Author: elsirion 2021-06-29 12:22:00
Published on: 2021-06-29T12:22:00+00:00
A discussion about federated mint has been going on for some time, with the focus on replacing blinded signatures with blinded credentials. The use of tokens of the same denomination in traditional mints is inefficient, so introducing blind signatures committed to a separately blinded amount would allow one big anonymity set over all tokens instead, which could then be combined in a similar way to liquid transaction inputs. However, there are still obstacles to overcome, including the use of KVACs which do not allow client-side validation and building an enhanced threshold blind signature scheme which is more complex, needing further research. Another idea called "nodelets" has also been introduced, allowing for a coordinator that can be a separate entity or any nodelet of the node. Blind multisig or threshold credentials would improve the privacy of the system, but the protocol's complexity and online requirements make it suboptimal for non-technical users. Both systems have different target audiences, with federated mints seen as a replacement for banks and other custodial services used for their superior UX. While Bitcoin Beach currently uses Galoy, a centralized hosted LN wallet without much privacy, if community-driven federations with privacy built-in were allowed, most risks inherent to custodial wallets could be mitigated. Despite its early stage, the idea of federated mint is promising, and those interested are encouraged to help build this future.
Updated on: 2023-06-03T04:15:23.879242+00:00