Cashu is a Chaumian ecash protocol built on Bitcoin and Lightning Network, enabling private, instant, and low-fee payments through cryptographic tokens.

How It Works

Cashu uses blind signatures to create untraceable ecash tokens:

  1. Minting: Users deposit Bitcoin/Lightning to a mint and receive blinded tokens
  2. Spending: Tokens can be transferred peer-to-peer without mint involvement
  3. Redemption: Recipients redeem tokens at the mint for Bitcoin/Lightning

The mint cannot link deposits to redemptions due to the blinding process, providing strong privacy guarantees.

Key Properties

  • Privacy: Mint cannot track token transfers between users
  • Instant: Transfers happen offline, no blockchain confirmation needed
  • Low-fee: No on-chain fees for token transfers
  • Custodial: Users trust the mint to honor redemptions

Nostr Integration

Cashu integrates with Nostr in several ways:

  • Nutzaps: Ecash tokens sent as zaps with enhanced privacy
  • Escrow: HTLC-based payment escrow for services like ridesharing
  • Wallets: Nostr-native wallets store encrypted Cashu tokens on relays
  • NIP-87: Mint discovery and reviews via Nostr

Trust Model

Unlike self-custodial Bitcoin, Cashu requires trusting mint operators. Users should:

  • Use reputable, well-reviewed mints
  • Keep small balances appropriate to the trust level
  • Understand mints can exit-scam or go offline, taking funds with them