FediMint Adds New Bitcoin Custody Solutions Cryptocurrency

Disclaimer: The author is a partner of Ten31, who co-led the Fedi round.

The below is a direct extract from Marty’s Bent Publish #1241: “Fedi is here to create a consumer app based on FediMint.” Subscribe to the newsletter here.

We’ve been covering FediMint’s development at Marty’s Bent for just over a year now. FediMint is an open-source protocol that allows groups of individuals to create federated Chaumian Mints on Bitcoin. When individuals send bitcoins to these federated mints, they receive Ecash tokens that represent different denominations of sats. In return, they can then send them within the mint to other users with a high degree of confidentiality. Once users are inside the federation and transacting with Ecash tokens, federation members do not know who is transacting with whom. It’s a very creative way to give end users better privacy while creating an environment where bitcoin can expand to billions of people.

Last week Obi Nwosu, Eric Sirion and Justin Moon announced the launch of Fedi, an open-source wallet and trading company they are building that leverages the open-source FediMint protocol to bring an extremely friendly to those desperate for the utility of bitcoin as a distributed network with a solid monetary good. As I’ve been saying for over a year, this is one of the most exciting areas of development in the Bitcoin stack. It expands the design landscape for those looking to create unique Bitcoin experiences without having to make protocol-level changes. It brings much-needed privacy tools to bitcoin users around the world, but especially those living under repressive regimes who desperately need transaction privacy coverage to reduce the risk of persecution. It also offers better custody guarantees compared to centralized exchanges, helping move users toward full-fledged self-custody.

When discussing how Chaumian Mints can be leveraged to bring increased utility to the Bitcoin stack, most focused on the simple use case of receiving and sending Ecash tokens – which represent different sats denominations – privately and scalably. What’s even more exciting is that the modular nature of the FediMint protocol will allow individuals to build more complex use cases into their mint offerings, if they choose. 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 this year. summer of 2023. Simplicity has been talked about for a long time within the Bitcoin developer community and is something that many would like to see implemented in the protocol, but seems to have a very low probability of happening at this point. With the emergence of FediMint, it looks like Simplicity might find its way to Bitcoin, just at a different part of the stack than expected.

This is just the tip of the iceberg of things that could potentially be built on top of FediMint. It will be interesting to see what the Fedi team brings to market with their trading products. If you want to know 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 information on how everything works that and how it can progress from here. .