- Zero custody. You give up your bitcoin for a non-binding digital IOU from the mint.
- No ledger. The mint can print as many IOUs as they want and inflate the supply.
- 100% centralized. Only the issuing mint can redeem your IOU, regardless of how many members it has.
- Impossible to audit. The mint can spend your bitcoin in secret and debase your IOU, and you will never know.
I thought we built bitcoin to get away from all this fiat nonsense. What the heck is going on?
p.s reposting here since this was removed from /ecash sub.
The bitcoin whitepaper criticizes ecash on page 2:
Bitcoin is intended as the solution to this problem. Nonetheless, I think the same whitepaper correctly points out that for most transactions, a bank is fine:
To me, one of the great things about bitcoin is that it's an option for everyone failed by banks, including mints. But most people are not failed by them, in fact most people seem to prefer banks (and maybe someday mints). Making the best possible mint/bank software therefore seems like a useful task that can improve the lives of billions. And for those also-imporant billions whom banks don't want to or can't serve, bitcoin is there for them.
Good point. And that's why I wrote this guide about ecash (including your nice presentation video) making a use case scenario where a local merchant could distribute his own ecash mints among his customers, from a local community.
One the one hand, I agree with you.
But Satoshi wasn't satisfied with ecash, and built bitcoin instead.
I refuse to be complacent about ecash and think there's still more that can be done on bitcoin and lightning.
Ecash is an inherently imperfect system due to its trust issues, so I want to build better things on top of bitcoin, and I suspect you agree. But I recommend against letting the perfect become the enemy of the good. I think ecash is good-but-imperfect, and there are circumstances where it is the best option available, at least for now. I will keep working to make better things, but in the meantime, wherever ecash is an imperfect but good solution, I will try to use it and be thankful -- and keep working to make better things.
I think the value proposition here is to encourage more of an actual free market for "banks" or "mints" themselves. ecash is not a trustless solution, but it does reduce the barrier to entry for a group of individuals collaborating to participate in a global economy (a la Fedimint). They've got to run their software, secure their hardware and fund the mint. The value proposition really shines when the participants are locally proximal to each other -- like a neighborhood or local community. If/when the trust breaks down, things can be settled face to face, and over lightning, it should be almost painless to move to a new mint, or migrate funds up the scaling layers ecash -> lightning -> bitcoin if one is feeling insecure about the community or suspecting a bank run. And that's not to mention, the elimination of regulatory barriers to spin up a new financial institution.
Again, it's not a perfect solution, and it has me still with mixed feelings WRT the sovereignty maximalist voice, but it does seem to be an experiment worth tinkering around with. I'm reminded of the supposed origin ethos in the creation of Craigslist, given all the concern about meeting up IRL with "random strangers on the internet" -- that he believed "people were generally good to each other". Perhaps instead of trusting absolutely nobdy, it is a benefit to have easy options to choose who to trust, like family, friends and local community.
I agree, we shouldn't settle.
Very well said
This is a reasonable point of view. I agree with this.
Curious, though: how many years away do you think we are from billions of self-sovereign users of bitcoin?
I don't think it will happen
One reason why is that I think billions of people prefer to use easy things
And I, for one, keep making bitcoin harder and harder to use
I don't foresee any reversal of this trend, though I hope for one
Also, you should make this your superhero catchphrase:
making bitcoin harder to use
You are already somewhat of a legend, this would solidify it.
Is the above then referring to ecash or some other scaling solution that doesn't provide same self-sovereignty guarantees?
How is bitcoin there for them?
I think it is good that the option exists even if the masses dislike it
It is there for them to reject or accept, and I suspect the masses will continue to reject it for the foreseeable future, not due to ignorance, but due to trying it and concluding "this sucks worse than the old thing"
This implies that bitcoin will only be an option for people as long as it isn't adopted by too many.
how does it imply that?
For bitcoin to be self sovereign, you must hold your own keys to a utxo.
If too many new people want bitcoin, getting a utxo will become very difficult, costly, time-consuming.
Presumably, there is some number at which the cost and wait-time to get a transaction confirmed is so high, that it is effectively not an option for most people, possibly even rich people.
I think this means you cannot say it is available to billions unless we are sure that it won't become popular as described above in my comment.
Can't resist adding this turn of phrase:
Bitcoin is only available to billions if it isn't used by billions.
It's better than Wallet of Satoshi.
Bitcoin is digital cash without a third party. But in order for this to be true you need to:
Lightning is bitcoin you can settle almost instantly and send tiny amounts. But in order for this to be true you need to:
And on nostr, everyone uses WoS which is none of the above.
I don't think ecash is bitcoin. But it is a way to build on top of bitcoin that lets us have access to some of bitcoin's awesome properties. It is better than WoS and leaps and bounds better than credit cards and central banking. And many of the projects being built on it are designing for interoperability with bitcoin.
I'm here to see what it can help with.
Yes, this is the simplest explanation of cashu. Is not perfect, but is working. I can even do better coinjoins through ecash than regular onchain coinjoins. I challenge everybody to do the test to trace himself, if it can. It is not possible. Suck this monero and coinjoin losers...
Let’s Go!
You get me with this.
Ecash is like being cucked by a guy wearing a blindfold. He's blindfolded...but you're still being cucked.
But I'm happy you're into that that stuff bro, no judgement
100%
You can at least audit a lightning channel.
We don't have to compare LN with ecash. Are totally different things. Yes, ecash works over LN and depend on LN to "travel" or being redeemed. But ecash will NEVER replace LN. People should stop considering ecash (cashu or fedishit) as "replacement" of LN. That is idiocy. Ecash is simply digital gift cards.
yeah I don't really have anything against ecash. the cryptography is cool and anyone can make a mint.
but it is fiat incarnate and the propaganda to dupe people is already circulating
also the tech is a dead-end for freedom money and a cop-out for dealing with current challenges. I don't like it when good engineers give up on going to the moon and decide to build a tower of babel instead.
Captures my sentiment exactly.
To quote JFK: We do these things because they are hard.
Ecash seems like a band aid at best with possible serious negative ramifications for rug pulls/earning trust. We have enough problems in those areas.
yes that is concerning....
Agreed
Fiat is for the weak. Whether physical or digital. Bitcoin is for the brave, free and sovereign.
Can't change your mind. Truth truth
Yeah, I too fail to see why there's so much hype for it.
I think a lot of folks that oversold lightning are now backpedaling into fiat banking and pretending its a scaling solution
Would you consider bitcoin a failure if there is no way to scale the self-sovereignty guarantees of the base layer to 1 billion users?
I think as long as the game theory holds and Bitcoin replaces fiat as the global reserve currency, then humanity wins.
It may turn out that we need ecash for the last mile of money transmission, but I'm not ready to abandon lightning for fiat mints
Definitely. Hopefully the lightning doom and gloom will blow over. I certainly find it useful.
Anyway, thanks for asking the OP question and starting this whole discussion. Always come away from these with new understandings.
anything centralized and "trust" have proved to fail over time, hands down. This "nice product" is rug ready...lol IMHO
It was removed? It doesn’t appear that ~ecash is moderated
Yeah I'm not sure what happened to the post. It could be a technical issue.
It was downvoted there, with enough downvotes to get it outlawed. It's a global SN feature, the ecash territory is not centrally moderated. Some are.
wow that's stupid. Why an important post is downvoted like that? I think the downvoting feature should be used only onto shitcoiners.
hahaha that is pretty cool actually
Ah yes, outlawed. Forgot about that
If you watch these 3 videos and still think ecash = digital fiat then idk
all of my points still stand. Plus I don't think anyone linked in your vids refute them either.
e cash is a rug waiting to happen
Only one mint at a time. But also, that's not the efficient way to steal with a mint. You can just print yourself money and keep it going.
yes, develop trust at a mint then run it quietly at a fraction of reserves for a long long time in secret
What is the most trusted mint? Is there a directory anywhere?
Wouldn't put any sort of trust in a mint right now. We're still very early days for eCash on Bitcoin. If you want to play around with Cashu (knowing the chance of losing funds is there) I suggest Minibits or Enuts
view on youtu.beview on youtu.beLyn talks a bit about ways that mints could be audited (to some degree). It's an evolving topic.
Would also say a fedimint with multiple guardians isnt 100℅ centralized. Centralization is a spectrum, removing a single point of failure is a reduction in centralization IMO. It's still far more centralized than Bitcoin, but there's tradeoffs (good and bad)
Yes but it's 100 percent custodial.
Yes. Anyone claiming it's not is a red flag IMO. But custodial and centralized are 2 separate considerations
I hope everyone here realizes that you're using a custodial service with an amount of sats that wouldn't make sense to try to self custody on Bitcoin or in lightning. One where the operator knows everyone's balances and transactions. One where it is trivial to selectively nullify that balance with a single unilateral action.
Ecash fixes this, and federated ecash distributes this even further.
Wen ecash air miles?
This may sound a little flippant; I don't mean it to be.
In some cases btc (even on lightning) doesn't work well and neither do dollars (the most non internet native money since cowries), so we get "points."
Ecash is a heck of a lot better than points for reasons listed above and because it could be a standard that allows for interoperability.
Agreed. Ecash is a quite elegant way to fix those issues. Nevertheless ecash it doesn't have to be used by everybody, every bitcoiner. Only in specific cases where is really needed. And the beauty of it is that nobody is forcing you to use it, is fully inter-communicating with regular LN apps.
Ecash custodians are better than regular custodians.
You are missing the point. No decent ecash developer in the bitcoin scene is stating that ecash is non-custodial.
the top post of
/ecashis a claim that ecash is self-custodial.I truly believe federated ecash (fedimint) operates more like a different network entirely, one that you swap Bitcoin for and you need to self custody that ecash asset. That network is distributed with not a single operator that can unilaterally make decisions in that network.
Not everyone agrees with me, but compared to other technologies and law, this is what I believe.
Well, one of the guys building with fedimint is #383702
On chain transactions do not scale beyond 7 transactions per second. If we want use cases beyond SoV including a full fledged global currency, we will need to make some concessions. Different wallets serve different use cases.
Let's say the mint is Starbucks, or Amazon.com or your local farmer's market. They have a reputation to maintain and they have earned some people's trust. If they offer an Ecash solution that enables people to move from fiat and fiat gift cards to bitcoin backed IOUs, is this not a win for Bitcoin? Yes, there are custodial shortcomings and it violates the principle of NYKNYC, but that seems like a worthy tradeoff to help scale Bitcoin based transactions FAR beyond 7 TPS.
Again, we would advise people to keep the minimum in their Hot Wallet because NYKNYC.
Yes, you don't need to most secure network to ever exist to buy a coffee.
https://darthcoin.substack.com/p/bitcoin-adoption-using-ecash
Ecash does not come into existence or is issued through government decree, so its not digital fiat.
Also, in theory at least, ecash is backed by bitcoin.
I'm not trying to change your mind. I have issues with ecash as well. I just think when arguing online, the right words are important.
Rome was not built in a day...
Agreed with most of these critics, but no body is claiming Ecash isn't all these things. The only diference here is that there is no bailouts in the event of a bank-run on the mint. Just like Tether-usd is an other fiat currency on a blockchain but there is an important demand for it so be it. Let the free market find it's own way. Again there is no bailouts coming from the Bitcoin base chain, so all the actors on the top layers must be honest or else fail. You don't have to use it if you don't like it, but maybe some less fortunates people in africa or latin america desprately need it to survive the day to day life.
Yup I’m not seeing it. Zero value as the use cases don’t hold up. Hard pass!
Because all the bitcoin influencers say so!
How dare you not agree
It's hard to make money from Bitcoin because you have to provide value to get value.
That's why we see all these shitcoins where the creator gets all the money for nothing.
you can tell its a bull market when there's a bunch of hyped projects that want to take your bitcoin and give you a new token printed from nothing
I am hopeful cryptography and clever devs will figure this out.
I think there needs to be a standard for a mint which allows for auditing of outstanding ecash to BTC vaulted. It would still be custodial, but you could run it yourself. If all mints were run this way, there would be interoperability.
Ok, let me just provide the short answer: e-cash is fiat where you can shoot the central bankers in the head if they fuck you, and they know this.
I will let others dispute your "impossible to audit" claim.
"100% centralized." - Disagree, you can create mint if you want (there is no single mint)...
The rest is true 🤝
Agreed, I easily created my own mint on LNBits using my own node just for test purposes and it works just fine. This could be an initial solution for friends and family who trust me and don't feel comfortable using other tools. Of course I can rug them, but they know that so it's a trade-off.
That's why I think that liquid is shitcoin (central control).
The case of Liquid would be closer to the coming Fedimint since it is federated. It still requires some level of trust in exchange for some additional features, but at least on Fedimint you would be able to know who can rug yoy.
IMO Federation gave a false sense of safety. Something like government take care of your money better than you...
There will be tradeoffs with all scaling solutions for better or worse.
I do not backed in any way the use of ecash. Yes is custodial. Everybody knows that. Are just digital gift cards.
Saying that... in some use cases could push for bitcoin adoption.
Yes, ecash is not for OG botcoiners. They really do not need it. But think about those poor guys in African continent, when they cannot afford opening a decent LN channel.
the top post of
/ecashis a claim that ecash is self-custodialAfrica is poor because of fiat banking and currency manipulation. What is a digital fiat mint going to fix?
Africa is poor for many reasons, the most important is a lack of human capital
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Why was it removed from
/ecash? This is clearly a legit ecash discussion.pure facts
ecash with Cashu is very useful for letting friends and family use your lightning channels you have setup until more bitcoin scaling is developed.
Cashu is more like a gift card than fiat. #397764
While I hold strong convictions about Bitcoin's self-sovereign potential, I believe that solutions like ecash might hold value as transitional tools within specific contexts. For those still reliant on traditional banking systems, a well-implemented ecash solution could act as a stepping stone towards greater financial autonomy. As infrastructure development and user-interface improvements progress on Bitcoin and Lightning, perhaps these intermediate solutions can become naturally less appealing. Could projects aiming to develop the best possible ecash infrastructure adopt practices that actively encourage a gradual transition toward trust-minimized Bitcoin solutions?
fiat[ fee-aht, -at; fahy-uht, -at ] noun an authoritative decree, sanction, or order: a royal fiat. No one has decreed that you use ecash. You are using the word fiat to mean something else.
Ecash is a tool for achieving an end. Use it for that end up to the point you fell comfortable with the risk of funds loss.
Did you just describe Stacker News?
it is entirely possible to audit ecash liabilities: https://gist.github.com/callebtc/ed5228d1d8cbaade0104db5d1cf63939
It is but currently it's the best way to scale bitcoin unless we get some soft forks
Economy is not a closed system,
So, as bitcoin permeates the FIAT world, the FIAT world also permeates bitcoin,
You are rigth, ecash doesnt drift too much from the FIAT model. Its the model we dominate best and MrSmith keeps pushing
I think is almost the same with PayPal and Revolut...?! Centralised and unsafe for your bitcoin and other cryptos.
I agree it has a lot of centralising and trust factors, and maybe this tech is better suited for those who want to trust, like an uncle jim setup, or a community like a circular economy, giving them the tools to manage their own little bank where trust is already established
Here in South Africa group savings is a massive thing, holding billions, communities, groups, families all get together and save together, pull loans from it based on agreements, not that there aren't scammers, but this is handled within the community, even our local banks offer products to help this type of community fund pooling
This is where I see something like fedi/ecash finding its niche
I would agree with you if you could audit the mint.
What bothers me is that we aren't seeing ecash 2.0 with problems solved, we are seeing ecash 1.0 with new marketing.
Satoshi built and tested proof of work before he published the white paper.
This ecash parade is being rushed down the street with tired old problems. At least try to fix the lack of accountability.
I don't disagree with you there, I don't see this as even close to a finished product that I'd propose as a solution for custody of funds
correct 💯
It's just custodial lightning like WoS with the added benefit of privacy and offline usage. It's not an ecash thing, it's just lightning. The advantage over fiat is that you can choose who to trust, anyone can run a mint, could be someone you know, unlike a bank, and you can move your funds quickly. But yes I get your point, onchain bitcoin and running your node for lightning are the most trustless options, but dealing with lightning is very hard, onchain might be expensive so people go to custodial solutions. This is a problem if onchain fees get too high and becomes hard to self custody.
you can audit a lightning channel. ecash cannot be audited at all.
Can't audit WoS.
It's at least possible though if they published their channel states. Ecash mints are impossible to audit as it stands.
How do you audit their liabilities? And you realize it would be foolish to back 1:1 user balance with LN channels, right?
So "audit their lighting" means absolutely nothing.
Ecash is a way for decentralizing third party custody.
yes it is very easy to create a mint. there's no ledger or database required.
I don't have anything against ecash as a technology, but people should know the truth and not be misled
Yes yes good 👍
https://m.stacker.news/16021
Yes yes good 👍
https://m.stacker.news/15925
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Security model:
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I don't know. I don't fully get territories yet so I'm not sure why it was removed.
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yes this is 100% the case.
ecash is just a blind signature that can be issued and verified by the mint
there is no ledger or independent way to audit the supply of these signatures
You can audit. It's not 100% verifiable, but it can help catch fishy behavior. A lot of free baking theory and competitive banking/hedge funds come into the equation.
Also programmatic bank runs and scheduled expirations help this.