calle's avatar
calle calle@cashu.me 1 year ago
Here is the crazy part: even if you required KYC in an ecash system at every step of the protocol and it would still have amazing privacy. Mining: Calle mints 1000 sats. Mint knows Calle minted 1000 sats. Swapping: Calle sends 500 sats to his friend. Friend swaps them to prevent double-spending. Mint knows friend swapped 500 sats. Mint does not know that Calle sent 500 sats to friend! Melting: Friend pays a Lightning invoice for 500 sats. Mint knows that friend has melted 500 sats. That's worse privacy than a system without KYC but the transactional ecash pricacy would still remain largely unaffected due to the properties of blind signatures. I'm not saying this is desirable, but remarking an interesting observation. Regulated companies will choose their own policies for operating an ecash system.

Replies (16)

Jose Sammut's avatar
Jose Sammut 1 year ago
Okay, but in that case why would they go through the hassle of setting up an ecash system vs just doing what they're already doing?
3 replies ↓
calle's avatar
calle calle@cashu.me 1 year ago
I was about to say the same thing. You can always add more restrictions and also make the ecash wallet app spy on the user and nullify all of its properties. At that point however, you probably wouldn't use ecash at all.
Big Barry Bitcoin's avatar
Big Barry Bitcoin BigBarryBitcoin@Nostr-Check.com 1 year ago
Just thinking adversely. CBDC proponents are looking at ecash, but how can they use that to get everyone on board first and then fuck everyone over after? It's also a pressing issue for cashu mints too tbh, mints want to stay under the radar and stay legal, I don't think many will want to explicitly break the law. So I guess these rules can apply to them too and this will effectively drive cashu underground for the most part where most mints ARE illegal.
1 replies ↓
Uxellodunum's avatar
Uxellodunum uxellodunum@proxymana.net 1 year ago
It could also depend on competition. Say an exchange does introduce ecash, which presents no downsides compared to what's done now and multiple upsides for the end-user (but also for the exchange potentially). All it takes is one and the question then becomes which one is, in fact, offering the better service for the end-user? I think time will make it clear.
Uxellodunum's avatar
Uxellodunum uxellodunum@proxymana.net 1 year ago
As an example, the EU has guidelines that apply to ecash-based CBDC applicants that completely break a lot of the expected ecash benefits - They'd fuck everyone over from the start. You could argue that then it's not ecash, much less chaumian, but truth is it's being looked at, there are applicants and it *could* come to pass.
↑