No need to be sorry, verbose responses are good and it's not like we have a character cap on nostr ;)

'Be your own bank'

For this kitty it means the ability to run a bitcoin node which can act as the treasury, LN to facilitate inflow and outflows, a mechanism to 'mint' and 'melt' cryptographic ecash which represent any denomination desired. In a way you are right that it seems in design similar to 'traditional banking' but with a lot more freedom for both user and bank creator. For example I wamt to use cashu to create time banks and event-volunteering systems, it does not *have* to be based on Bitcoin and that is how early ecash systems were. Bitcoin fixes ecash, as we can create real banks wirh real assets in their treasury. IMHO the current Proof of Liabilities mechanism calle cooked up is better then a KPMG bank audit.

So not only better banks, without fractional reserve banking and more user privacy, but also a greater pluralism of banks which are natively connected via LN, settling accounts and making payments between themselves and any other LN enabled system. Banks can also be more community driven (coops, credit unions, micro lending) and use ecash mints to keep a ledger of internal transactions which can be settled on LN (maybe in future onchain too). Fedimint is trying something similar using a federated signing and community social recovery but that is a whole different thing that uses ecash in only a small part of the system.

re: custodial

So let us say you were to interact with my mint, a mint I operate and that you opt-in to using, yes you are risking loss of funds (rug pull) and must accept that inherent trust assumption. That is where I place 'custodial' in context of ecash mints. The mint operator(s) are custodian of your access to the mint logic to mint/melt your ecash, but they are not custodian of your seed or privkey. In all implementations of cashu I have seen there is a bip39 compliant seed for recovery. Users of a mint can at any time request to 'melt' their ecash and be sent the equivalent satoshis via lightning (as long as it is not rugging). There is more freedom of entry & exit, even just to 'pass through' ecash mints, but you can not avoid the trust assumption. I would love to see a NUT implementation of some form an 'escape hatch' for users with a mint that has gone offline (rug or not), something akin to a bip39 recovery of funds but that is still in development and potentially impossible in current design of 'keep the mint stupid'.

If instead you had a mint, and I had a mint, well then we are not getting any benefit of ecash as our direct interactions would be via LN. The same if we just operated our respective nodes and opened a channel or relayed a payment. What if instead I sent satoshis to one mint, got ecash from it, used that ecash to pay a LN invoice from a different mint, getting new ecash from this new mint and then exited to satoshis in a new LN wallet? might be a feature.

ecash is exciting, because of Bitcoin and LN, but not something we should onboard 8 billion humans onto next week. It is something within the tool box of Bitcoiners that are interested in communities, localised economies, ethical banking, privacy and scaling afficionados.

If you want to consider it banking 3.0, I won't hold you against it but I think ecash has potential for a lot more than just that. Such as payment as identity systems or micropayments for machine to machine services, zaps on nostr and who knows what else gets cooked up in the R&D kitchen of an open sourced protocol.

*meow*