What I don't understand is how the ecash is secured by actual sats.
Is it possible for mint to issue more ecash than it has on hand?
Admittedly, I have not played with ecash at all.
Discussion
Yes, mints can (and will) both issue unbacked ecash, AND RUG ecash they did have
Over time, reputable mints will emerge, and they are incentivized by being able to earn transaction/routing fees.
I can appreciate the speed, privacy and efficiency of ecash, but wouldn't we just be rebuilding the central banking model of fractional reserve banking?
Isn't that the inevitable next step that comes with mints?
No, it's completely different, because eventually any mints who do this will get wiped out and there aren't any bailouts
In an open market without rails, sure. But that's not the legislative environment we're heading towards. Keep in mind that failure was on the table for banks also... Until we started bailouts.
I don't actually see any other way, though. We need custodians and this path is more secure than lnbits, for sure.
The way I understand this, for mints to be interoperable, they also need to be lighting nodes, correct?