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Tbh I actually disagree with my argument here. I don't believe ecash is custodial; I believe it's a shitcoin akin to the dollar being backed by BTC. The issuer can determine how much they back the token or make any rules for how they'll give out Bitcoin against it. There's also nothing that ties your original deposit to the ecash you receive. It has no tie to Bitcoin anymore than something like liquid.

I actually made this argument in an unsent opinion letter to the Kentucky Department of Financial Institutions when we were planning to launch a Fedimint. I believe that when someone gives you money that they're actually performing an economic transaction of buying a totally different asset. The asset has no ties to Bitcoin and as long as the mint doesn't make claims to be backing or custodying then they shouldn't be regulated as such.

I don't think this is necessary a bad thing as long as it's an understood element. I think there's a lot of value to mints in our current base layer situation. The tech could still allow scaling for a wide range of new functions that aren't possible/feasible on base BTC. That being said I look forward to more advancement that doesn't necessitate us living in an ecash world.

ShiShi21m 9mo ago

Okay now we're on the same page.

Further on the topic of custodianship differences;

Can't I redeem my cashu tokens with another mint?

It seems like also being able to choose a mint or run your own mint is a major key difference between classical custodianship in Bitcoin land.

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ShiShi21m 9mo ago

Peep this disclaimer,

Patrick 9mo ago

You can't redeem on another mint directly. You have to redeem on the first mint and then it forwards a lightning payment to the next mint that then issues them to you on it. If the first mint rugs you then your mint/next mint wouldn't credit you. This disclaimer is excellent as far as trust goes though.

ShiShi21m 9mo ago

Yes that part is clear to me, but you can swap mints if you feel like it - I think this is a major difference to traditional custodial options and why I prefer if we don't conflate the word with invariably different things.

1. A custodial exchange/wallet when you're banked by a single entity.

2. A protocol that has custody tradeoffs that can be chosen based on voluntary market forces.

Patrick 9mo ago

Both Cashu mints and custodial exchange wallets are backed/banked by a single entity. I can slightly see the point of part two though because the protocol could be easier to swap from due to the mint not having as much information to limit redemption. They could still limit redemption by other methods like where the withdrawal is set to go. Similarly you can usually move via lightning based on very similar voluntary market forces if you realize the custodian isn't reliable.