Nostr Web Client

I never really got Cashu or Fedimint.

After a long call with Jeremy Hill and Jonathan Wilkins during our catchup call (I invested in their startup), they explained how they were going to be using Cashu for their bitcoin powered VPN network …

I had to ask a lot of questions but I think I finally understand it.

It seems like it is a way to do allow for *infinitely scalable* and *private* transactions of sats.

🤯

Is real?

Am I understanding it properly?

If so, and if it works, how is this not one of the most incredible developments in Bitcoin history!?

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Discussion

₿logging₿itcoin 2y ago

Fedimints look like our best chance at scaling bitcoin, if we can do it while avoiding fractional reserve.

Blocktent 2y ago

History of humanity shows we never evaded fractional reserve banking in the long run at least for the civilisations I know of. Would be interesting. Also Calle spoke to something like a proof of reserves for cashu mints, should be doable with fedimint too then.

₿logging₿itcoin 2y ago

I know, but there's a first time for everything. I haven't hadna chance to listen to the episode, but I tried cashu a few months ago. Calle and Rinjadel were the only other people who knew how to accept it back then.

Blocktent 2y ago

Seems to be freaking easy tbh. I mean even that you can just burn to a lightning invoice and so on is super neat.

₿logging₿itcoin 2y ago

@calle thinks we can solve fractional reserve banking.

I'm optimistic.

https://fountain.fm/clip/p23GQBRLnR5mnVSUIPQm

Blocktent 2y ago

We better join him in doing it ;)

moonsettler 2y ago

maybe. proof of reserves and liabilities adds significant burden to the otherwise sleek protocol. fraud proofs add some more. there is always a tradeoff. but i think it's totally worth it. maybe not for every use case not for very small amounts and services, but for the ones people use as a bank even if just for their monthly spending.

Blocktent 2y ago

Im not sure about the technical implementations of this, if it’s „just“ about moving funds in Intervalls that doesn’t really seem to stress a Lightspeed system much in my view.

moonsettler 2y ago

we got something way better than that. only it's difficult to prove the correctness. it's a strong intuition for now.

moonsettler 2y ago

more like this is the way that does not require permission from everyone. the other ways that require consensus changes just keep on not happening.

that said things are very bullish in #cashu land. some of the things we came up with are absolutely #nuts!

Blocktent 2y ago

Custodial, yes. There are issues, known issues and Calle explained them very well on whatbitcoindid.

Fedimints are somewhat of a federated cashu mint. So there is reduced counterparty risk as the counterparty would be federated. Cashu as I understood is super fast to set up and make your own mint… yes, scalable, yea seems very private in that matter. Very nice!

owenkemeys 2y ago

Cos it’s still custodial, just much less bad type of custodial. You’re not transacting sats, but sats IOUs.

Conceptually just like fiat started out, which worked ok until the rugpulls.

That said, the people working on bitcoin ecash are smart, realistic, know its weaknesses and are working to mitigate them.

I think Calle had an idea for provable reserves, which would eliminate the creeping fractional reserve risk.

moonsettler 2y ago

there is custodial that is:

- kyc/aml ridden unsafe

- permissioned account system

- orwellian surveillance nightmare

- debased via fractional reserve

- gatekept and metered walled garden

and there is custodial ecash:

- private

- either fungible or programmable

- accountless and individually permissionless

- auditable supply (fingers crossed)

- globally interconnected via ln

both can rug you tho. but it's pretty clear which one is the winner.

Mags 2y ago

Yes!

This is a similar but very different L3 implementation for privacy on lightning (plus you can do 🤯 things like offline tx): https://asats.io/

Being worked on by a Canadian too

moonsettler 2y ago

i think you can send all ecash offline or out of band, the receiver just can't verify the tokens are not already spent while offline.

moonsettler 2y ago

btw there is already a solution figured out for issues like this:

you could create a programmable voucher, that has time locked refund conditions.

you can ask the mint to sign this voucher in exchange for redeemed fungible ecash. basically the recipient can give you something like a paynym or a nostr pub (public profile info), and you can lock in the funds while online.

then he can accept and verify this mint signed voucher when you meet offline that is say good for 2 days, after which you can claw it back if the deal doesn't work out. he can claim it at his leisure later that day.

it's not exactly intended for this fringe use case, but could work.

Brad Mills 2y ago

I thought this was using Cashu

RamenCoffee 2y ago

you give up soveirgnty for anonymity. It's not all roses. It's good but you can't just park you $ in there. meaning you have to move in and out of it.

the state is going to paint any funds going through those as criminal.