Fedimint

Fedimint is a place to discuss and build federated chaumian e-cash on Bitcoin. Decentralised Bitcoin custody for the world.

“Fedimint” is an abbreviation of the words, “federated” and “mint.” The concept was originally conceived in 1983 by renowned computer scientist and cryptographer, David Chaum, and later used to create e-cash, a primordial, albeit centralized, version of today’s cryptocurrencies. E-cash used blind signatures to preserve user privacy. Blind signatures allow a sender’s message to be cryptographically blinded (or hidden) before being digitally signed by the recipient, thereby preserving the sender’s anonymity.

Fedi’s other co-founder, Sirion, was fascinated by these early developments and contemplated adding two key components from the Bitcoin ecosystem to Chaum’s e-cash protocol. The first component was the idea of federations – pre-existing groups of Bitcoin users with high levels of trust in each other (for example, family members, friends, and community groups). The second component was the use of multisignature functionality to solve e-cash’s centralization flaw. Incorporating these components into Chaum’s original idea gave birth to Fedimint – a community-based Bitcoin custody protocol.

We already have a protocol for decentralized censorship-resistant money – that’s Bitcoin. We also have a protocol for decentralized censorship-resistant payments – that's Lightning. The final missing piece is a decentralized, censorship-resistant custody protocol. That protocol is Fedimint.

Fedimint accepts bitcoin deposits and returns minted tokens to the federation member making the deposit. The number of tokens minted for each bitcoin is based on a predetermined rate set by the federation. Tokens can then be used off-chain to pay for goods and services, or simply exchanged between members. This off-chain activity allows for scaling beyond Bitcoin’s on-chain constraints.