Casey Rodarmor [ARCHIVE] on Nostr: 📅 Original date posted:2021-06-27 📝 Original message: Dear Lightning Devs, ...
📅 Original date posted:2021-06-27
📝 Original message:
Dear Lightning Devs,
Chaumian mints, or blind mints, are a potentially interesting way to make
hosted lightning wallets more private and secure, and I recently wrote a blog
post on the topic that I wanted to share with the list:
https://rodarmor.com/blog/lightning-mints/
It is also reproduced below for convenience.
Self-hosted Lightning wallets present distinct usability challenges not present
in on-chain wallets, such as channel and liquidity management, which may make
hosted wallets a popular option. Given that, I think the problem of making
these wallets more private and secure deserves attention, and blind mints may
provide nice solutions to these problems.
Another site of interest is fedimint.org, which has some additional information
on blind mints in the context of Bitcoin and Lightning.
Best regards,
Casey Rodarmor
---
Federated blind mints have attractive privacy, scaling, and security properties
that are highly complementary to those of Bitcoin and the Lightning Network.
I originally became interested in blind mints while thinking about Lightning
Network wallet usability issues. When Lightning works, it is fantastic, but
keeping a node running and managing a wallet present a number of challenges,
such as channel unavailability due to force closes, the unpredictability of the
on-chain fee environment, the complexity of channel backup, and the involved
and often subtle need to manage liquidity.
All of these problems *are* tractable for a skilled node operator, but may not
be soluble in the context of self-hosted wallets operated by non-technical
users, hereafter *normies*. If this is the case, then normies may have no
choice but to use hosted Lightning wallets, compromising their privacy and
exposing them to custodial risk.
Chaumian mints, also known as Chaumian banks, or blind mints, offer a
compelling solution to these problems, particularly when operation is
federated. Chaumian mints, through the use of blind signatures[0], have
extremely appealing privacy properties. The mint operators do not know the
number of users, their identities, account balances, or transaction histories.
Additionally, mint transactions are cheap and can be performed at unlimited
scale.
Mint implementations, typified by eCash[1], have hitherto been centralized, and
thus, like all centralized, custodial services, expose users to custodial risk
in the form of operator absquatulation and mismanagement. To fix this, mint
operation can be federated, with all operations performed by a quorum of nodes
controlled by different parties.
Despite these interesting properties, Chaumian mints have largely been
forgotten. This post[2] gives an excellent overview of the phenomenon. I
believe that Chaumian mints are currently severely underrated in general, and
in particular deserve consideration as a potential avenue for improving
custodial Lightning Network wallets.
Compared to a naïve hosted Lightning Network wallet, a service operated as a
federated Chaumian mint offers excellent privacy, usability, security, and
scaling.
**Privacy:** Privacy leaks from a Lightning mint come in two forms, *internal*
and *external*, when an mint operator or an outside actor, respectively,
observes sensitive information.
Blind signatures protect against internal privacy leaks, making them a strict
improvement in that respect over custodial Lightning wallets.
When compared to a single-user Lightning network wallet, Lightning mints also
protect against external privacy leaks. If the activity of a single-user
Lightning Network wallet can be observed, which is possible but non-trivial,
all such activity is preemptively that of the owner of the wallet. However,
similar to a standard custodial Lightning Network wallet, any observable
Lightning Network activity of a Lightning mint is the aggregate activity of its
users, who thus form an anonymity set. If the number of users, and thus the
anonymity set size, is large, external privacy leaks are also prevented.
**Usability:** Compared to a self-managed Lightning Network wallet, and similar
to a standard custodial Lightning Network wallet, Lightning mint wallets offer
superior usability. A user need not be concerned with the details of node
operation or channel management, and can deposit to and withdraw from their
account with standard Lightning Network invoices.
**Security:** The security of a Lightning mint is weaker than that of a
self-hosted wallet. A quorum of federation members can abscond with funds.
However, compared to a standard custodial Lightning Network wallet, security is
greatly improved. Additionally, federations members might be located in
different jurisdictions, making the mint robust to regulatory interference.
Furthermore, members might be entities with online reputations, such as
anonymous Bitcoin Twitter users with an established history of productive
shitposting, providing further assurances against mismanagement and fraud.
**Scaling:** Mint operations are extremely lightweight, similar to Lightning
Network transactions, so scaling properties are similar to the Lightning
Network itself. Additionally, users need not manage their own channels, so a
well-capitalized federation can open channels efficiently, lowering the
per-transaction channel management overhead.
**Interoperability and market dynamics:** Additionally, my hope is that such
systems will be developed with a standardized protocol for communication
between wallet interfaces and mint backends. This would allow users to use
different backends the same local wallet interface, encouraging competition in
the market.
For more discussion of Chaumian mints and their applicability to Bitcoin, see
fedimint.org[3]. Elsirion, the author, is also at work on MiniMint, a federated
Chaumian mint with Bitcoin and eventually Lightning Network support.
To close with a bit of speculation, I believe that Chaumian mints were never of
particular interest of importance because they were limited to interoperating
with the fiat currencies of the time. With the ascendance of Bitcoin, mints now
have access to a powerful, decentralized, and uncensorable currency , made
economical and fast by the Lightning Network.
I believe this layering of Chaumian mints on top of Bitcoin and the Lightning
Network will, in the fullness of time, be demonstrated to be enormously
powerful, and make Chaumian mints themselves worthy of renewed study and
consideration.
[0] https://en.wikipedia.org/wiki/Blind_signature
[1] https://en.wikipedia.org/wiki/Ecash
[2] https://opaque.link/post/digitalmoneydbc/
[3] https://fedimint.org
📝 Original message:
Dear Lightning Devs,
Chaumian mints, or blind mints, are a potentially interesting way to make
hosted lightning wallets more private and secure, and I recently wrote a blog
post on the topic that I wanted to share with the list:
https://rodarmor.com/blog/lightning-mints/
It is also reproduced below for convenience.
Self-hosted Lightning wallets present distinct usability challenges not present
in on-chain wallets, such as channel and liquidity management, which may make
hosted wallets a popular option. Given that, I think the problem of making
these wallets more private and secure deserves attention, and blind mints may
provide nice solutions to these problems.
Another site of interest is fedimint.org, which has some additional information
on blind mints in the context of Bitcoin and Lightning.
Best regards,
Casey Rodarmor
---
Federated blind mints have attractive privacy, scaling, and security properties
that are highly complementary to those of Bitcoin and the Lightning Network.
I originally became interested in blind mints while thinking about Lightning
Network wallet usability issues. When Lightning works, it is fantastic, but
keeping a node running and managing a wallet present a number of challenges,
such as channel unavailability due to force closes, the unpredictability of the
on-chain fee environment, the complexity of channel backup, and the involved
and often subtle need to manage liquidity.
All of these problems *are* tractable for a skilled node operator, but may not
be soluble in the context of self-hosted wallets operated by non-technical
users, hereafter *normies*. If this is the case, then normies may have no
choice but to use hosted Lightning wallets, compromising their privacy and
exposing them to custodial risk.
Chaumian mints, also known as Chaumian banks, or blind mints, offer a
compelling solution to these problems, particularly when operation is
federated. Chaumian mints, through the use of blind signatures[0], have
extremely appealing privacy properties. The mint operators do not know the
number of users, their identities, account balances, or transaction histories.
Additionally, mint transactions are cheap and can be performed at unlimited
scale.
Mint implementations, typified by eCash[1], have hitherto been centralized, and
thus, like all centralized, custodial services, expose users to custodial risk
in the form of operator absquatulation and mismanagement. To fix this, mint
operation can be federated, with all operations performed by a quorum of nodes
controlled by different parties.
Despite these interesting properties, Chaumian mints have largely been
forgotten. This post[2] gives an excellent overview of the phenomenon. I
believe that Chaumian mints are currently severely underrated in general, and
in particular deserve consideration as a potential avenue for improving
custodial Lightning Network wallets.
Compared to a naïve hosted Lightning Network wallet, a service operated as a
federated Chaumian mint offers excellent privacy, usability, security, and
scaling.
**Privacy:** Privacy leaks from a Lightning mint come in two forms, *internal*
and *external*, when an mint operator or an outside actor, respectively,
observes sensitive information.
Blind signatures protect against internal privacy leaks, making them a strict
improvement in that respect over custodial Lightning wallets.
When compared to a single-user Lightning network wallet, Lightning mints also
protect against external privacy leaks. If the activity of a single-user
Lightning Network wallet can be observed, which is possible but non-trivial,
all such activity is preemptively that of the owner of the wallet. However,
similar to a standard custodial Lightning Network wallet, any observable
Lightning Network activity of a Lightning mint is the aggregate activity of its
users, who thus form an anonymity set. If the number of users, and thus the
anonymity set size, is large, external privacy leaks are also prevented.
**Usability:** Compared to a self-managed Lightning Network wallet, and similar
to a standard custodial Lightning Network wallet, Lightning mint wallets offer
superior usability. A user need not be concerned with the details of node
operation or channel management, and can deposit to and withdraw from their
account with standard Lightning Network invoices.
**Security:** The security of a Lightning mint is weaker than that of a
self-hosted wallet. A quorum of federation members can abscond with funds.
However, compared to a standard custodial Lightning Network wallet, security is
greatly improved. Additionally, federations members might be located in
different jurisdictions, making the mint robust to regulatory interference.
Furthermore, members might be entities with online reputations, such as
anonymous Bitcoin Twitter users with an established history of productive
shitposting, providing further assurances against mismanagement and fraud.
**Scaling:** Mint operations are extremely lightweight, similar to Lightning
Network transactions, so scaling properties are similar to the Lightning
Network itself. Additionally, users need not manage their own channels, so a
well-capitalized federation can open channels efficiently, lowering the
per-transaction channel management overhead.
**Interoperability and market dynamics:** Additionally, my hope is that such
systems will be developed with a standardized protocol for communication
between wallet interfaces and mint backends. This would allow users to use
different backends the same local wallet interface, encouraging competition in
the market.
For more discussion of Chaumian mints and their applicability to Bitcoin, see
fedimint.org[3]. Elsirion, the author, is also at work on MiniMint, a federated
Chaumian mint with Bitcoin and eventually Lightning Network support.
To close with a bit of speculation, I believe that Chaumian mints were never of
particular interest of importance because they were limited to interoperating
with the fiat currencies of the time. With the ascendance of Bitcoin, mints now
have access to a powerful, decentralized, and uncensorable currency , made
economical and fast by the Lightning Network.
I believe this layering of Chaumian mints on top of Bitcoin and the Lightning
Network will, in the fullness of time, be demonstrated to be enormously
powerful, and make Chaumian mints themselves worthy of renewed study and
consideration.
[0] https://en.wikipedia.org/wiki/Blind_signature
[1] https://en.wikipedia.org/wiki/Ecash
[2] https://opaque.link/post/digitalmoneydbc/
[3] https://fedimint.org