Fed Raises $17 Million in Bid to ‘Accelerate Bitcoin and Lightning Adoption’
Tech startup Fedi has raised $17 million in an effort to make Bitcoin easier for beginners to use and understand through the use of private and scalable “federations.”
“Fedi, as a company, aims to empower communities everywhere by accelerating the adoption of technologies like Bitcoin and Lightning – and rolling out Fedimint federation to communities and companies around the world is how we intend to do that,” Fedi CEO and co-founder Obi Nwosu told Decrypt.
Fedimint confederation is a Bitcoin cryptographic tool that allows users to set up communities – which can consist of friends, neighbors, businesses, or any other loosely connected group of people – to hold Bitcoin and Lightning together.
Going back a minute, Bitcoin stands out from traditional digital money because it allows users to be in control of their assets, rather than trusting them in the hands of a third party. It’s a bit like digital cash. But most users end up storing their money on exchanges or custodial wallets anyway because self-storage takes time to learn.
Fedi wants to use federation to offer a way to use Bitcoin that is simple and provides users with more security than traditional Bitcoin wallets. It works because instead of just one custodian being in charge, the Fedimint protocol allows power to be distributed among a number of custodians, making it harder for a single entity to run away with the funds.
“The key benefits of the Fedimint protocol are that it provides an incredibly powerful yet simple way to use Bitcoin without requiring a single point of trust or control, it allows Bitcoin to scale to billions of users, and it enables developers to extend the functionality of the Bitcoin ecosystem more powerfully and easily than current smart contract, DeFi and Web3 solutions on alternative blockchains,” said Nwosu.
In addition, Fedi claims to provide more privacy than the most popular Bitcoin wallets. Under the hood, the Fedimint protocol hides who is part of a federation and how much Bitcoin each user has, so that the custodians cannot see any of these details.
Fedi also has plans to go beyond Bitcoin with a “federated operating system” that would allow “a Fedi user to take control of their money and data using one or more trusted federations of their choice,” Nwosu said.
“One of Fedi’s built-in features will be a wallet, but chat, web browsing and application execution will also be significant features,” he added. The team plans to release an Alpha version of its product aimed at developers by the end of the month.
