possession of. The distribution will be on a random day each month.

Members must register for the program.  More details soon to come

Section 06

The Team

Abstract:  Section 1

Introduction - The Problem: Section 2

Introduction - The Solution: Section 3

The Facts: Section 4

How CellBlocks Works: Section 5

The Team: Section 6


Our Team

Jonas Brown

Jonas is the founding pioneer of introducing cryptocurrency technology to the US prison system.  Jonas has a strong back-round in finance and brings years of experience in crypto to the team.

Sukhen Bar


Sukhen is the CTO working on the infrastructure, database management, security and design/coding of the CellBlocks network.

Maria Alfano CPA


Maria is a CPA and forensic accountant currently with Ernst and Young. Maria has years of experience in financial accounting and audits.

Robert Tucker

Prison Communications

Robert is a 5 year veteran in the Florida State Prison System. Robert's mission is to help bring CellBlocks into the State Prisons.

Our Advisors

Peter Borenstein

Attorney​ and Founder Restorative Justice Fund

Peter is a California based attorney who helps incarcerated people protect and manage their assets while in prison. He also helps them recover their property when it has been stolen from them as a result of their long-term incarceration.

Edward Scott Bales

CEO - Justice Solutions of America, Inc.

Mr. Bales is one of the pioneers of the Federal & State Prison Consulting and Advocacy Industry.

David Ramirez

Blockchain and Smart Contract Developer

David is a solidity smart contract developer and computer science teaching assistant at Oregon State University. David has extensive experience in smart contract functionality.

© 2019 CellBlocks Trust Company, LLC All Rights Reserved. 

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