Crypto glossary
Chaumian ecash (Fedimint, Cashu)
Chaumian ecash is a system of private bearer tokens backed by bitcoin, issued by a mint that cannot see who spends them; Cashu and Fedimint are examples.
The idea dates back to cryptographer David Chaum's blind signatures in the early 1980s. A user deposits bitcoin, usually over Lightning, with a mint, which signs tokens without seeing them. Later, anyone holding a token can redeem or transfer it, and the mint can verify its own signature without linking it to the original deposit. That gives strong privacy for payments inside the mint.
Cashu uses a single operator per mint and is simple to run, while Fedimint spreads custody across a federation of guardians who must jointly approve actions, often trusted community members. Both connect to Lightning so users can pay and receive outside the mint. Supporters see ecash as a way to give communities cheap, private bitcoin payments without each user managing channels.
Ecash is custodial: the mint or federation holds the bitcoin and could run off with it, be hacked or be shut down by authorities. Tokens are bearer instruments, so losing the device can mean losing the money. Mints may face regulatory pressure as money transmitters, and users must trust that a mint is not issuing unbacked tokens.
Example
A village community runs a Fedimint with five guardians; residents deposit bitcoin and pay each other in ecash with complete privacy, using Lightning only to pay outside merchants.