Nostr Web Client

# How ecash is minted

To use Cashu, a user Alice first needs to acquire ecash tokens. For that, Alice's wallet has to do two things: First, Alice asks the mint for a Lightning invoice and pays it using any other Bitcoin Lightning wallet. Second, when the invoice is paid, Alice generates a secret x and blinds it (i.e. encrypts it) and sends it to the mint. The mint then signs this blinded secret which we call a blind signature C'. The mint then sends the blind signature back to Alice and her wallet unblinds (i.e. decrypts) it to obtain a signature C on the secret x which the mint has both never seen. The tuple (x, C) is an ecash token and can be sent around to other users as a form of untraceable money.

[extracted from the Cashu PoL scheme document]

AJ Nobody ⚡🏴 2y ago

That's the most accessible description I've heard yet.

Which is helpful because I've been sleeping on it.

Don't feel obligated to answer, but it leaves me asking why it needs a token at all, and how is it transferred between users.

Sounds like a lightning peg out.

I have homework to do. You don't have to spoon-feed me. But I'm more awake, paying more attention now. 🙏

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Discussion

<old>cypherhoodlum 2y ago

I don't think it's a token like you mean. If I'm not mistaken the "token" is essentially a secret string. The "token" gets transferred when Alice reveals the secret string to Bob. Then Bob can use the secret string to redeem sats from the mint.

<old>cypherhoodlum 2y ago

I would guess the root idea comes from the hawala system. If you understand hawala then you might understand ecash as well.

<old>cypherhoodlum 2y ago

Lyn Alden explains it in her book "Broken Money".