Nostr Web Client

Can someone sell me on why running an ecash mint is better than a vanilla custodial lightning service?

- Each ecash transaction must go through the mint to change hands, so the server can see everything and strongly correlate your payments anyway.

- You have to backup and store your coins or they are forever lost. The mint can backup your state, but that further strengthens the above.

- You have to use an ecash wallet instead of just a vanilla lightning wallet. A custodial wallet can have zero state, while an ecash wallet has to manage a lot of state. An ecash mint also has to bridge lightning payments if other users want to pay in lightning.

The plus side I guess is that the mint doesn't have to worry about strict accounting, while a custodial lightning server does. And there is some privacy benefits, but it's a complex subject and far from anonymous.

Please help me understand the use-case for ecash. I don't care about politics or the regulatory bogeyman, I just want to throw up a custodial wallet service that does its job with minimal friction. I want to have great user experience and ease of deployment (for others to fork my service).

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Discussion

hodlbod 11mo ago

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calle 11mo ago

Thank you hodlbodl

Big Barry Bitcoin 11mo ago

1. They can correlate tokens and what they pay for, but not you. It's like tying payments to bank notes and not the bank account it came from. They have no idea when you got the token you are using to spend, who you are, or even how you got it.

2. Backups are smart. You get 12 words and from that we can deterministically derive a bunch of token ids but these ids are effectively random to anyone else but you who has the key to understand it is a pattern. My point is that they don't know which backups are for you or for someone else so it doesn't tie your identity or your wallet together. This one I need to read a bit more into to be 100% sure.

3. Ecash mints have to support lightning otherwise they're not really ecash mints (well I'm thinking cashu specifically). If you want any privacy, you can't just expect someone else to do everything for you. There is state, but it's not that much, I have had to restore a minibits wallet and although the UX could be better, it didn't require much from me other than 12 words.

4. It is not far from anonymous. It is actually almost perfect privacy TM.

cmd 11mo ago

> It is not far from anonymous. It is actually almost perfect privacy TM

so is tor, if we agree to ignore network traffic analysis

Big Barry Bitcoin 11mo ago

But tell me what type of money can you send p2p over tor other than ecash?

cmd 11mo ago

bitcoin and lightning both support tor

I'm not trying to make this about ecash versus lightning. I'm trying to figure out if its worth running ecash on top of a custodial lightning service.

Big Barry Bitcoin 11mo ago

Bitcoin leaves a trace on the blockchain.

Lightning reveals the recipients node to the sender.

Whether you use TOR or not.

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Each ecash is a unique never before ever seen file. No traces anywhere. Not even the mint has seen it.

As a SENDER, you could keep yourself completely anonymous and the recipient can still accept payment by taking the received ecash to the mint. The mint has no idea where the ecash came from.

A sender could leave ecash to find in a treasure hunt. As a RECIPIENT, you could find ecash anywhere and claim it. The sender would have no idea who claimed it, you dont reveal any node ids or anything, and the mint knows nothing about you either if you use TOR/VPN.

These are the benefits. With a normal custodian, you have an account. Whether they have PII or not, they know of a user with a specific balance, they know about each incoming payment: the amount, the time, the memo, and they know of each outgoing payment: the destination, the amount, the memo, the time, and your user id.

If you don't see the benefits, I give up.

cmd 11mo ago

Okay but for this to be practical, I also have to store a backup of their wallet. So the user will still have an account that I have to manage, just in a roundabout way where it's obfuscated and encrypted. Am I wrong on that?

calle 11mo ago

- The mint can't correlate your payments. Check out how blind signatures work.

- Users store a seed phrase which can be used to recover the state, mints do not back up wallet states (would defeat the whole privacy)

- Yes

calle 11mo ago

Check out one of the client libraries, it becomes a lot clearer when you try to build a wallet. It's fairly easy.

cmd 11mo ago

this doesn't really answer anything. where is the state stored? a single server managing all exchanges can't correlate payments? what if most users only send/receive sats from outside the mint?

yes I know how blind signatures work. I don't like sidestepping the traffic correlation issue. even harbor wallet recognizes this.

is it just the privacy and accounting? are there other reasons to use ecash? how seamless is the lightning-ecash convert? or swapping ecash between mints?