So, digital IOU's?
In case anyone is still confused about nuts or what it means and why we always talk about it (me today haha), here is my know-nothing dummy explanation and why this is a big deal IMO:
Cashu is an ecash protocol(is this correct?) created by nostr:npub12rv5lskctqxxs2c8rf2zlzc7xx3qpvzs3w4etgemauy9thegr43sf485vg
People are calling them nuts because cashews are nuts... get it?
The terminology is irrelevant. They can be called tokens, air, water, chicken teriyaki.. it really doesn't matter! What matter is that this is a Layer 3 payment system that transfers tokens at the speed of light (or so I think). Lightning being layer 2, and bitcoin being layer 1.
The reason why this is a significant development is because now everyone has a cashu address. Thanks to amazing work by the legendary nostr:npub1mhcr4j594hsrnen594d7700n2t03n8gdx83zhxzculk6sh9nhwlq7uc226 , if you go to npub.cash you can see that you already have an address to receive these layer 3 tokens, which just happen to be easily redeemable into lightning. This means that any new person who joins nostr automatically has (custodial) layer 3 payment access, which can swap into layer 2 and into layer 1 and into fiat if need be.
I don't know any of the underlying mechanics of this, I am not a genius like nostr:npub12rv5lskctqxxs2c8rf2zlzc7xx3qpvzs3w4etgemauy9thegr43sf485vg and what I have described could be incorrect, but it sure feels like this is roughly how things work.
Nuts are custodial, meaning a mint is holding your balance and can look up your npub to see if you have some. Once called upon, these nuts can be sent to another nutter (cashu wallet) or directly to a lightning address! This interoperability makes everyone a layer 2 user. All we need is a clever UX toggle / button / terminology to make it really obvious.
IF this were to be turned into a library that devs could include in their client code and "it just works", THEN it could be a game changer! No more directing people on how to get a wallet right as they join. They can experience the magic of bitcoin indirectly via layer 3 > layer 2 transfer all without knowing anything (as long as they can get on nostr).
In practice, this means anyone joining an audio nest, a zapstream, a flare.pub can automatically get paid. Yes, it's just tokens, and yes it's centralized and custodial, BUT, they see the value instantly and are only a click away from digging deeper. It's a STEPPING STONE that makes it significantly easier to get onboarded into the new paradigm.
I have not been this excited since the discovery of nostr itself! If I'm mistaken somehow, or don't understand things correctly, please let me know and forgive my dumbass 🤣 And if this means what I think it means, then let's make magic happen!
Discussion
IOUs, tokens, peanut butter, like I said the terminology doesn't matter.
IOU's mean a return to trusted third parties...🤔
ok, minnaar@getalby.com
Yes, my trust threshold is a couple bucks here on Nostr. Let's talk about real money
Sounds like. Personal problem. What’s your “real money” amount to?
I don't mind IOU/custodial payments under a couple bucks. Any more, and I want the real thing, not an IOU.
The beauty of eCash is that you can choose the level of custodianship quite easily. Use your personal mint, your families mint, your appartment complex mint, your towns mint… depending on the level of trust and convenience. Very similar to Lightning custodians, but better.
Which mint is npub.cash based on, which URL?
Is there a possibility in the future to link it in NWC to compatible clients in order to zap directly to Nostr as well as receive them?
You can already receive and send to nostr. The address is just your npub@npub.cash
I’m not sure which mint, probably nostr:npub1mhcr4j594hsrnen594d7700n2t03n8gdx83zhxzculk6sh9nhwlq7uc226 ‘s testing ground
yes. currently it is connected to minibits.cash. We are working on enabling to pick from any available mints.
The way I see it, I think it might just play out like this:
Lightning as an L3 for LSP infra and some self-hosters.
Fedimint ecash for custody services.
Cashu ecash for self-hosters and potentially with their own smaller communities.
Inherently, while one might ask why use ecash versus standard sats, truth is, ecash has some advantages:
- More private
- Actually zero fees
- Offline (PoC) usage
As a self-custody maximalist, I too wondered about what ecash could bring to the table but the reality is, given the benefits, if you self-custody in standard LN already, you might as well run a mint too.
If you dont't self-custody, you still have the above benefits and with federated mints there are less chances for rugpulls. I believe cashu also have plans on addressing the potential for rugpulls from angles that standard LN is unable to offer due to inherent limitations.