Do you know what is Cashu?

Cashu is an open-source "ecash" (electronic cash) protocol built on top of Bitcoin. It was designed to bring more privacy, speed, and anonymity to Bitcoin transactions, functioning as a kind of "digital cash" that mimics the properties of physical money. The idea is based on the "ecash" concept created by David Chaum in the 1980s, but adapted to the Bitcoin ecosystem. How does it work? Cashu operates with two main components: Mint: An entity (which can be anyone or any organization) that issues digital tokens called "ecash." These tokens are backed by Bitcoin deposited into the mint via the Lightning Network (a second-layer solution for fast and cheap Bitcoin transactions). Wallet: Users store these tokens in their own digital wallets, as if they were banknotes in their pocket. When you deposit Bitcoin into a mint, it gives you ecash tokens in return. These tokens can be used to make instant, private transactions between users or services without leaving traces on the Bitcoin blockchain. Later, you can redeem those tokens for Bitcoin if you wish. What makes it special? Privacy: Cashu uses a technique called "blind signatures," which prevents the mint from knowing who is spending the tokens or where they’re going. It’s like using physical cash: no one knows whose bill it is or how you spent it. Speed: Ecash transactions are instant and nearly cost-free because they happen off the main Bitcoin blockchain, typically via the Lightning Network. Flexibility: Anyone can set up a mint and issue tokens, making the system decentralized and accessible. Practical example Imagine you want to buy a coffee from a friend who accepts Cashu. You deposit 1,000 satoshis (the smallest unit of Bitcoin) into a mint and receive a 1,000-sat ecash token. You send that token to your friend anonymously, and they can either use it or redeem it for Bitcoin back at the mint. The mint doesn’t know who you are or who you sent the token to. Limitations Custody: The mint is a point of trust. You need to trust that it will honor the tokens and not run off with the deposited Bitcoin. Not a Bitcoin replacement: Cashu isn’t an alternative to Bitcoin itself but a tool to enhance privacy in custodial systems. In summary, Cashu Bitcoin is an extra layer in the Bitcoin ecosystem that enables fast, private, and anonymous transactions, like digital pocket money, but it still relies on trust in the mint operator. It’s ideal for micropayments, anonymous donations, or situations where you want more privacy than Bitcoin alone provides. submitted by /u/FunWithSkooma [link] [comments]

Apr 10, 2025 - 20:07

Cashu is an open-source "ecash" (electronic cash) protocol built on top of Bitcoin. It was designed to bring more privacy, speed, and anonymity to Bitcoin transactions, functioning as a kind of "digital cash" that mimics the properties of physical money. The idea is based on the "ecash" concept created by David Chaum in the 1980s, but adapted to the Bitcoin ecosystem.

How does it work?

Cashu operates with two main components:

Mint: An entity (which can be anyone or any organization) that issues digital tokens called "ecash." These tokens are backed by Bitcoin deposited into the mint via the Lightning Network (a second-layer solution for fast and cheap Bitcoin transactions).
Wallet: Users store these tokens in their own digital wallets, as if they were banknotes in their pocket.

When you deposit Bitcoin into a mint, it gives you ecash tokens in return. These tokens can be used to make instant, private transactions between users or services without leaving traces on the Bitcoin blockchain. Later, you can redeem those tokens for Bitcoin if you wish.

What makes it special?

Privacy: Cashu uses a technique called "blind signatures," which prevents the mint from knowing who is spending the tokens or where they’re going. It’s like using physical cash: no one knows whose bill it is or how you spent it.
Speed: Ecash transactions are instant and nearly cost-free because they happen off the main Bitcoin blockchain, typically via the Lightning Network.
Flexibility: Anyone can set up a mint and issue tokens, making the system decentralized and accessible.

Practical example

Imagine you want to buy a coffee from a friend who accepts Cashu. You deposit 1,000 satoshis (the smallest unit of Bitcoin) into a mint and receive a 1,000-sat ecash token. You send that token to your friend anonymously, and they can either use it or redeem it for Bitcoin back at the mint. The mint doesn’t know who you are or who you sent the token to.

Limitations

Custody: The mint is a point of trust. You need to trust that it will honor the tokens and not run off with the deposited Bitcoin.
Not a Bitcoin replacement: Cashu isn’t an alternative to Bitcoin itself but a tool to enhance privacy in custodial systems.

In summary, Cashu Bitcoin is an extra layer in the Bitcoin ecosystem that enables fast, private, and anonymous transactions, like digital pocket money, but it still relies on trust in the mint operator. It’s ideal for micropayments, anonymous donations, or situations where you want more privacy than Bitcoin alone provides.

submitted by /u/FunWithSkooma
[link] [comments]