Oddbean new post about login | logout Why ecash is so much better than your normal custodian: - it can be audited as easily as any custodian - users have way better privacy - users can make payments peer to peer - it supports smart contracts - it works half-offline (sender or receiver) - it's more efficient to run - individual users can't be singled out: either censor and rug everyone or no one Why it's worse: - if the user vanishes, there is no way to recover their funds - users need seed phrases and recovery of lost funds is more cumbersome than a simple username + password login (Both cons are basically a consequence of privacy)
How do you imagine ecash being used in non technical groups? Just like custodial LN?
Liquidity routes between mints seems to be a weak point…
That's Lightning
ecash is VERY HARD TO USE that's the fact limiting its growth beyond experiments for now with some custodial dependency by ordinary users
What makes it hard to use?
Based on its disadvantages, it seems not suitable for large value transactions. Would you agree ?
It's custodial, I wouldn't use it for large amounts in the first place.
"- it can be audited as easily as any custodian" You mean proof of liabilities? I remember hear you on parallelni polis during the pizza day a couple of years ago about this; its already a reality?
Proof of liabilities is what makes it *better* (i.e. publicly) to audit than a normal custodian.
But its what you mean with "- it can be audited as easily as any custodian"? Trying to understand the underlying concept
Auditing with custodial systems typically meant that you get an "expert" and show them your database and they say "ok". You can do the same with ecash and much more than that.
A ok, I see. But there's an idea around audits to make them more accessible/transparent, or its like, me as a mint, I could invite a choosen auditor to decide if my mint is okay or not okay?
Yes, there is an idea on the horizon and it will require some work but it's possible: https://gist.github.com/callebtc/ed5228d1d8cbaade0104db5d1cf63939
i agree with you. i would accept the consequences of better privacy
You forgot: - if the mint vanishes, all you have is some random strings and they have your Bitcoin.
this is exactly how a custodian works. I WoS vanishes, all you have nothing at all of the promised sats.
exactly. It is just terrible.
yes, but no. I wouldnt have in any occasion more then 30000 sats distribuited across different mints, ecash dont replace self custodial lightning nodes to stack more sats, and even dont replace the onchain cold storage. Frankly if one of the 3 mints rug my 10000 sats its terrible, but not so terrible. Theres space for improvement in making proof of lyabilities easy and to implement some clean game-theory solituon to make the trust easyer to reach and avoid rugs (microfees and web of trust are a good starting point...).
In order to get the ecash, you need to send an onchain transaction to open a lightning channel, pay onchain fees, then send btc to the mint on lightning, pay fees on that again, then you get the ecash which needs to be withdrawn later - all that for $5? Whats the use case for buying something with ecash for $5?
no, you dont id you cant afford: you can buy with fiat or exchange some other resources or wokr directly for ecash, like you can use $ without depositing gold in a bank. Then, when you exceed the amount that is ok to have in a bank you can buy a some liquidity for a non-custodial channel by some provider and start your stack. If, at some point, you will reach an amout that have sense to detain in a on-chain utxo, you can swap. Today bitcoiners joined ecash by the path: on-chain ----> lightning ----> ecash but in the future the path would be probably the opposite, and I think would be a good way to scale bitcoin adoption, with ecash neo-banks replacing old banks.
So, we replaced bank brand old with bank brand new. The future of finance is here!
I updated my reply with why I think is actually cool.
expressing in different words, an improvement is the possibility to delegate settlement of the transactions to mints, making it more efficient. Routing from a bank to another would be smooth, user would need to transact p2p in real life without need to think anything, its cash, it just works (unless it, at some point, will not work like when the bank is offline and so on... But this problem seems all solvable with time and developing new solutions)