Fedemint (A community-driven, self-custodial network)
Fedemint is a self-custodial, off-chain programmability layer on top of Bitcoin, designed to enable scalable and private transactions. Here’s a breakdown of its key features:
- Federated Custody: Fedemint operates as a “Federated Custody” solution, where a group of guardians (referred to as “Federation Guardians”) collectively hold the keys to Bitcoin on behalf of users. This decentralized approach ensures that no single party has control over the funds.
- Ecash: Fedemint uses Ecash, a bearer instrument, as its underlying currency. Ecash operates similarly to cash, allowing users to freely spend it within a specific system (federation). If a user loses or gives away Ecash, they lose the ability to spend it.
- Federation: Each Fedemint federation is its own self-custodial network, with its own Ecash supply. Federations are not interoperable with each other, requiring atomic swaps to move between them.
- Consensus Protocol: The Federation Guardians follow a consensus protocol to manage transactions and ensure the integrity of the system. This protocol allows for decentralized decision-making and prevents any single guardian from unilaterally controlling the funds.
- Private Transactions: Fedemint enables private transactions by using cryptographic techniques, such as blind signatures (inspired by David Chaum’s work). This ensures that Federation Guardians do not know the contents of transactions, maintaining user privacy.
- Scalability: Fedemint aims to improve Bitcoin’s scalability by allowing for off-chain transactions, reducing the load on the blockchain.
- Community-driven: Fedemint is an open-source protocol, developed and maintained by a community-driven effort.
Key differences between Fedemint and other custody solutions:
- Fedemint does not rely on a single key holder or a centralized authority, ensuring decentralized control.
- It uses Ecash as a bearer instrument, rather than a balance in a ledger, providing a more private and secure transaction mechanism.
- The Federation Guardians’ consensus protocol ensures decentralized decision-making, preventing any single party from controlling the funds.
In summary, Fedemint is a decentralized, self-custodial, and private transaction system built on top of Bitcoin, utilizing Ecash and a consensus protocol to enable scalable and secure transactions within a community-driven context.