What is an ecash mint?
Discussion
Cashu, linked below, is one implementation of ecash. Fedimint is another, in development.
Someone please correct me if anything below is wrong:
Essentially, a person, or a group using multisig, starts a mint. Others who wish to use ecash send their bitcoin to the mint, and the mint issues them ecash tokens in exchange. The ecash tokens allow for complete privacy, as the mint does not know who you are, what your balance is, or who you’re transacting with. From my understanding the ecash tokens are just files stored on your local device, and can be transacted with anyone willing to accept them. No one is made aware of the transaction except parties involved, because you’re just sending a file. If you want your bitcoin back, you send the tokens back to the mint and the bitcoin equivalent is sent back to you.
That sounds like a business. If the minters are printing tokens and you expect those tokens to increase in value, in order to exchange for bitcoin or anything else, then you are a security. They have laws on the books for securities.
Yeah, that’s why I want to do a write up on laws that may apply. I’ve seen no one talk about legal implications and I think it’s important for those thinking about starting a mint to know what they may be getting themselves into. I didn’t even think of the securities issues, but you’re absolutely correct, thank you for pointing that out.
What if the mint issues more tokens than they really hold (in sats)?
Can I verify it somehow myself?
But is there an expectation that tokens from an ecash mint increase in value? In cashu and fedimint the tokens just represent abstractions of sats that have been deposited in the mint. Their value isn’t expected/intended to move independent of bitcoin.
If they did, maybe the best analog for cashu tokens would be an in-game currency or something like that?
Until they change the howey test, if the asset/token is expected to increase in value and is issued by a central party, group, or individual it is probably a security.
Bitcoin's issuance is determined by miners, randomly, and value is not guaranteed by any central authority, group, or individual. Then you exchange bitcoin for a token that someone says should keep it's value or increase seems like a business to me.
The processes sounds like putting a hat on a hat. Just my 2 bits.