Ecash on Bitcoin
Cashu open source contributor
BitcoinSeoul 2024
What is ecash?
How does ecash work?
Why is ecash on Bitcoin?
Cashu: A simple ecash protocol built for Bitcoin
Topics
What is Ecash?
What is ecash?
What is ecash?
No Ledger
Distributed Ledger
What is ecash?
No Ledger
Distributed Ledger
Bearer Token
UTXO
What is ecash?
No Ledger
Distributed Ledger
Bearer Token
UTXO
Public transactions
Blinded transactions
What is ecash?
No Ledger
Distributed Ledger
Bearer Token
UTXO
Public transactions
Blinded transactions
Decentralized Blockchain
Centralized verification
What is ecash?
No Ledger
Distributed Ledger
Bearer Token
UTXO
Public transactions
Blinded transactions
Decentralized Blockchain
Centralized verification
Trusted
Trustless
What is ecash?
No Ledger
Distributed Ledger
Bearer Token
UTXO
Public transactions
Blinded transactions
Decentralized Blockchain
Centralized verification
Trusted
Trustless
Ephemeral transactions
Eternal transactions
[1982] (Chaumian) Ecash is a an electronic cash system that uses:
- A blind signature scheme
- A centralized signing/verifying instance
- and Bearer tokens
To replicate the properties of physical cash in the digital realm
In simple terms:
I have some peice of data (that is the ecash)
In simple terms:
I send the data to someone else
In simple terms:
Now they have the ecash, and I don't have it anymore
Problem?
Now they have the ecash, and I don't have it anymore
I have made a copy of the
ecash
Problem?
I have made a copy of the
ecash
Ecash mint
Please invalidate this and give me a new one
Problem?
I have made a copy of the
ecash
Ecash mint
Please invalidate this and give me a new one
We re-introduced CENTRALIZATION????
We re-introduced CENTRALIZATION????
Why ecash on Bitcoin?
History of ecash
1983
ecash Paper
History of ecash
1983
ecash Paper
1990
DigiCash
History of ecash
1983
ecash Paper
1990
DigiCash
1998
"DigiCrash"
History of ecash
1983
ecash Paper
1990
DigiCash
1998
"DigiCrash"
History of ecash
1983
ecash Paper
1990
DigiCash
1998
"DigiCrash"
2002
PayPal
2002
History of ecash
1983
ecash Paper
1990
DigiCash
1998
"DigiCrash"
2002
PayPal
2002
History of ecash
1983
ecash Paper
1990
DigiCash
1998
"DigiCrash"
2002
PayPal
2002
2008
Bitcoin
History of ecash
1983
ecash Paper
1990
DigiCash
1998
"DigiCrash"
2002
PayPal
2002
2008
Bitcoin
LN
2017
History of ecash
1983
ecash Paper
1990
DigiCash
1998
"DigiCrash"
2002
PayPal
2002
2008
Bitcoin
LN
2017
2017
2021/22
Fedimint
Cashu
History of ecash
1983
ecash Paper
1990
DigiCash
1998
"DigiCrash"
2002
PayPal
2002
2008
Bitcoin
LN
2017
2017
2021/22
Fedimint
Cashu
But we already have bitcoin!
Bitcoin
But we already have bitcoin!
Bitcoin
Slow confirmation
It's a blockchain...
High cost
Absolute transparency
But we already have bitcoin!
Bitcoin
Slow confirmation
It's a blockchain...
High cost
Absolute transparency
LN
It's a blockchain...
But we already have bitcoin!
Bitcoin
Slow confirmation
It's a blockchain...
High cost
Absolute transparency
LN
Slow confirmation
High cost
Absolute transparency
It's a pain to run...
Online requirements
Liquidity management
Channel cost
But we already have bitcoin!
Bitcoin
Slow confirmation
It's a blockchain...
High cost
Absolute transparency
LN
Slow confirmation
High cost
Absolute transparency
It's a pain to run...
Online requirements
Liquidity management
Channel cost
...I'm just gonna use a custodian...
Where do we stand?
LN
Bitcoin
L2s
Not there yet
Where do we stand?
LN
Bitcoin
L2s
Not there yet
Custodians are also bad:
- Censorship
- Surveillance
- Rug-pull
- ...
What needs to be done?
LN
Bitcoin
L2s
Needs to be improved
Custodians are also bad:
- Censorship
- Surveillance
- Rug-pull
- ...
What needs to be done?
LN
Bitcoin
L2s
Needs to be improved
Custodians are also bad:
- Censorship
- Surveillance
- Rug-pull
- ...
Ecash can fix some of these!
Custodians are also bad:
- Censorship
- Surveillance
- Rug-pull
- ...
Ecash can fix some of these!
How does ecash work?
"Traditional" custodial setup
Alice
Bob
Charlie
Alice
Bob
Charlie
| Sender | Amount | Receiver |
|---|---|---|
| Alice | 10$ | Bob |
| User | Balance |
|---|---|
| Alice | 20$ |
| Bob | 10$ |
| Charlie | 0$ |
Alice
Bob
Charlie
| Sender | Amount | Receiver |
|---|---|---|
| Alice | 10$ | Bob |
| Bob | 5$ | Charlie |
| User | Balance |
|---|---|
| Alice | 20$ |
| Bob | 5$ |
| Charlie | 5$ |
Alice
Bob
Charlie
Authorize
What's wrong?
- Horrible privacy
- Easy to target/censor individuals
- Data honey-pot
Ecash custodial setup
(simplified with a real world analogy)
| Spent secrets |
|---|
Alice
Bob
Charlie
| Spent secrets |
|---|
Alice
Bob
Charlie
Only Alice can open
Carbon paper
| Spent secrets |
|---|
Alice
Bob
Charlie
secret
| Spent secrets |
|---|
Alice
Bob
Charlie
| Spent secrets |
|---|
Alice
Bob
Charlie
| Spent secrets |
|---|
Alice
Bob
Charlie
| Spent secrets |
|---|
Alice
Bob
Charlie
| Spent secrets |
|---|
Alice
Bob
Charlie
| Spent secrets |
|---|
Alice
Bob
Charlie
| Spent secrets |
|---|
Alice
Bob
Charlie
| Spent secrets |
|---|
Alice
Bob
Charlie
| Spent secrets |
|---|
Alice
Bob
Charlie
| Spent secrets |
|---|
Alice
Bob
Charlie
| Spent secrets |
|---|
Alice
Bob
Charlie
| Spent secrets |
|---|
Alice
Bob
Charlie
| Spent secrets |
|---|
Alice
Bob
Charlie
| Spent secrets |
|---|
Alice
Bob
Charlie
| Spent secrets |
|---|
Alice
Bob
Charlie
| Spent secrets |
|---|
Alice
Bob
Charlie
| Spent secrets |
|---|
No Ledger
Bearer Token
Blinded transactions
| Spent secrets |
|---|
No Ledger
Bearer Token
Blinded transactions
cryptography
Cashu: Ecash on Bitcoin
A simple ecash protocol where...
- The mint operates a lightning node
- Issues ecash that can be used to pay invoices via the mint
The protocol is defined in NUTs (Notation, Usage & Terminology)
A simple ecash protocol where...
- The mint operates a lightning node
- Issues ecash that can be used to pay invoices via the mint
A simple ecash protocol where...
- The mint operates a lightning node
- Issues ecash that can be used to pay invoices via the mint
A simple ecash protocol where...
- The mint operates a lightning node
- Issues ecash that can be used to pay invoices via the mint
A simple ecash protocol where...
- The mint operates a lightning node
- Issues ecash that can be used to pay invoices via the mint
A simple ecash protocol where...
- The mint operates a lightning node
- Issues ecash that can be used to pay invoices via the mint
Cashu use cases
Provide LN infrastructure to users
Cashu use cases
Peer to peer payments
Peer to peer payments
Provide LN infrastructure to users
Cashu use cases
Peer to peer payments
Offline payments*
Peer to peer payments
Provide LN infrastructure to users
Advanced use cases
Advanced use cases
HTLCs
Advanced use cases
HTLCs
Blinded authorization
Advanced use cases
HTLCs
Multi-mint payment
Blinded authorization
More use-cases soon ™?
Thank you!
npub1cj6ndx5akfazux7f0vjl4fyx9k0ulf682p437fe03a9ndwqjm0tqj886t6
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