Think of it like the relationship between gold and the dollar, back when banks would issue dollars as a "receipt" of the gold that was on deposit with the bank, and anyone carrying that receipt could turn it back into the bank to get the gold out.
eCash works in a similar way. A mint receives real sats as a deposit, typically via lightning, but it could be on-chain too, and they issue/mint eCash tokens to the one who deposited the sats. Just like USD, they can transact with anyone willing to accept the eCash as payment directly and privately, even offline, simply by transferring the tokens to that person's eCash wallet, which can hold tokens from any mint.
The big difference with eCash compared to the gold/USD reserve relationship of the past is, if someone DOESN'T want to receive your eCash as payment, you can easily have the mint that gave you your tokens send them sats via Lightning instead by turning your tokens back in with the mint to be burned.
Obviously, this means you are putting a lot of trust in the mint to honor your request to redeem their tokens back into sats when you want to transfer them out of the mint. It is a custodial relationship where you are holding IOUs that are only as good as the mint is honest. Great for small amounts, but I wouldn't trust it with anything more than I would keep as cash in my physical wallet.
Dikaios1517
npub1ku…v3lhe
2025-04-04 19:20:02
in reply to nevent1q…evms
Author Public Key
npub1kun5628raxpm7usdkj62z2337hr77f3ryrg9cf0vjpyf4jvk9r9smv3lheSeen on
wss://relay.brightbolt.netwss://relay.primal.netwss://relay.nostrplebs.comwss://nostr.winewss://relay.damus.ioPublished at
2025-04-04 19:20:02Event JSON
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"content": "Think of it like the relationship between gold and the dollar, back when banks would issue dollars as a \"receipt\" of the gold that was on deposit with the bank, and anyone carrying that receipt could turn it back into the bank to get the gold out.\n\neCash works in a similar way. A mint receives real sats as a deposit, typically via lightning, but it could be on-chain too, and they issue/mint eCash tokens to the one who deposited the sats. Just like USD, they can transact with anyone willing to accept the eCash as payment directly and privately, even offline, simply by transferring the tokens to that person's eCash wallet, which can hold tokens from any mint.\n\nThe big difference with eCash compared to the gold/USD reserve relationship of the past is, if someone DOESN'T want to receive your eCash as payment, you can easily have the mint that gave you your tokens send them sats via Lightning instead by turning your tokens back in with the mint to be burned.\n\nObviously, this means you are putting a lot of trust in the mint to honor your request to redeem their tokens back into sats when you want to transfer them out of the mint. It is a custodial relationship where you are holding IOUs that are only as good as the mint is honest. Great for small amounts, but I wouldn't trust it with anything more than I would keep as cash in my physical wallet.",
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