Chaumian ecash is the patricians choice.... \ stacker news ~bitcoin

Chaumian ecash is the patricians choice....

3836 sats \ 41 comments \ @freetx 17 Jan bitcoin

Quick Background

For those that don't know, Chaumian eCash was created by David Chaum in the 80s - the implementation was known as DigiCash and it even saw use at a US bank from 1995 - 1998.

It introduces near perfect privacy (blinded amounts + transmission).

Bitcoin

eCash is being used as an add-on to bitcoin (not in competition), specifically there are a couple of implementations happening now on LN (ie. cashu, nutstash.app, etc) and on-chain (Fedimints, etc).

Features

Blinded Amounts
Can be used both on-chain and on LN
NOT UTXO based - but Bearer based (no online requirement, transport agnostic)
eCash is "minted" and transactions between users of same mint are instant and no-fee
eCash can transfer between mints via LN (or other ways)
Can hold other "assets" (ie. USDT, tokens, etc)
Scales bitcoin

But how exactly does this "scale" bitcoin?

Its a nuanced discussion, but most of us now understand that scaling BTC to entire world on-chain will never happen (mathematically impossible - not to mention fee issues). Therefore we need some form of "Custodians" to get 6B people both on the network and transacting. Even though LN by itself helps tremendously, there is no way to open that many channels on-chain, so custodians of some sort will be needed....the problem custodians bring is that they can/will be pressured by state actors to censor transactions. Custodians can and will be tempted to spy on users and use captured data for their advantage at expense of user.

eCash solves this since it becomes (a) impossible for Custodian to know what is being transferred AND (b) because its bearer-based, its impossible for Custodian to know even know assets are trading hands (ie. you could literally download "ecash.json" file and send via WhatsApp and its like sending physical cash over chat network).

How can I get started

Quickest way right now, is to spin up an instance of LN wallet at https://legend.lnbits.com and enable the "Cashu" extension. Then you can create a mint, issue some assets and play around.

You can use the https://wallet.nutstash.app/ web wallet to transfer assets to your lnbits wallet and see how it works. There are also wallets available for iOS / Android (https://enuts.cash)

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475 sats \ 8 replies \ @supertestnet 17 Jan

most of us now understand that scaling BTC to entire world on-chain will never happen (mathematically impossible - not to mention fee issues).

It is not mathematically impossible and there are solutions to fee issues

Therefore we need some form of "Custodians" to get 6B people both on the network and transacting

We do not

there is no way to open that many channels on-chain, so custodians of some sort will be needed

It's a huge leap to say "lightning can't do it therefore custodians are the only way forward" -- there are non-custodial solutions in this world other than lightning you know

Custodians can and will be tempted to spy on users and use captured data for their advantage at expense of user. ... eCash solves this

It does not. Shotgun kyc is a very popular model of introducing privacy violations and ecash does not fix it. An ecash mint can wait til it has a lot of users, then pull the rug on them: "No more transfers or withdrawals without kyc. Go to this site to submit your documents and restore access to your money."

its like sending physical cash over chat network

It's like sending a phyical check over chat network

The person who receives it cannot redeem it without going through the chokepoint, the place where KYC can be applied

And if you choose not to immediately redeem it but just resign it and pass it along to the next fool, each subsequent holder is at the mercy of hoping a prior holder doesn't redeem it first

The chokepoint (i.e. the server) is the person who prevents doublespends, they are the person trusted by every user, and that is exactly the problem the bitcoin whitepaper was written to solve

Ecash is the problem. Bitcoin is the solution.

1 sat \ 0 replies \ @jurraca 18 Jan

It's like sending a phyical check over chat network

well put, exactly right.

ecash doesn't have to become a chokepoint though. It may be prohibitively hard to get there, but having internet-native interoperable banks that use bitcoin as a backend will happen. They can either be financially regulated chokepoints, or wildcat banks out there in cyberspace. Mints have to be interoperable (there has to be a mint network) to be useful to their users (be able to redeem cash in many places) and reduce the likelihood of rug.

1 sat \ 3 replies \ @TonyGiorgio 18 Jan

they are the person trusted by every user

You realize ecash can be federated right? It's not a single person.

0 sats \ 2 replies \ @supertestnet 18 Jan

Federations do not reduce trust

A federation is a group, and although I want to say groups are generally less trustworthy than individuals, that's not true either. They are equally unreliable unless you get to know them and assess their trustworthiness the old fashioned way.

It is, however, easier to get to know an individual than it is to get to know a group of individuals, therefore I personally prefer unfederated custodians -- because I can more easily get to know them first and determine their trustworthiness

0 sats \ 1 reply \ @TonyGiorgio 18 Jan

Federations do not reduce trust

This is retarded but to each their own I guess. Best of luck to you, nobody is forcing you to do something you don't want.

0 sats \ 0 replies \ @supertestnet 18 Jan

Best of luck to you, nobody is forcing you to do something you don't want.

Yes, that is one of my favorite things

This is retarded

Why? Saying it is retarded does not make it so. If I am actually wrong about this I would like to do better

0 sats \ 2 replies \ @freetx OP 17 Jan

deleted by author

21 sats \ 1 reply \ @freetx OP 17 Jan

It is not mathematically impossible

7 tps = 220M per year. How to do more?

121 sats \ 0 replies \ @supertestnet 17 Jan

batching

300 sats \ 12 replies \ @orangecrush 17 Jan

Before people yolo into playing with ecash. DYOR. Use tiny amounts. cashu mints are alpha level software. Counterparties are busy devs ant best or unknown at worst. DYOR. The lightning nodes associated with the mints are 100% under mint control and can rug you. Lost >1M sats on a failed redemption from 8333.space mint to a failed channel open on mutiny. Both providers gave me the, “what happened, too bad 🤷”. But god knows the sats are sitting on one of their wallets.

LET ME REITERATE: USE TINY AMOUNTS

0 sats \ 1 reply \ @TonyGiorgio 18 Jan

The lightning nodes associated with the mints are 100% under mint control and can rug you

This is false. The LN gateways in a fedimint are non trusted.

0 sats \ 0 replies \ @orangecrush 18 Jan

The lightning nodes associated with the mints are 100% under mint control and can rug you

This is false. The LN gateways in a fedimint are non trusted.

I was speaking about Cashu mints, but will do my own research on fedimints

0 sats \ 9 replies \ @BlokchainB 17 Jan

Yeah I hate that what happened too bad I’m still out some sats from other apps including Munity

105 sats \ 8 replies \ @orangecrush 17 Jan

A lot of people talk about liquid like it’s a shitcoin plague, but it works, which is a good starting point. Ecash is at least equivalent in its “not real bitcoin”ness to liquid.

5 sats \ 7 replies \ @BlokchainB 18 Jan

Haven’t lost a single sat (yet) testing out liquid applications

50 sats \ 6 replies \ @TonyGiorgio 18 Jan

Other people have.

103 sats \ 5 replies \ @orangecrush 18 Jan

@TonyGiorgio it would be good, for our education as a community of Bitcoiners, for you to provide some reference to these incidents. I know bisq doesn’t play well with jade multisig wallets since the blinding key is inaccessible to the wallet user. But I want to know more.

I imagine your goal at Mutiny ultimately is to enable people to use Bitcoin safely, with an appropriately set expectation of success/failure. If you have something to share about the dangers of liquid, please do so.

0 sats \ 4 replies \ @TonyGiorgio 18 Jan

No dangers per say, though you can ask @petertodd why he experience loss of funds through Liquid.

Just saying that no early wallet is without risk. And to clarify @BlokchainB - In almost all cases, there was not actual loss of funds with mutiny that we were not able to assist with. Although some users consider funds lost if they had an "unexpected" on chain operation (like a force close), and I consider this to be FUD. There's a difference between on chain fees and "funds lost". Chain fees are a cost of doing business on Lightning, as is being self sovereign on chain normally.

100 sats \ 0 replies \ @BlokchainB 18 Jan

I know the difference between lost fees to miners and sats that are “gone” due to software bugs. I stopped using Munity because I’m not 100% certain I recovered everything I put in. I knew the risks and I am okay with the loss. I hope Munity becomes the best wallet on the market. The team was very helpful and responsive to my issue and I commend them for the path they are taking to bring self custody to the masses.

reply on another page

201 sats \ 2 replies \ @petertodd 18 Jan

Hmm? I haven't experienced a loss of funds with Liquid.

I did run into bad UI on AQUA wallet, where it didn't display an error message when it couldn't access the electrum servers it depends on due to a networking problem. But once I fixed that my funds showed up just fine and I was able to subsequently spend them all.

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25 sats \ 0 replies \ @BlokchainB 17 Jan

Yup I’m an eNut nut

82 sats \ 4 replies \ @SqNr65 17 Jan

I'm loving Cashu so far, using Nutstash mainly and I briefly played around with my own mint but I don't recommend doing that since fees to get back to lightning usually means 2 or 3 sats will probably get left behind and I'm not sure how to solve this.

But the fact that I was able to set one up myself in minutes with not much technical knowledge to speak of, and mint my own ecash and send it around and receive it again and turn it back into sats on lightning... Idk, it was mind-blowing to me.

1316 sats \ 1 reply \ @petertodd 17 Jan

There's no reason to have your own mint other than education. Cashu only gets a privacy benefit if multiple people are using the same mint, and furthermore, holding a non-zero balance. If it's just one person, you might as well use a much simpler lightning wallet.

And yes, I use cashu wallets a lot myself for small LN transactions like tipping on nostr. People need to actually use it and hold a balance on mints for everyone else to get a privacy improvement. I'm happy to put ~$100 at risk to contribute to that.

12 sats \ 0 replies \ @SqNr65 17 Jan

Completely agree, I really wanted the education so I went for it, turns out, very achievable for the layman.

Glad I did it, wasn't expecting any privacy improvements or anything like that just tinkering. Lost 3 sats but hey... A good amount of education at the price of 3 sats is a steal

10 sats \ 0 replies \ @freetx OP 17 Jan

Yes, there is great potential here - as it offers to "scale" the fee problem as well as txn scaling...

Pleb signs up for some custodian account (ie. Coinbase, etc) - gets "eCash". Pays 0 fees.
Transacts and does things....eventually as reserve builds up pulls off some via LN to self-custody wallet....pays minimal fee
As LN reserve builds up further, eventually transfers "savings" into onchain self-custody solution....pays high fees but total control

1 sat \ 0 replies \ @SqNr65 17 Jan

Oh I see what you did there hahaha

45 sats \ 1 reply \ @TheWildHustle 17 Jan

I'm really interested to see e-cash and fedi entering the bitcoin design space. It should result in better UI cheaper fee's, a better overall lightning experience.

1 sat \ 0 replies \ @cyberpunk02 17 Jan

yeah me too

2 sats \ 4 replies \ @justin_shocknet 17 Jan

impossible for Custodian to know

There's lots of misunderstanding around this, as with most things privacy.

ECash is only only private when transacted within its own mint. Sending ECash from one mint to another, settled by Lightning, is still a Lightning payment from one custodian to another. The custodian still knows where its going, what amount, and when.

This means that if anonset is small, as it would be in hobbyist nodes, its pretty much useless for privacy.

NGO's, Fedi et al, aren't raising millions for your hobbyist node though.

They're buying their way into the Lightning ecosystem so that it becomes compatible with large banks debt-tokens, and people are falling for it like any other shitcoin technobabble they can pretend to understand and virtue signal over.

0 sats \ 3 replies \ @freetx OP 17 Jan

True and good point of inter-mint transactions...but this is where having very large custodians becomes a feature.

I'm not sure about your view that mints are going to be tiny hobbyist groups.....why wouldn't Coinbase, et al be mints? In fact, in order for "mints" to help scale BTC, they need to be large players otherwise it doesn't really help scaling....

1 sat \ 2 replies \ @justin_shocknet 17 Jan

large custodians becomes a feature

That's a bad thing, and likely a pre-meditated attack on Bitcoin. Large custodians are where trouble starts, appealing to privacy virtue-signalers only serves to keep them relevant for longer.

The banks NEED this to stay relevant on a Bitcoin standard, that's how you know it's bad for you.

I'm not just waxing philosophical either, it's a major privacy LIABILITY over the long term.

Think out a step, even if these large custodians couldn't know exactly who sent what because of ECash, by nature of existing as a large custodian it create a huge insight into overall Lightning flows. Every inbound and outbound to/from other mints/nodes is data to de-anonymize the network at large. Privacy larps using Coinbase for the anonset would be paradoxically hampering the overall privacy of the network by giving their mint tons of data. Mints are a shitcoin panopticon.

A better world through many small custodians and closer relations is what Bitcoin offers.

ECash is the opposite of that, an attack.

Let's also not pretend it's about scaling either, because SQL achieves the same exact thing. That is why I don't see hobbyist running mints, and mint-to-mint payment wallets as being completely mindless offering nothing but superfluous complexity.

0 sats \ 1 reply \ @freetx OP 17 Jan

by nature of existing as a large custodian it create a huge insight into overall Lightning flows. Every inbound and outbound to/from other mints/nodes is data to de-anonymize the network at large.

Good point, but I think we need to ask: "Compared to what"

Is this scenario better then current BTC / LN privacy? (It is)

Mints are a shitcoin panopticon

The mint operators are blind to transfer / amounts. What information do you see they would be gathering?

Let's also not pretend it's about scaling either, because SQL achieves the same exact thing.

Well it is about scaling....how do you see Bitcoin onboarding 1B new users?

0 sats \ 0 replies \ @justin_shocknet 17 Jan

"Compared to what"

Compared to small, local custodians, running economic nodes.

Is this scenario better then current BTC / LN privacy? (It is)

It doesn't address Bitcoin privacy issues because it's not BTC or LN. It is however centralizing, which is bad for privacy in general.

It can be useful as an access token from a service, where the service rendered should be blinded from the actual payment, but it is not in and of itself good for payments.

What information do you see they would be gathering?

The frequency and aggregate of source/destination on the settlement layer (Bitcoin/LN).

onboarding 1B new users?

SQL

22 sats \ 0 replies \ @jurraca 17 Jan

idk if this is the right mental model, but ecash via chaumian mints is just Bitcoin banks. The mint is a central, trusted issuer of bearer cash. The bank has to gain trust and a user base to make money, and the market it interacts with is bitcoin, not the financial markets.

So I think ecash of this variant is one of the better hopes for banks in cyberspace. The scenario would look something like dozens of mints choose to interoperate or not, creating an adhoc bank network for digital cash. Like nostr relays, they'll first be run by enthusiasts and amateurs, for fun. We'll eventually be able to offload all "instant payments" features from lightning to ecash, since paying is just copy paste a token. Mints will become highly sophisticated lightning nodes.

fwiw this sounds awfully close to Nik Bhatia's idea of "layered money". As others have noted, the anonset needs to grow for their to be a crowd to hide in, but I'm rooting for the return of wildcat banking with ecash.

1 sat \ 3 replies \ @kevin 18 Jan

I have a sneaking suspicion fedimint and co. are local maxima. I really do not get why you would use this instead of something like MercuryLayer? In practice it's close to non-custodial and there risk of getting rugged is way smaller.

0 sats \ 2 replies \ @freetx OP 18 Jan

What are comparisons of Mercury vs Liquid?

0 sats \ 1 reply \ @kevin 21 Jan

The way I see it is Liquid is pretty much Fedimint in practice. Mercury is a statechain that is non-custodial and hence way better from that PoV.

0 sats \ 0 replies \ @freetx OP 21 Jan

Well, I think Liquid has one major benefit over fediments: Auditable supply of tokens.

I assume same would be true of Mercury?

0 sats \ 0 replies \ @GregAsks 18 Jan

IMO ecash is much better solution than liquid or other shitcoin.