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Full context (cross posted from X):
Seth For Privacy
Summarizing my thoughts on ecash
For some reason this ecash trend seems to be gaining steam instead of going away, so I'll try my best to detail my thoughts on ecash into one post.
1. The incentives are broken
Ecash finds itself between a rock and a hard place. For users to trust the mint, they need to know that the people behind the mint are trustworthy. If the people running the mint reveal their identities (or even just nyms), they're a trivial target for regulators and law enforcement as it's clear a mint is an MSB.
If the people behind a mint don't reveal their identities or nyms, users of that mint are subject to trivial rug pulls with no recourse. Which do you prefer as a user? Mint operator rug pulls or government rug pulls?
If a mint had been targeted like Samourai Wallet was, instead of just a potential privacy loss, all users would have lost all of their Bitcoin.
2. Ecash is not "self-custodial"
For some reason this concept of ecash being "self-custodial" is a thing, merely because the tokens themselves are self-custodied (and require proper backups of seed phrases etc.) While the lines get a bit weird, it's important to separate two things:
1. The asset people want is Bitcoin, not ecash tokens.
2. The asset people give up custody on is Bitcoin.
The ecash tokens themselves are completely worthless IOUs without the Bitcoin behind them, so even if I can take custody of my ecash tokens, I have 100% given up custody of my sats to a third-party.
Because of this, talking about ecash as self-custodial is disingenuous -- no one wants empty IOUs, they want Bitcoin. When they use ecash they do not have custody of their Bitcoin.
3. Ecash still requires all of the hurdles of Bitcoin self-custody
The hardest hurdle for many people to adopting Bitcoin is the simple first step -- writing down 12 words and making sure not to lose them. With ecash you still have this single greatest barrier of entry as you must backup a seed phrase or secret in order to restore your ecash tokens.
4. There is no incentive for custodians to implement ecash
While a custodian could switch to ecash out of the goodness of their heart, the incentives are broken for custodians. Not only does ecash harm the UX their users are used to (not having to store a secret seed phrase), it also introduces additional infrastructure complexity. Instead of just running a database, now they have to run additional mint software to provide their users with tokens, and handle support cases where users lose their tokens.
In theory a custodian could just also store the seed phrase for their users, but then have we actually improved on custodians at all? They even have custody of the ecash tokens in that case.
5. Custody is a line that cannot be crossed
The core of what makes Bitcoin unique is that we can actually take custody of it ourselves, gaining immense freedom and self-sovereignty through a bit of personal responsibility. Even though I am a massive proponent of building better privacy tools, sacrificing custody to get better privacy is a non-option for me.
Surely we can do better and build privacy tools on top of Bitcoin (or directly into Bitcoin's consensus layer) that allow us to have both privacy and self-sovereignty via self-custody.
I will not give up custody of my Bitcoin, no matter what, and you shouldn't either. "Better custodians" are just custodians with extra steps, and still strip us of self-sovereignty and thus freedom.
6. Time is a more scarce resource than even Bitcoin
Even though I have been very outspoken on what I view as a pointless venture, I am not here to stop anyone from building what they enjoy in the space. Devs working on ecash are free to do so as of course I have no control over them, though I fear that time spent on improving custodians is time that we will not get back. It's clear that the US gov and many in the EU are seeking to ramp up their attacks on Bitcoin privacy and self-custody, and our time to build tools to route around them is growing shorter and shorter.
P.S. - None of what I write is a direct attack on any ecash dev, and I have immense respect and personal relationships with most of the people working on this stuff. Respect for an individual doesn't have to mean I agree with them on every avenue they pursue.
Totally agree with you, the whole eCash thing is turning into a grotesque spectacle and has many red flags.
Agreed except this:
I've just realised, you could print Ecash tokens and exchange them like fiat cash.
For third world countries with restricted Internet or lack of smart phones, this could be a game changer. You can literally print them at home and they are one time redeemable by the recipient.
You could carry them around in a old school leather wallet.
View quoted note →boo
Great Note on this topic. Calle is being way too sensitive about anyone shitting on his passion project that is going nowhere for obvious reasons.
This is why profit motivated projects with budget contraints have Business managers (sheperds really) and left brain design types.
Engineers will persue technically interesting dead ends with the most painful end product.
Ecash is the "Nuclear Fusion" of currency technology.
It's always almost ready, but never quite makes it
Yes, it has privacy benefits but many view it as a potential scaling solution for bitcoin. Let’s face it. Most people will never be able to afford to have their own UTXO and self custodial Lightning will be similarly out of reach for plebs and day-to-day transactions. We’re moving quickly into a world where only whales, institutions, and custodians will interact with the base chain. Unfortunately, this means that most people will use a custodian.
If that’s true, then the best custodian will be either someone you personally know (uncle Jim) or a geographically distributed group of custodians hopefully out of reach of any one country. For instance, maybe a federation based in or including friendly countries like El Salvador, etc. Ecash seems useful to me in those scenarios.
SamouraiWallet once said in a podcast interview that despite the fact that he hated LN, he still respected the devs that were actually building stuff. What he hated were the evangelizers that promised the world.
I share a similar sentiment with ecash. The devs are very prolific and can build. It's just everyone around that is hyping it to the moon.
Nail on head.
100% agreed.
NGL you make some good points
If a mint could be punished for provably rugging their users, such as losing a bitcoin bond payable to the token holders (separate from the mint funds), then a mint could be run as a tor onion service. Then the only talk is proving the amount custodied by the mint is less than the bond amount. The incentive for the mint to post this bond is fees.
Thanks, I wish they weren't true and that ecash was a silver bullet but it's just not...
I like ecash because we can haz a game of whackamole. Let them come after our pennies. Anyone storing large amounts of ecash in mints deserves to have their funds rugged.
"This is why profit motivated projects with budget contraints have Business managers (sheperds really) and left brain design types.
Engineers will persue technically interesting dead ends with the most painful end product."
motherfucking NAILED it.
spread your ecash around multiple mints, move to lightning when you have $100 worth. I don't see the big deal.
I agree with what you've said.
There's tradeoffs whenever you move away from the base layer & proponents tend to gloss over them. Over time users also forget that they've made tradeoffs & new users aren't even aware of them.
I think the only ecash model that seems to provide a long term benefit is one that shares the trust among several custodians. As you say, there are tradeoffs & risks with that model as well.
My approach is to quietly watch where things go & hope for a sweet spot in the tradeoffs. These solutions are aimed at solving the scaling problem which is not a direct problem for Bitcoiners. I always have Sowell whispering in the back of my mind.
Does that increase or decrease your chances of getting rugged lol
Decentralized FDIC insurance.
I'm thinking along the same ways, if the trust is the bottleneck here, let's think about how to minimize the trust while preserving the benefits ecash brings. You don't have the reject the whole experiment right away.
What's the opportunity cost, though?
Fiat is the guaranteed rug;
onchain is too expensive for small frequent payments, and too public.
I think it might be usefull if you know the person or people who run the mint, i don't think people will necessarily become targets if they choose who they let in. Ofc I'm not talking about authoritarian regimes in this scenario. I think ecash also gets a lot of heat, people like Calle have always been very clear about the risks of ecash.
Good points. I remain optimistic that ecash will carve out a role. If it is for nothing more than txs worth <$10(ish) and/or only used by cypherpunk-types, still a win IMO. We shall see.
In the mean time, it'll be important for ecash software to disclose risks involved upfront. Worst thing we could have happen is people getting rugged and not even knowing why.
Is "ecash" a new project or meaning cryptocurrency concept at generally?
Google Chaumian e-cash.
There will be mints that accumulate large amounts and when thinking about the system as a whole, a million users losing $1 is as bad as a user losing a million.
generational wealth in bitcoin only, ever
fast and cheap spending money in...I don't know yet, but seems like plenty of options at the moment
For a start, the bond wouldn't need to be sent to all the users as those use the mint to avoid the costs of self-custody in the first place. Just burn the bond.
Oh, it's here for sure. It just doesn't solve the issues people think it would solve.
I bet Calle doesn't disagree with any of the OP's points. He himself often criticizes people who over-promise aspects of e-cash.
Can you connect those words more clearly for me?
it is theoretically possible to own money on L2 without owning a UTXO on L1, using rollups. this approach has not been completed yet, but I wouldn't dismiss the possibility. owning a UTXO and going to a custodian is a false choice.
Ecash is the purest/leanest form of money as data. It can probably not get any leaner than just a text string.
Trust without guards or third parties is central to many relations (also over the internet) where value is exchanged, for example any provider-user relation is inherently (partly) trustbased. Blinded Ecash can be an improvement of the risk you face in these relations, also compared to solutions using traditional banking payments.
Because of the points above, and for many other reasons, the payment solutions possible through ecash can be swifter, more private, less burdensome in resources, bigger in transaction throughput than a.o. things like Lightning network, ApplePay, Visa/mastercard
Ecash isn't so much a store of value, but it is up there with the best medium of exchange.
Look at Nimiq wallet and Nimiq Pay app, both of which are self-custodial. Look at integration with a second L1 as a way round a lot of the problems to do with Bitcoin, Lightning Network and ecash.
I've been to more than enough pueblos across Latin America where villagers have been absolutely decimated by shitcoin scams. Almost 100% of the time, victims were hooked into it by a friend or relative. In many cases, people lost their life savings: coffee plantation workers; old ladies... Anybody who thinks that this pattern isn't going to repeat with e-cash is kidding themselves.
if ecash would be important, satoshi would have added it ... he did not ... case closed
MSB is a Western, specifically American concept and law.
Bitcoin is a global network.
Westerners need to stop seeing everything through their own lens when talking about stuff like this.
Different jurisdictions have different laws, and different cultures have different trust models. Assuming the entire planet works the way your mental model does is wrongheaded.
View quoted note →This is the most "left of the bell curve" response...
Once again a fantastic dissection
But there are larger problems like taxes that it may help solve.
So why do you use nostr at all? Ecash is a great way to on board people to nostr to start receiving zaps without using a typical custodian. If you're arguing that all nostr users then should run their own lightning node, then there is no point of using nostr since the network will always be super small
My reaction to some of your points
1) Why does a nym have to doxx himself? Idk who you personally are but your reputation online is sufficient enough for me to take the risk of joining your mint. The amount of sats I would put in your mint is proportional to the amount of trust I have in you. I think the important thing to keep in mind is that I am not putting my entire net worth in this one mint. I am putting a small portion that I am using for day to day transactions and may put more sats in another mint.
2) People want purchasing power, not bitcoin. There aren't enough sats for everyone on earth to open a lightning channel. What good is holding bitcoin if you can't buy anything with it? The important thing is that your savings are under your custody. Having a couple hundred dollars worth of sats in ecash is not going to get me rekt. And you don't have to put all your eggs in one basket. Have some sats in ecash, some in liquid, some on WoS.
3) Tough shit
4) We don't need custodians to switch to ecash. It is an additional tool that you can benefit from. More tools is better. It allows people to make decisions based on the tradeoffs they are comfortable making.
5) Putting some of your bitcoin in an ecash mint is not the same as giving up custody of your bitcoin. And making the bitcoin base chain more private would not work. The reason the blockchain is open and transparent is because Satoshi wanted to make sure there would be no inflation. That was literally the point. If you made the bitcoin blockchain more private, it would be no different from monero. There would be no way to confirm that the supply cap hasn't changed.
Final thoughts
The big difference between a bitcoin standard and a gold standard that most people haven't realized are the custody dynamics. During the gold standard, banks held most or all of people's gold. Getting rugged meant you would lose everything. In a bitcoin standard, these mints would only hold a small portion of your wealth. Getting rugged would suck but it wouldn't ruin your life.
There are no solutions, only tradeoffs. Determine what your risk tolerance is and act accordingly.
Just brainstorming here.
You suggest that an anonymous mint could be trusted if it had more bitcoins locked up in a smart contract than in the wallet for its users provided that the users had a way to grab those bitcoins if their funds don't get honored.
This requires a lot: Knowledge of outstanding IOUs. Knowledge of funds under reserve. The bond being distributed between many users that often might not have significant balances individually, justifying an on-chain transaction. After all that's why many use a mint.
In order to prevent rug-pulls, it does not matter where the funds flow as long as they don't flow to the hacker. By paying out to users, you almost can't prevent the hacker from holding an insane amount of IOUs, diluting all other user's claims. Therefore it's more feasible to just send the bond to a burner address.
NVK made this point on Bitcoin Review
Have not seen it but it’s obvious to people with experience of other cultures like NVK has.
I dont necessarily blame people for only having the perspective of their experiences, but sometimes we gotta make an effort to take a broader view 🤣
Just my personal thoughts but I dont know anyone who thinks esats are better or as good as bitcoin. The worry is what are people going to use who can't afford to use base chain or L2 as fees increase. I don't agree with changes to the protocol or maybe not even L2 to solve these problems.
As it stands now the options outside of this are esats, fiat, or shitcoins, and I know which one I would choose out of that, especially since esats are denominated in sats and change the method of thinking from fiat.
Not getting rugged is the incentive to run a mint. If I'm the CFO of a corporation I would certainly run my own mint to covert incoming payments. running a mint is significantly easier already than running a lightning node. You can do both or use an LSP with your mint.
@OpenSecret has been able to solve real challenges with esats as a hybrid model which I think gives the best user experience across the board right now.
The last part is the big deal because Lightning is stupid.
Yeah I don’t blame them per se. But Bitcoin is global which is one of its huge strengths, ignoring that and seeing everything through a singular western lens is not helpful to Bitcoin and it encourages other Bitcoiners to be myopic which is not helpful to the people who make up the network.
I will look.
Well said
Good point.
Either each minted coin can hold a claim on the bond, and when that coin is redeemed and renewed by the mint, the mint can expire that contract and issue a new uxto that could be redeemed based on some rugpull oracle;
- or -
Rather than transferring custody of the actual sats to the mint, the mint is only in charge of the blind signatures and the token itself contains something like a hodl invoice that is reissued upon each reminting.
That bitcoiners actually entertain the idea of scaling with Liquid is a complete mystery to me.
Next step is scaling with Visa and Mastercard.
How does that work?
2) Dude you know what he means. You're giving up your Bitcoin to custodians for an IOU. The "Ecash is self-custodial" argument is a misdirection.
The same Bitcoiners making such a point over this would NEVER say "technically you're self-custodial because you custody the shitcoin token 🤓" if a custodian took your Bitcoin in exchange for literally any other shitcoin token out there
Didn't read, never stopping (to build).
>You're giving up your Bitcoin to custodians for an IOU.
Yes, we know this. Check below note:
View quoted note →
>The "Ecash is self-custodial" argument is a misdirection.
When someone says "Ecash is self-custodial," they are not denying the statement "You're giving up your Bitcoin to custodians for an IOU." What they mean is that if you lose your ecash, it cannot be recovered. This ecash is the unique proof, and there is no account that can restore it.
>What they mean is that if you lose your ecash, it cannot be recovered. This ecash is the unique proof, and there is no account that can restore it.
I understand this but how does that change anything/why does that matter? Your Bitcoin isn't under your control anymore whether you traded it for ecash or some other shitcoin token.
Good question. Keychat uses ecash sats as stamps for messages. Users do not lose privacy due to payments, and relay servers no longer need to rely on advertising models to make money.
Onchain sats and LN sats cannot achieve this, making it the most suitable application scenario for ecash sats.
View quoted note →Sounds cool, but your answer has little to do with the original topic: Why is it relevant to bring attention to the fact that the IOU (ecash) is self-custodial when the underlying asset itself (Bitcoin) is held by custodians?
ok Seth "showing my face on the biggest bitcoin podcast there is" for Privacy.
stick to your shitcoin then shitcoiner
Ecash isn't an investment, it's a way to improve Bitcoin custodians. It's not a way to get rid of them either.
Cry harder
You don't understand lightning. That's okay.
Hey Plebs,😄
There's an important conversation going on here, folks!🤔 Listening to both sides will improve your understanding of what #Cashu and #eCash are.😆 If you use them, do so wisely, understanding the tradeoffs clearly.🙏🏻😄
Seth For Privacy
Summarizing my thoughts on ecash
For some reason this ecash trend seems to be gaining steam instead of going away, so I'll try my best to detail my thoughts on ecash into one post.
1. The incentives are broken
Ecash finds itself between a rock and a hard place. For users to trust the mint, they need to know that the people behind the mint are trustworthy. If the people running the mint reveal their identities (or even just nyms), they're a trivial target for regulators and law enforcement as it's clear a mint is an MSB.
If the people behind a mint don't reveal their identities or nyms, users of that mint are subject to trivial rug pulls with no recourse. Which do you prefer as a user? Mint operator rug pulls or government rug pulls?
If a mint had been targeted like Samourai Wallet was, instead of just a potential privacy loss, all users would have lost all of their Bitcoin.
2. Ecash is not "self-custodial"
For some reason this concept of ecash being "self-custodial" is a thing, merely because the tokens themselves are self-custodied (and require proper backups of seed phrases etc.) While the lines get a bit weird, it's important to separate two things:
1. The asset people want is Bitcoin, not ecash tokens.
2. The asset people give up custody on is Bitcoin.
The ecash tokens themselves are completely worthless IOUs without the Bitcoin behind them, so even if I can take custody of my ecash tokens, I have 100% given up custody of my sats to a third-party.
Because of this, talking about ecash as self-custodial is disingenuous -- no one wants empty IOUs, they want Bitcoin. When they use ecash they do not have custody of their Bitcoin.
3. Ecash still requires all of the hurdles of Bitcoin self-custody
The hardest hurdle for many people to adopting Bitcoin is the simple first step -- writing down 12 words and making sure not to lose them. With ecash you still have this single greatest barrier of entry as you must backup a seed phrase or secret in order to restore your ecash tokens.
4. There is no incentive for custodians to implement ecash
While a custodian could switch to ecash out of the goodness of their heart, the incentives are broken for custodians. Not only does ecash harm the UX their users are used to (not having to store a secret seed phrase), it also introduces additional infrastructure complexity. Instead of just running a database, now they have to run additional mint software to provide their users with tokens, and handle support cases where users lose their tokens.
In theory a custodian could just also store the seed phrase for their users, but then have we actually improved on custodians at all? They even have custody of the ecash tokens in that case.
5. Custody is a line that cannot be crossed
The core of what makes Bitcoin unique is that we can actually take custody of it ourselves, gaining immense freedom and self-sovereignty through a bit of personal responsibility. Even though I am a massive proponent of building better privacy tools, sacrificing custody to get better privacy is a non-option for me.
Surely we can do better and build privacy tools on top of Bitcoin (or directly into Bitcoin's consensus layer) that allow us to have both privacy and self-sovereignty via self-custody.
I will not give up custody of my Bitcoin, no matter what, and you shouldn't either. "Better custodians" are just custodians with extra steps, and still strip us of self-sovereignty and thus freedom.
6. Time is a more scarce resource than even Bitcoin
Even though I have been very outspoken on what I view as a pointless venture, I am not here to stop anyone from building what they enjoy in the space. Devs working on ecash are free to do so as of course I have no control over them, though I fear that time spent on improving custodians is time that we will not get back. It's clear that the US gov and many in the EU are seeking to ramp up their attacks on Bitcoin privacy and self-custody, and our time to build tools to route around them is growing shorter and shorter.
P.S. - None of what I write is a direct attack on any ecash dev, and I have immense respect and personal relationships with most of the people working on this stuff. Respect for an individual doesn't have to mean I agree with them on every avenue they pursue.
Thanks for the thoughts and views, always good to think about things from multiple view points. 🤙🏽
Thanks, that would be doing a lot more than most! I am here for any basic level follow up questions!
I disagree. It all about trade-offs.
Ecash is great for small amounts and I'm pretty sure it will improve over time. To want everything perfect right now is high time preference and FIAT minded.
Give some time to the Free market. They can rug pull my 5$ all they want, It's still cheaper then my credit card.
If someone invent something without trade-off it will be great but until then, ecash is just fine for small transactions.
There IS a perfect match though for private businesses and membership associations to operate Mints withoutt government or centralized rug pulls. Any organization, not serving the general public, can use eCash as an in-house accounting system. Perhaps as payroll systems that can be redeemed into LN sats on-demand by employees for saving or spending outside the 'company', using eCash within their closed system.
Private Membership Associations are another example of where semi-trusted Mint operations can manage identity, reputation, and compliance risks for Members. When joining the Club, ID has to be provided for the signature on the contract to be valid. But only to the witnesses of the contract.
Once that public/private firewall has been passed Members and the Mint are not running a MSB serving the public and therefore are NOT subjuct to the jurisdiction of the Nanny-State charged with protection of the general public. The Hosts are merely providing data storage and transmission services for the Membership.
Thank you Seth for your thoughts. I totally get what you say and agree...
but what about the idea to self custody your wealth in bitcoin and have a very small stake (let's say 100usd or less) in ecash for your daily purchases.
This would already change completly the game because at the moment 99% of the so called "modern" world have their wealth in a bank account (IOU) and some have very little real money in cash.
Actually he mentions some points you pointed out earlier. I guess TL, DR would be “Ecash is not a non-custodial solution.”
*self-custody
L2 blocks are compressed into proofs. a sequencer inserts the proofs into L1 and the state of a smart contract on L1 is transitioned. a few rollups have worked out an escape hatch so that users can retrieve funds if the sequencer dies, and the sequencer cannot steal anyone's money. but we still don't have an implementation for a decentralized sequencer. a rollup with an escape hatch is better than a sidechain, but finishing the decentralized sequencer would make it perfect.
rollups are the most popular L2 scaling solution. there is only one out of the top ten rollups that has less money in it than lightning. a few teams are working on implementing rollups on bitcoin. the implementations won't require bitcoin to have a fork.
This statement should be more accurate and avoid misunderstanding: ecash is custodial and a bearer asset.
The vast majority of people don't necessarily care about the real asset. If they did, usdt won't be as popular as it is today. So point 1 is kinda moot.
TLDR; lots of strawman arguments
1. Gift cards and other rewards systems fit ecash very nicely. As for the other sentiment, you only want the allowed privacy then? Running any sort of digital privacy tool puts you in the State's cross hairs, so that means we should just not use them?
2. I've only seen Tony Giorgio speak as such, it's a stupid take, imho. ofc it's custodial. But let's look at the total addressable market of users. What percentage has custodial rug risk? And then tell me why it's bad that they should receive privacy as well?
3. I don't see how this negates the benefits of ecash. so you're telling me that people can practice seed and key management without their life savings on the line? sounds like a good way to test various recovery implementations.
4. You can backup encrypted copies of ecash in your iCloud, this is the expected use case for users. And ecash IS a database. These are strawmen technical arguments that all custodians already deal with.
5. See all of the above. "better custodians" offer privacy and have all of the same other trade offs as non-better custodians. There is no difference for operational complexity for a custodian running ecash or a database (because, surprise, ecash mints are just a database.) What custodian doesn't run a database? Bitcoin privacy tools don't just vanish because ecash is being adopted and used. We're all glad you won't give up your bitcoin, now let's go talk to a non-technical user just starting out. Do we offer them the more private custodian or the less private custodian?
6. "You're wasting your time because you're not working on the thing that I work on." Have seen the same from other over lightning or Sv2. Reread the second to last paragraph of the Cypherpunk Manifesto.
The unfortunate case is most digital users don't care about privacy or feel that they don't need it so we must build the systems with privacy by default.
Really poor job on the take down as it falls apart when you get into the specifics of the trade offs between custodians and ecash mints.
Custodian:
"Westerners need to stop seeing everything through their own lens when talking about stuff like this"
Take your own advice.
So rich coming from a guy who is simping for a blockchain with these fees 👇 when half the world makes under $10 a day. It's going to get even worse with more adoption.
No shit? In future, TX fees alone will be more money than 99% would ever have.
That’s a feature - not a bug. It’s how the network guarantees security. If you don’t understand that is inevitable then you’re not qualified to discuss.
Those people earning less than $10 a day are never going to access the base layer - they couldn’t afford to today.
They need alternative custody options, like maybe, ecash…
And we’ve gone full circle.
💯
I understand your perspective if you think of eCash as someone's sole method of interacting with Bitcoin. You're not going to have your life's savings in eCash, and if you are, well, let's just say that you'd be very unwise.
There are three areas where ecash is extremely useful:
1) Replacement for Custodial Lightning: This includes services like Alby (before they wisely shifted focus to NWC), Strike, Wallet of Satoshi, etc. For non-technical users, eCash is even simpler to use than Lightning and offers a higher level of privacy. Mints still operate a Lightning node, allowing users to receive Lightning payments.
It's also simpler to backup your ecash, or move it to a different device, and it doesn't require KYC.
Can you be rugged? Of course! But so can any custodial lightning wallet.
2) Replacement for User Accounts: I'm thinking of a future where Nostr and eCash are a complete replacement for any online account. I don't remember who made this argument originally, might have been
@calle , but I thought it was genius. Imagine services like Netflix or Spotify accepting eCash instead of requiring an account. They could run an eCash mint and exchange tokens for Lightning. Users could then pay for n minutes of content with m sats.
This method is private, secure, and potentially better. While there is a risk of being rugged, this is already possible with current systems. Netflix, for instance, can close your account for any reason. At least with eCash, you maintain your privacy.
3) Gift Card or Points System: eCash can also be used as a modern gift card or points system, similar to airline miles or loyalty programs. Businesses could issue eCash tokens as part of their rewards programs, allowing customers to redeem them for goods or services. This system would be more private and flexible than traditional gift cards, and it could be easily integrated into existing loyalty programs.
Again, while there is a risk of being rugged, this is no different from the current risks associated with gift cards or points systems. At least with eCash, users benefit from enhanced privacy and ease of use.
What a ripper thread. Appreciate you all! 💕
Seth For Privacy
Summarizing my thoughts on ecash
For some reason this ecash trend seems to be gaining steam instead of going away, so I'll try my best to detail my thoughts on ecash into one post.
1. The incentives are broken
Ecash finds itself between a rock and a hard place. For users to trust the mint, they need to know that the people behind the mint are trustworthy. If the people running the mint reveal their identities (or even just nyms), they're a trivial target for regulators and law enforcement as it's clear a mint is an MSB.
If the people behind a mint don't reveal their identities or nyms, users of that mint are subject to trivial rug pulls with no recourse. Which do you prefer as a user? Mint operator rug pulls or government rug pulls?
If a mint had been targeted like Samourai Wallet was, instead of just a potential privacy loss, all users would have lost all of their Bitcoin.
2. Ecash is not "self-custodial"
For some reason this concept of ecash being "self-custodial" is a thing, merely because the tokens themselves are self-custodied (and require proper backups of seed phrases etc.) While the lines get a bit weird, it's important to separate two things:
1. The asset people want is Bitcoin, not ecash tokens.
2. The asset people give up custody on is Bitcoin.
The ecash tokens themselves are completely worthless IOUs without the Bitcoin behind them, so even if I can take custody of my ecash tokens, I have 100% given up custody of my sats to a third-party.
Because of this, talking about ecash as self-custodial is disingenuous -- no one wants empty IOUs, they want Bitcoin. When they use ecash they do not have custody of their Bitcoin.
3. Ecash still requires all of the hurdles of Bitcoin self-custody
The hardest hurdle for many people to adopting Bitcoin is the simple first step -- writing down 12 words and making sure not to lose them. With ecash you still have this single greatest barrier of entry as you must backup a seed phrase or secret in order to restore your ecash tokens.
4. There is no incentive for custodians to implement ecash
While a custodian could switch to ecash out of the goodness of their heart, the incentives are broken for custodians. Not only does ecash harm the UX their users are used to (not having to store a secret seed phrase), it also introduces additional infrastructure complexity. Instead of just running a database, now they have to run additional mint software to provide their users with tokens, and handle support cases where users lose their tokens.
In theory a custodian could just also store the seed phrase for their users, but then have we actually improved on custodians at all? They even have custody of the ecash tokens in that case.
5. Custody is a line that cannot be crossed
The core of what makes Bitcoin unique is that we can actually take custody of it ourselves, gaining immense freedom and self-sovereignty through a bit of personal responsibility. Even though I am a massive proponent of building better privacy tools, sacrificing custody to get better privacy is a non-option for me.
Surely we can do better and build privacy tools on top of Bitcoin (or directly into Bitcoin's consensus layer) that allow us to have both privacy and self-sovereignty via self-custody.
I will not give up custody of my Bitcoin, no matter what, and you shouldn't either. "Better custodians" are just custodians with extra steps, and still strip us of self-sovereignty and thus freedom.
6. Time is a more scarce resource than even Bitcoin
Even though I have been very outspoken on what I view as a pointless venture, I am not here to stop anyone from building what they enjoy in the space. Devs working on ecash are free to do so as of course I have no control over them, though I fear that time spent on improving custodians is time that we will not get back. It's clear that the US gov and many in the EU are seeking to ramp up their attacks on Bitcoin privacy and self-custody, and our time to build tools to route around them is growing shorter and shorter.
P.S. - None of what I write is a direct attack on any ecash dev, and I have immense respect and personal relationships with most of the people working on this stuff. Respect for an individual doesn't have to mean I agree with them on every avenue they pursue.
I’m going with on chain single sig and mutisig, lightning for pocket cash, geographical separation of keys/signers/residence. And martyrdom if necessary.
Looks like its also patented,
TIL his name is Seth For Anonymity
You're dodging the main point
You're accusing others of being western-centric when you're literally pushing a crypto that prices out everyone other than westerners being able to use it in a sovereign manner now, but especially as time goes on.
"That’s a feature - not a bug. It’s how the network guarantees security.
If you don’t understand that is inevitable then you’re not qualified to
discuss."
It doesn't matter if you think it's a feature - it's a fact that you even admit is true and the inevitable outcome. Pricing out the rest of the world.
"Those people earning less than $10 a day are never going to access the base layer - they couldn’t afford to today."
Dude you're just making my argument for me. Yes, thanks for admitting again that only westerners can afford to use Bitcoin. We already established that.
And conveniently ignore those that will be pushed out as fees continue rising.
I’m not pushing “a crypto”.
There is Bitcoin, and then there’s a bunch of wannabe imitators that aren’t worth shit.
There is only one digital money that works. It doesn’t work the way you want it to work - boofuckinghoo.
It works. It seperates money and state which is what it needs to do.
Not everyone will be able to interact with it on the base layer - that doesn’t mean we need your shitcoin; it means we need different scaling options which is going to look different in other cultures which operate on different trust models to Western countries.
So no I’m not making your argument for you, you’re making some retarded argument for some unknown shitcoin that I DGAF about because money converges to one and that one was already decided 15 years ago.
Take your noise elsewhere.
In actual practice, custodial lighting is better in everything except user accounts, and even then, it's close.
Wait till the states come for e-cash like they have come for lightning custodians.
Just zapped you from my ecash wallet
😎󠅓󠅑󠅣󠅘󠅥󠄲󠅟󠄢󠄶󠅤󠅓󠅇󠅘󠄠󠅔󠄸󠄲󠅪󠄿󠅙󠄨󠅦󠄽󠅚󠄶󠅤󠅑󠅇󠄥󠄠󠄼󠅝󠄡󠅜󠅉󠅈󠅆󠅚󠅓󠄢󠄶󠄠󠅉󠅈󠅃󠄲󠅟󠅝󠄶󠅠󠅃󠄱󠄱󠅩󠅦󠄨󠅞󠅓󠄦󠅂󠄣󠅥󠅉󠅈󠄳󠄴󠅟󠄢󠄶󠅘󠄱󠅇󠄶󠅪󠅕󠄵󠄲󠅝󠄾󠅝󠄽󠅩󠄾󠅇󠅉󠄠󠅊󠅚󠄵󠄠󠄾󠄢󠄾󠅜󠄾󠄴󠅓󠄥󠅉󠄢󠄹󠄢󠄽󠄴󠅆󠅝󠄾󠅝󠅉󠅧󠅊󠄴󠄾󠅝󠅉󠅪󠅛󠄠󠄽󠄷󠄾󠅜󠄾󠄴󠄶󠅝󠅊󠄴󠄱󠄠󠄿󠄷󠄽󠄣󠄽󠅄󠅔󠅙󠄿󠄴󠅊󠅙󠄿󠄷󠅊󠅘󠄾󠄢󠄵󠅧󠅊󠅝󠄾󠅙󠄿󠅄󠄶󠅚󠄽󠄴󠅉󠅩󠅉󠅇󠄾󠅉󠄹󠅁󠄻󠅠󠅣󠅒󠅊󠅆󠄹󠄣󠅀󠄽󠄷󠄩󠄤󠅥󠅜󠅇󠄹󠄽󠄶󠅦󠅥󠅔󠅣󠅛󠅥󠄝󠅡󠄷󠅇󠄦󠅥󠄦󠅀󠅓󠄦󠄾󠅧󠅉󠄩󠄼󠅘󠅤󠅂󠄻󠄾󠅘󠅉󠅁󠅂󠅘󠅓󠄣󠅘󠄱󠅊󠅄󠅆󠅛󠅉󠅄󠅂󠅘󠄽󠅪󠅅󠄢󠅉󠅄󠅓󠅧󠄾󠄴󠅔󠅝󠄽󠅪󠅉󠄥󠄽󠅚󠅗󠅪󠄾󠅚󠄹󠄢󠄿󠅇󠅅󠄠󠄽󠅚󠅆󠅚󠄽󠄷󠄵󠄣󠄾󠅝󠄽󠄣󠄽󠅚󠅊󠅝󠄾󠄷󠄾󠅜󠄿󠄴󠅗󠄡󠅉󠄢󠅂󠅛󠅊󠅚󠅛󠄠󠅉󠅇󠅅󠅨󠅉󠅄󠄵󠅨󠅊󠄷󠅉󠄤󠄿󠅄󠅆󠅘󠅊󠄷󠄶󠅚󠅇󠄳󠄵󠄴󠄾󠄴󠅙󠄝󠅈󠄤󠄥󠅗󠄡󠅙󠅃󠄧󠄥󠅃󠄻󠄠󠄻󠄠󠅚󠅔󠄧󠅔󠄢󠄵󠄽󠄹󠄽󠅅󠅜󠄧󠄳󠅟󠄠󠄴󠄥󠅟󠅆󠄨󠅤󠅗󠄤󠅊󠅕󠅚󠅉󠅇󠄵󠅁󠅉󠅈󠄾󠄤󠅁󠄴󠅓󠄥󠅉󠅇󠄽󠄠󠄾󠅄󠅗󠅧󠄾󠅪󠄶󠅛󠄽󠅚󠅅󠄤󠄾󠅄󠅘󠅛󠄾󠄴󠄵󠅨󠄾󠄷󠄽󠄣󠄽󠄢󠄺󠅚󠄾󠄷󠄺󠅝󠄿󠅇󠄵󠅧󠄿󠅇󠄽󠅩󠄽󠅄󠄱󠅨󠄽󠄴󠅓󠅪󠅊󠅄󠄱󠄤󠄾󠅪󠅊󠅝󠅉󠅪󠄱󠅩󠄽󠅝󠄹󠄠󠅉󠅄󠅓󠅩󠄿󠅄󠅁󠅨󠄾󠄴󠄽󠄣󠄾󠅝󠄶󠅘󠅉󠄡󠅗󠅘󠄱󠄧󠅨󠅛󠄸󠅄󠅀󠅊󠅟󠄲󠅖󠅘󠄧󠅃󠄸󠅠󠄢󠄾󠅜󠅖󠅧󠄤󠄷󠄩󠄺󠄴󠅁󠅡󠅤󠄳󠅣󠅢󠄨󠅧󠅚󠄼󠅨󠅤󠄵󠅨󠅛󠅡󠅗󠄝
