First, everything is tradeoffs. Know that going in.
eCash is really just custodial Lightning with some extra steps, but those extra steps provide some distinct advantages.
In normal custodial Lightning, your custodian has the actual ownership of the sats in their Lightning channels, and they internally keep track of how many of those sats belong to you on their server. You are trusting that they are keeping accurate record of how many sats are owed to you, and not spending or rehypothecating them. They can rug you at any time.
With eCash, your custodian is still the actual owner of the sats in their Lightning channels. They keep track of the total amount of eCash tokens they have issued, but they keep no track of your balance. Your wallet does that using the tokens that it stores as files, either on your device or on a server you control, or on a relay with the tokens locked to your npub. This means you are responsible for keeping track of your tokens, rather than your custodian keeping track of your balance. Lose your tokens and your custodian will not be able to recover them for you since they keep no track of your balance.
This enables eCash to be far more private than custodial Lightning, and the tokens can be transferred to anyone else who is willing to accept them, even offline. And then, when the bearer of the tokens wants to transfer funds out of that custodian, they turn the tokens in and the custodian SHOULD give them sats in return.
However, the custodian can still rug you. You still have to trust that the custodian hasn't spent or rehypothecated the sats your tokens represent.
In self-custody Lightning, you have actual ownership of the sats in your Lightning channels. No one can spend those sats but you. However, it is harder to transact privately with self-custody Lightning, and there is no way to transact offline. Additionally, you bear the responsibility of managing your Lightning channels and making sure you have enough liquidity in the direction you need in order to transact.
Dikaios1517
npub1ku…v3lhe
2025-04-02 17:32:09
in reply to nevent1q…7fne
Author Public Key
npub1kun5628raxpm7usdkj62z2337hr77f3ryrg9cf0vjpyf4jvk9r9smv3lhePublished at
2025-04-02 17:32:09Event JSON
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"created_at": 1743615129,
"kind": 1,
"tags": [
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"content": "First, everything is tradeoffs. Know that going in.\n\neCash is really just custodial Lightning with some extra steps, but those extra steps provide some distinct advantages.\n\nIn normal custodial Lightning, your custodian has the actual ownership of the sats in their Lightning channels, and they internally keep track of how many of those sats belong to you on their server. You are trusting that they are keeping accurate record of how many sats are owed to you, and not spending or rehypothecating them. They can rug you at any time.\n\nWith eCash, your custodian is still the actual owner of the sats in their Lightning channels. They keep track of the total amount of eCash tokens they have issued, but they keep no track of your balance. Your wallet does that using the tokens that it stores as files, either on your device or on a server you control, or on a relay with the tokens locked to your npub. This means you are responsible for keeping track of your tokens, rather than your custodian keeping track of your balance. Lose your tokens and your custodian will not be able to recover them for you since they keep no track of your balance.\n\nThis enables eCash to be far more private than custodial Lightning, and the tokens can be transferred to anyone else who is willing to accept them, even offline. And then, when the bearer of the tokens wants to transfer funds out of that custodian, they turn the tokens in and the custodian SHOULD give them sats in return.\n\nHowever, the custodian can still rug you. You still have to trust that the custodian hasn't spent or rehypothecated the sats your tokens represent. \n\nIn self-custody Lightning, you have actual ownership of the sats in your Lightning channels. No one can spend those sats but you. However, it is harder to transact privately with self-custody Lightning, and there is no way to transact offline. Additionally, you bear the responsibility of managing your Lightning channels and making sure you have enough liquidity in the direction you need in order to transact.",
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}