Discussion on Fedimint \ stacker news ~bitcoin

71 sats \ 16 comments \ @anon1 4 Jun 2023 bitcoin

I think Fedimint is an awesome project and a game changer for bitcoin.

It will allow anyone to get access to a lightning wallet with 0 friction but still provide a custody setup that is much better than any custodian lightning wallets that exists today.

At the same time, it provides amazing privacy for it users which is better than any other privacy options we have in Bitcoin today.

I also like how it sort of pushes all of the lightning node functionality to another layer so that the federation members themselves do not have to worry about maintaining a lightning node.

I am also interested in possible Fedimint modules that can be built. The obvious one I see is a federation scoped asset exchange. Basically allow users to mint assets for a fee and trade the asset among members of the federation. These assets could represent shares in a company or anything and could also have really good privacy.

A possible hurdle I see to Fedimint's adoption is regulatory capture of the federation.

I would love to hear some other opinions!

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10 sats \ 1 reply \ @_b_o_n_e_s_ 4 Jun 2023

part of the value prop of bitcoin is fixed 21M and easily being able to audit supply

you can't easily audit the supply in a mint

potentially, like exchanges, your balance in a mint could be made up of bitcoin IOUs. this is why some people are treating Fedi with some level of scepticism

0 sats \ 0 replies \ @anon1 OP 5 Jun 2023

Fedimint is no doubt a custodial wallet. I think it is a much better custodial wallet than the traditional account with an exchange or with an app like Wallet of Satoshi because you have to trust k of n of the federation don't collude against you instead of just a single custodian.

Many people across the world use custodial lightning because it is simply easier and cheaper than non-custodial lightning wallets. Giving those people a better option is what makes me excited about it.

I think using a federation for your day to day transactions and then holding your savings in non-custodial layer 1 will be a great option for many people.

10 sats \ 6 replies \ @DarthCoin 4 Jun 2023

Bitcoin is designed to be used by intelligent people. Bitcoin is a natural selection. People that will not adapt and learn how to use it, will just... die in their own ignorance. Will be a pariah of the Bitcoin society.

Now come Fedimint. Is just a mitigation for all these people that do not want to learn how to use properly Bitcoin. It is a last chance offering them to use Bitcoin.

For me, personally Fedimint is not a "game changer" and I would not use it. Is not necessary for me. Would I test it? For sure yes, I like to know all kind of apps using Bitcoin, otherwise will lack of knowledge about Bitcoin. But personally I am not so excited about this Fedimint. Is not for me.

0 sats \ 5 replies \ @anon1 OP 5 Jun 2023

I agree the best way to use lightning is to run your own node but its also pretty easy to see why a lot of people choose to use custodial lightning. Giving those people a better option is very exciting.

Now I want to ask you a question @DarthCoin. How do you see Bitcoin scaling to the world?

10 sats \ 4 replies \ @DarthCoin 5 Jun 2023

https://darthcoin.substack.com/p/how-bitcoin-will-save-the-world

0 sats \ 3 replies \ @anon1 OP 5 Jun 2023

Interesting article. I agree that people have to become more self-sovereign to see why Bitcoin matters. Your point about how Bitcoin is something that will happen among the people and the governments of the world will have nothing to do with it is right on.

I meant my question from a technical background. How do you see 1 billion+ people using Bitcoin?

10 sats \ 2 replies \ @DarthCoin 5 Jun 2023

Trusted "Uncle Jim" + local communities = LN banks for people that don't know how to do all this stuff. I run one of these LN banks myself, for a local community with merchants. Is possible if you really want to do it. https://darthcoin.substack.com/p/bitcoin-private-banks-over-lightning https://github.com/Darth-Coin/Poncho-OBW-testing

See my substack for 70+ guides more.

0 sats \ 1 reply \ @anon1 OP 5 Jun 2023

I like your node setup! Very robust. I need to add a UPS to my node.

Fedimint is trying to be a better "Uncle Jim" setup by eliminating single points of trust.

Imagine if in your community there were 5 people (including you) that were trusted community members (Uncle Jims) and you all created a 4 of 5 Federation. With this setup, the community would have to trust that 4 of the federation don't collude together to steal funds which I think is less likely than just 1 person deciding to stealing funds.

And since the LN gateway is separated from the core federation, you could use your already established lightning node to route payments for the federation.

For people using self-custodial lightning, Fedimint changes nothing, but for people using custodial lightning it provides a better trust model than what is currently available.

0 sats \ 0 replies \ @DarthCoin 5 Jun 2023

Yes, for sure, not all communities will be able to do such a setup I did. Totally agree that some parts of the world would need some other solutions.

10 sats \ 6 replies \ @Lumor 4 Jun 2023

The blockchain and lightning protocols can't scale to serve the world population without some form of semi-custodial nodes. Fedi is promising.

One thing that would be great to fix is preventing the introduction of fractional reserves, where not all ecash tokens within the mint ecosystem are actually backed by bitcoin.

21 sats \ 2 replies \ @DarthCoin 4 Jun 2023

introduction of fractional reserves,

0 sats \ 0 replies \ @Lumor 5 Jun 2023

See #188525

0 sats \ 0 replies \ @Lumor 4 Jun 2023

Indeed 😔

0 sats \ 2 replies \ @anon1 OP 5 Jun 2023

I don't believe the fractional reserve possibility of Fedimint can be fixed. When using Fedimint, you will always have to trust that k of n of the federation don't collude together to debase you or outright steal all the funds of the Federation.

50 sats \ 1 reply \ @Lumor 5 Jun 2023

The federation should be able to publish a "proof of reserves" at some fixed time interval akin to exchanges. A merkle tree containing all the tokens might be very large, not sure if there's some private way of grouping them.. And then they would also publish signed UTXOs adding up to the same amount. Maybe have some "proof of funds" procedure like Hoseki if that calms people down. UTXOs could be moved/consolidated at the same interval to ensure that they aren't being "lent out" to someone else.

People's wallets could then verify their tokens exist in the merkle tree and that the UTXOs are correctly signed.

But yes, the guardians could go for a rug eventually. This just makes it harder to do up until that point of corruption.

0 sats \ 0 replies \ @anon1 OP 6 Jun 2023

Very interesting!