pull down to refresh

Why Fedimintfedimint.org/docs/GettingStarted/Why-Fedimint
4640 sats \ 7 comments \ @AR0w 7 Jan ecash freebie
Ideally bitcoiners should run their own nodes and custody their own funds.
Many people find the technical challenges of running their own nodes and holding their own funds through recovery phrase management prohibitively difficult, and opt into trusting a third party custodian like exchanges or custodial wallets.
These users sacrifice their privacy and security in favor of speed and convenience. This represents a systemic risk to the bitcoin network as large quantities of bitcoin are aggregated into single custodians.
Fedimint aims to address this by distributing custodianship across millions of communities, making it simple for them to bank themselves. These community focused 'banks' are known as Fedimint Federations.
From the article
write
preview
related posts
242 sats \ 1 reply \ @freetx 7 Jan
Who are these community members? How does one vet them?
Seems like a successful and trusted fedimint would need to be comprised of publicly known actors? At that point how is that materially different than Liquid?
reply
10 sats \ 0 replies \ @BlueSlime 7 Jan
Liquid is auditable, fedimint is scalable.
reply
0 sats \ 4 replies \ @mango 8 Jan
How can users in different federations transact? Does this involve an on-chain tx?
can't find this in the docs.. pls send link if i missed.
reply
10 sats \ 0 replies \ @colourorange 8 Jan
federations can interact with each other through the lightning network via lightning gateways, no on-chain tx required: fedimint_a -> lightning_gateway_a -> lightning_network -> lightning_gateway_b -> fedimint_b
in more detail here: https://fedimint.org/docs/GettingStarted/How-FM-Transactions-Work#transactions-from-fedimint-to-other-fedimints
reply
0 sats \ 2 replies \ @mango 8 Jan
ok, i found this
  1. Why would a LN gateway provider accept "fm-sats"? What guarantees them this can be redeemed for sats. Trust the federation?
  2. Can a federation be the LN G-provider themselves using the pegged-in sats thus acting as a custodial LN wallet?
reply
0 sats \ 0 replies \ @TonyGiorgio 8 Jan
A couple thoughts:
Yes, a gateway does have to trust the federation that they can swap ecash for sats later. However, users and federation members do not have to trust the gateway.
Therefore, a federation member providing gateway services is totally plasible IMO. It would not turn the relationship into a custodian (still federated). Running a successful lightning node does take more skill than running a federation, so I would imagine not every federation would be able to provide this. I can imagine that federations might eventually pay a deposit to a gateway for this.
reply
0 sats \ 0 replies \ @mango 8 Jan
@colourorange
reply