FediMint Adds New Bitcoin Custody Solutions – Bitcoin Magazine
Disclaimer: The author is a venture partner in Ten31, which led Fed’s seed round.
Below is a direct excerpt from Marty’s Bent Issue #1241: “Fedi is here to bring a consumer app build on FediMint.” Sign up for the newsletter here.
We’ve been covering the development of FediMint in Marty’s Bent for a little over a year now. FediMint is an open source protocol that enables groups of individuals to create federated Chaumian Mints on Bitcoin. When individuals send bitcoin to these federated coins, they receive Ecash tokens that represent different rate values. In return, they can then send these within the mint to other users with a high degree of privacy. When users are inside the association and trade with Ecash tokens, association members do not know who is trading with whom. This is a very creative way to give end users better privacy while creating an environment where bitcoin can scale to billions of people.
Last week, Obi Nwosu, Eric Sirion, and Justin Moon announced the launch of Fedi, an open source wallet and commercial company they are building that leverages the open source FediMint protocol to provide an extremely user-friendly wallet and bundle of services to those in desperate need of Bitcoin’s utility as a distributed network with a solid economic good. As I’ve been saying for over a year, this is one of the most exciting areas of development happening across the Bitcoin stack. It expands the design landscape for those who want to build unique experiences on Bitcoin without having to make changes at the protocol level. It brings much-needed privacy tools to bitcoin users worldwide, but especially to those living under repressive regimes who desperately need transactional privacy coverage to reduce their chances of being persecuted. It also provides better custody assurances compared to centralized exchanges, helping nudge users down the path toward full-fledged self-custody.
When discussing how Chaumian Mints can be leveraged to add utility to the Bitcoin stack, most have focused on the simple use case of receiving and sending Ecash tokens – representing different values of stake – in a private and scalable way. What is even more exciting is that the modular nature of the FediMint protocol will allow individuals to build more complex use cases into their coin offerings, if they wish. For example, Justin Moon and others injected Simplicity, “a low-level programming language with greater flexibility and expressiveness than Bitcoin Script,” into a Chaumian Mint created with FediMint during the Bitcoin++ hackathon earlier in the summer of 2022. Simplicity has been talked about for a long time in the Bitcoin developer community and is something many would like to see implemented in the protocol, but it appears to have a very low probability of happening at this time. With the rise of FediMint, it appears that Simplicity may find its way into Bitcoin, just on a different part of the stack than expected.
This is just the tip of the iceberg of things that can potentially be built on top of FediMint. It will be interesting to see what the Fedi team brings to market with their commercial products. If you want to learn more about how FediMint works and what the Fedi team has planned with their first wallet, I recorded an episode of TFTC with the team that will give you more insight into how this all works and how it can evolve from here.
