Oddbean new post about login | logout Liquid is corporate Bitcoin. Lightning is nerd Bitcoin. eCash is anarchy
Im late to the party, how is eCash working?. It's already a rela thing?
It works a bit like Coinbase but more private and wallets can hold both Coinbase, Binance and ropiliti tokens if you happen to run a mint and you typically can swap between them using lightning. On a more technical level, the mint blind-signs tokens that you generate but don't reveal to them, so the mint doesn't know a serial number or anything. Now when you pay Alice, she receives your token that is signed by your mint. She instantly "buys" a new token from that mint and pays with the token you gave her. This way, you can't pay somebody else with the same token and the mint cannot know it was you who created the original token. If Alice prefers a different mint or LN or Liquid, she has to pay the mint for an LN payment to some swap service - often integrated in the mint.
Liquid is custody by one centralized, opaque group of functionaries with transparecy over your coins and their backing still being there - until it's maybe gone one day. But it has quite good privacy properties. The liquid blockchain does incur a moderate cost per transaction, making it unsuited for small payments. ECash is custody by groups or individuals with no transparency whatsoever. A mint could award you a billion Bitcoin tokens without owning a single UTXO. But eCash has excellent privacy properties. Lightning is unconfirmed UTXOs that can get replaced a million times without incurring an on-chain fee. Getting the right one confirmed is the tricky part which makes it inferior to on-chain UTXOs. Lightning is what currently bridges between the three, allowing you to pay LN invoices with eCash or Liquid wallets.
Well well, that sounds great, thank you! Now, where can I start? Wich wallet I must use? A good video or website for a good beginner guide?
As you might have noticed, I was advocating for LN. I like Phoenix for Android but dislike that they take quite a fee for LN payments, making it often cheaper to pay the on-chain fee than to use LN.