17 Mar Cashu: Chaumian E-Money & Mints Over Lightning
Cashu is a venture for Lightning Community enabled Chaumian e-cash for Bitcoin. Chaumian e-cash is digital money cost system named after creator David Chaum, a legendary cryptographer, whose pre-Bitcoin, early digital money system “Digicash” provided huge enhancements in person safety and privateness by utilizing cryptography.
Chaumian E-Money Over Lightning with Cashu
Cashu is an thrilling new Layer two Bitcoin venture for Chaumian e-cash and mints which allow quick, scalable, completely non-public, low-cost, Bitcoin-backed e-cash transactions. Cashu creates a mint, which points e-cash tokens on Lightning Community which accepts Bitcoin and makes use of blinded signatures to mint e-cash tokens, which might be spent, obtained, transacted with, and ultimately redeemed for Bitcoin.
With Cashu, there aren’t any accounts or private data required, the mint can’t see your steadiness, tokens, or who you’re transacting with, and you may maintain on to your personal tokens, (though your Bitcoin is within the mint’s custody). Cashu permits anybody to begin a mint, and act as a “financial institution” which may subject e-cash. Customers have the liberty to decide on the mint they need to use, and redeem their e-cash tokens for Bitcoin at any given time.
Cashu was created by Calle, a pseudonymous Bitcoin and Lightning Community developer who takes his inspiration for Cashu from David Chaum’s authentic “Digicash” Chaumian e-cash system which was launched within the Nineteen Nineties, however which did not acquire traction and mainstream adoption.
To be extra exact, Cashu is predicated on a variant of Chaumian blinding, designed by David Wagner, a scholar of Chaum, in addition to a minicash-based token logic which makes use of a Blind Diffie-Hellman Key Alternate scheme. Wagner was a scholar of Chaum’s who made another implementation of e-cash to realize comparable safety and privateness ensures by way of encryption whereas avoiding sure patents held by Chaum for Digicash.
Cashu, is much like one other Chaumian e-cash venture for Bitcoin often known as Fedimint, which employs comparable applied sciences to realize lots of the similar targets of improved privateness and scalability, with the important thing distinction being that Fedimint employs federated Chaumian mints, whereas Cashu doesn’t.
Cashu’s mannequin permits anybody to create a mint, and any person to decide on the mint they need to use, however the mints are unbiased of one another and don’t federate as in Fedimint. Cashu customers can simply use a number of mints, relying on the mint’s fame, price, comfort, or different components and incentives.
What Benefits Does Chaumian E-Money Present for Bitcoin?
Cashu units the stage for a number of necessary and key advantages which normal on-chain Bitcoin or Lightning Community transactions don’t possess. Cashu’s e-cash makes some tradeoffs to realize non-public, safe, scalable, low-cost transactions. The primary commerce off is that customers should deposit Satoshis with the mint as a way to mint e-cash, so it’s a custodial pockets design, though a custodial design with far much less belief assumptions than are usually required for custodial wallets.
As soon as a person deposits their Bitcoin with the mint and creates e-cash tokens, the mint itself has no approach of figuring out the variety of customers, who they’re, their account balances, or their transaction histories. Cashu customers also can pay to and obtain from common Lightning Community wallets with on-chain capabilities coming quickly. Moreover, Cashu e-cash transactions are low-cost, extremely scalable and with out limitations.
Cashu is a brand new venture, which continues to be in an early stage of improvement, so enhancements are continually being carried out, and customers ought to bear this in thoughts in the event that they plan to make use of it with actual cash. That being mentioned, it is likely one of the most fun new initiatives which tackles Bitcoin’s privateness and scalability points, from a unique approach.
Cashu’s e-cash gives some variations to custodial Lightning wallets from each a privateness and safety perspective. At the moment, custodial Lightning Wallets, whereas immediate and low-cost, may censor a person’s transactions if motivated or compelled, in addition to monitor transaction information and spending habits. With e-cash, this isn’t attainable as mints don’t know something about quantities or senders and recipients.
Cashu additionally gives comparable pace and value advantages much like Lightning transactions, so funds are immediate, and unfairly low-cost, however with extra privateness. When contrasted towards non custodial Lightning wallets, Cashu’s e-cash nonetheless gives a number of benefits from a usability standpoint. There’s no have to handle channels and inbound/outbound liquidity, or take care of channels being unilaterally closed by liquidity companions.
Calle, Cashu’s creator additionally envisions a future the place Cashu is a protocol which may simply be added to a variety of Bitcoin wallets and companies, to make e-cash, mint, and Lightning Community integrations extra seamless. Cashu gives numerous benefits that might result in widespread adoption in commerce purposes and use circumstances.
Cashu’s improved usability vastly simplifies the layer two expertise for Bitcoin most customers are accustomed to by way of Lightning Community, and enhances the extent of privateness and safety skilled by custodial Lightning pockets customers within the overwhelming majority of custodial Lightning wallets accessible right this moment.
It could be a significantly better and less complicated technique to supply a Lightning-like Bitcoin person expertise to non-technical customers who simply need to use Bitcoin to purchase and promote stuff on-line, with out the complications of operating a Bitcoin and Lightning Community node, and managing channels and liquidity on their very own.
Cashu and different e-cash implementations like Fedimint have great potential for vastly bettering the Bitcoin round economic system by easing the training curve presently skilled by Bitcoin customers making an attempt to undertake layer two applied sciences like Lightning Community.
Whether or not Bitcoin wallets, companies, and companies start to assist Cashu or different e-cash schemes for Bitcoin stays to be seen. Will e-cash revolutionise Bitcoin this time round, or will its momentum sputter and fizzle out because it did virtually 30 years in the past when David Chaum endeavoured to convey Digicash to the general public within the Nineteen Nineties?