Ecash on Bitcoin
Cashu new frontiers
Cashu open source contributor
BitcoinSeoul 2025
Agenda
- Ecash recap & unique properties of ecash
- New developments in Cashu
What is ecash?
No Ledger
Distributed Ledger
Bearer Token
UTXO
Public transactions
Blinded transactions
Decentralized Blockchain
Centralized verification
Trusted
Trustless
Ephemeral transactions
Eternal transactions
What is ecash?
Layer 3?
What is ecash?
Layer 1
Layer 2
Layer 3?
What is ecash?
Layer 1
Layer 2
Layer X
Layer 3?
What is ecash?
Layer 1
Layer 2
Layer X
Shitcoins
💩
FIAT
💵
Credentials
In simple terms:
I have some peice of data (that is the ecash)
How does it work?
In simple terms:
I send the ecash 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
Solution!
I have made a copy of the
ecash
Ecash mint
Please invalidate this and give me a new one
"Ecash swap"
1. User creates blinded secret
2. Mint signs blinded secret
(and "destroys" input ecash)
3. User un-blinds signed secret
The link between "input" and "output" is broken, ensuring default privacy
signed secret == ecash
"LN-Ecash swap"
We can use other inputs or outputs, to swap into or out of ecash
Why?
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...
On-Chain Vault
+ Maximum security
+ Non-Interactive
- Does not scale (for whole planet)
- Expensive and slow
high value transfer/storage
|
|
|---|
Off-Chain Checking
transfer/pay/storage
+ Unilateral exit
+ Instant receiveable
- Big Liquidity lockup required (by ASP)
- VTXO Expiry (online requirement)
+ trustless
+ Instant settlement
- Liquidity constraint (channels)
- Interactive
eCash Wallet
micro payments/spending
+ Instant & efficient
+ Private
- Custodial
- Centrally managed
Lift
Channel open
Invoice
FIAT
Bitcoin
Different tools have different trade-offs
💵
🏦
📃
+ Fast & convenient
- Risk of theft
+ "Secured" by bank
- Fractionally reserved
+ Get some yeld
- Funds locked up
+ Fast & convenient
- Risk of rug
+ Fast, self custodial
- "Hot wallet"
+ Maximum security
- Unpredictable costs
Ecash - A different custodial model
No Ledger/No accounts
Ledger/Accounts
Hard to track
Tracks per default
keeps Transaction history
Out of band transaction
"Forgot password" backup
Seed phrase backup
PoL/PoR possible
Users can't audit
P2P transactions
Transactions handled on server
Pros and cons of ecash as a custodial system
Low complexity
Requires seed backup
Protocol based
Legality (Jurisdiction)
Metadata is users responsibility
Better privacy
No auto balance "Syncing"
Offline capabilities
PoL/PoR possible
Paradigm shift
Programmable
...
Pros
Cons
Hard to seize/censor
New developments in cashu!
Offline tokens
Online
Alice
Bob
Mint
Get pubkey
Mint locked ecash
Send ecash
Offline (QR)
Verify offline
- Pubkey lock
- unique secret
- Refund timelock (buffer)
- dleq
Redeem before refund timelock expires
Multi-mint lightning payments
Blinded Auth
Blind Auth
Clear Auth
Ecash
Ops
Obtain blind auth token with OIDC
Consume blind auth token to authorize mint interactions
Tap-to-send ecash [R&D]
Thank you!
npub1cj6ndx5akfazux7f0vjl4fyx9k0ulf682p437fe03a9ndwqjm0tqj886t6
Let's keep in touch on nostr