Onboarding users into bitcoin is no simple task; the average user is simply not ready to handle money in a self-sovereign manner the way on-chain and the Lightning Network demand. To manage your bitcoin safely and privately, you’ll need to run a node and use bitcoin privacy best practices, and this takes time to learn and operate with a level of comfort.
Instead of using bitcoin as intended, new users prefer to trust custodial solutions like exchanges or custodial-managed wallets. By opting for these third-party services, you not only give up signing rights to your bitcoin but also your privacy. These third-party services manage your balances and give you permissioned access to conduct payments between users in their ecosystem or the greater bitcoin network.
Having intermediaries operate with your bitcoin is possible but not ideal, nor is the way the asset was intended to be used. User experience on bitcoin wallets has improved dramatically over the years, but it still requires some technical knowledge to operate safely; there is simply no way to avoid that learning curve when using on-chain or current layer two solutions.
As bitcoin attracts users outside the tech-savvy early adopters, new on-ramps will have to be built to accommodate this next cohort of users. In bitcoin, there is no perfect solution that will solve all issues for every bitcoiner, but there are options for every bitcoiner, and you can decide if the trade-off is worth it.
Bitcoin with training wheels.
One way to bridge the gap and get users into bitcoin without the need for trusting a single custody provider and still avoiding the on-chain complexity of bitcoin is through eCash mints like Cashu.
Cashu is an implementation of a free and open-source Chaumian ecash system built for bitcoin users and backed by bitcoin. Cashu offers users the option of creating their own mints or using third-party mints in their eCash wallet to conduct payments. Regardless of the mint you’re using, users can enjoy near-perfect privacy when using custodial bitcoin applications.
While you are trusting a mint to honour your conversions, you get to choose one or several mints to hold your funds, in addiction you can move your funds between mints or rebalance your mints, so you’re not taking more risk with a single mint.
Regardless of the mint you’re using, or the number of mints you interact with, you still retain your privacy. Nobody needs to know who you are, how much funds you have, and with whom you transact, and that’s how it should be when using bitcoin.
Cashu runs on bitcoin.
Cashu is built for bitcoin users who aren’t yet ready to take on the full responsibility of managing their bitcoin but would still like to maintain their privacy and have permissionless interactions with their funds. Cashu allows users to spin up a software wallet in seconds without the need for a set of private and public keys. You keep your token balances on your device and interact with mints which will honour the deposits and redemptions upon your requests.
Cashu wallets use the mint’s Lightning node for making or receiving bitcoin payments in exchange for ecash. So users can send and receive eCash tokens with other eCash users or interact with the Lightning Network to send and receive payments.
Cash wallets provide an easy and affordable way for people to initially onboard into bitcoin, own Satoshis as a bearer asset and interact with the Lightning network with low friction onboarding and a simple user experience.
What is an eCash Cashu mint?
A Cashu mint is a Lightning node that runs the Cashu Mint as an extension to their node, allowing the Lightning node to accept Lightning payments and convert them into eCash tokens or alternatively to destroy eCash tokens and release payments back into the Lightning Network.
Cashu mints are blind to those who use their service; the mint does not know who you are, what your balance is, or who you’re transacting with. Users of a mint can exchange eCash privately without anyone being able to know who the involved parties are. Bitcoin payments are executed without anyone able to censor specific users.
In Cashu, you don’t have a balance. You don’t have an account. All you have is Cashu tokens, which you can spend on with other eCash wallets or via the Lightning Network to other Lightning-enabled wallets.
Manage your mints.
When you set up a Cashu wallet, you might have a default mint already set up, which will allow you to interact with anyone also connected to that mint. You can also receive payments from the Lightning Network to your Cashu wallet and mint those Satoshis into eCash tokens.
- To access a mint, all you need to know is that Mints URL.
- Head over to your wallet’s mint section and paste the URL in the mint section.
- Click add.
You can add as many mints as you like, and you can remove mints at any time. How you manage your funds and interact with mints is all up to you.
You might want to add certain mints to your wallet so you can:
- Send or receive eCash tokens directly to users of that mint.
- Avoid having all your funds with a single mint.
- Moving funds to mints you use more often and rebalancing your wallet to avoid paying regular Lightning routing fees.
The adventures of eCash Alice
If you’re still stuck on why you would need multiple mints, consider the following example. Alice works at her local cafe and has her eCash wallet to accept payments for tips and her weekly wage.
- Mint 1: Her weekly wages
Alice has set up mint one in her wallet because it’s the mint managed by her employer; she receives her weekly wages in mint 1 each week.
- Mint 2: Her daily tips
While Alice works at the Cafe daily, she receives tips using eCash. Some tips she accepts via the Lightning Network directly to Mint 1; but Alice has a few regulars, and she adds Mint 2 to her wallet so the customer can tip her directly now that they have mutual mint.
- Mint 3: Sending money home
Alice also sends money home to her parents and little brother and has a shared mint with them. She swaps some of her Mint 1 and Mint 2 funds into Mint 3 and then pays her mom and brother in separate direct payments.
Swapping between mints.
Once you’ve added the relevant mints you wish to interact with and hold balances with, you can swap eCash tokens between these mints using your Cashu wallet.
To conduct a cross-mint swap, simply:
- Navigate to the mint section of your wallet.
- Select the mint you want to swap from.
- Select the mint you want to swap to.
- Select the number of eCash tokens (Satoshis) you wish to transfer.
- Click swap.
The wallet will calculate the fasted route between the two mints via the Lightning network and convert your tokens into Satoshis, route it via Lightning to the other mint and mint a new set of eCash tokens in the destination mint.
It’s important to note that when doing inter-mint swaps, you will need to pay Lightning routing fees which will cost you a few Satoshis, so make allowances for that when conducting your swaps.
Once your eCash tokens have landed in the new mint, you can then pay other users within the mint privately at zero cost.
Do your own research.
If you want to learn more about Cashu mints, use this article as a jumping-off point and don’t trust what we say as the final say. Take the time to research, check out their official resources below or review other articles and videos tackling the topic.
Do you believe in self-custody?
Do you have self-custody of your bitcoin? Which method of self-custody are you using? Do you have a hot wallet, cold storage, or run your own node? Have you helped others with their self-custody or act as a custodian for your family and friends? What do you think of Chaumian mints?
Let us know in the comments below.
One Response
ECash is really starting to come up with some really cool features, I can’t wait to see one of the popular LN wallets start to add support for it and we can get more people to play with privacy sats