How-to Guide: Running Ecash Mint ScrgruppEn

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A PDF brochure of this article is available for download.

Chaumian ecash, a privacy-preserving payment system, was conceptualized in the early 1980s and is known to be the first cryptocurrency ever invented. Although this technology experienced a period of dormancy, the emergence of Bitcoin has revived interest in this technology. As we step into an era increasingly concerned with digital privacy, electronic money is experiencing a renaissance, primarily due to our discovery of Bitcoin as the underlying financial layer of the Internet.

Cashu allows e-money to be used on Bitcoin, enabling ordinary users to run mints connected to the accelerator network. This allows everyone to offer completely private and untraceable Bitcoin payment services to their peers, social circles, or larger communities.

Chaumian Mint uses a technology known as blind signatures, which obscures user activities from the custodian running the service. When users make a payment via the Lightning Network, users receive cash that is stored as chunks of data on their devices, much like physical cash. These ecash tokens, denominated in satoshis, can be exchanged between users or converted back into payment on the Lightning Network with the help of the mint.

An important advantage of ecash is that transactions between users can take place through any means of communication, such as a chat client or QR code, with the mint not being involved in the actual token exchange. This ensures that the Mint is oblivious to the details of the transaction, including who dealt with whom. Even while withdrawing funds from the Mint, the identity of the user remains anonymous.

Cashu integration promises a world of near-perfect privacy in the world of Bitcoin custody. This tutorial explains how you can set up and run Cashew Mint today and become a blind uncle yourself.

Casho on LNbits

The easiest way to run Cashu mint is through the LNbits Cashu extension. To do this, you already need a Lightning node with LNbits installed. If you are using popular node distributions like Umbrel, find and install the LNbits app. Once you set up LNbits, it only takes a few clicks: Go to the extension overview, find the Cashu extension, install it and enable it. You should now see the extension available to all users of your LNbits instance.

As a user, click on the extension and create a new Cashu Mint. Enter the details of your mint and select the back wallet that will be used to fund the mint. That’s it! You can copy the mint URL and use it with any Cashu wallet, e.g Nutstash.app or Cashu.me.

Be careful, you are responsible for keeping your mint running and the funds deposited in this wallet safe. You also need to manage your node well so that users can easily make and receive payments on the Lightning Network. Additionally, you also have no way of knowing your users’ activity. This means that you are unable to specifically censor anyone from using your mint. The Chaumian Mint maintains privacy to the point that censorship is practically impossible.

Cashew in short

The most advanced way to run Cashu Mint today is to use the so-called reference application Briefly. For this, you first need to clone the GitHub repository and follow the instructions for setting up your Python environment in the readme file.

Once your environment is ready, you should set up your Mint settings which includes connecting it to the Lightning backend. Currently, you can use any LNbits instance as a Lightning backend (which in turn allows you to use all popular Lightning node implementations). In the near future, you will also be able to use your Lightning node directly without the need for the LNbits middleware. However, at the moment, this is the recommended method since LNbits allows you to separate access to your node funds into dedicated wallets and thus acts as an extra layer of security in case something goes wrong.

To set up your own Mint preferences, copy the sample configuration file .env.example to .env and edit the following entries in the file:

# network setting

MINT_LISTEN_HOST=127.0.0.1 # Use 0.0.0.0 for global access

MINT_LISTEN_PORT=3338

#Lightning funding source

MINT_LIGHTNING_BACKEND=LNbitsWallet

MINT_LNBITS_ENDPOINT=https://legend.lnbits.com

MINT_LNBITS_KEY=Your LNbitsAPI key

Note that if you just want to experiment (or develop) and not connect your Mint to the accelerator network, you can use the backend type “MINT_LIGHTNING_BACKEND=FakeWallet” which will treat all invoices as paid automatically. It’s great for trying things out!

Finally, we set some contact details so our users can reach us if something goes wrong, and we also set some security limits so that only small bills can be created at our mint.

MINT_INFO_NAME=”CashU Magazine in Bitcoin Magazine”

MINT_INFO_DESCRIPTION=”Hide your madness with a Bitcoin journal”

MINT_INFO_DESCRIPTION_LONG=”This mint is being used for a special event hosted by Bitcoin Magazine. Please withdraw your funds at the end of the event.”

MINT_INFO_CONTACT=[[“email”,”contact@me.com”], [“twitter”,”@me”], [“nostr”, “npub…”]]

MINT_MAX_PEG_IN=10000 # 10 thousand sat maximum per invoice

Remember that you cannot identify individual users. This means, if you want to close your mint again, you have to give every user the opportunity to withdraw themselves. Add the setting “MINT_PEG_OUT_ONLY=TRUE” to your config file so that linking is only allowed if you want your mint to be closed.

This article was published in Bitcoin Magazine “The issue of withdrawal.” Click here to subscribe now.

A PDF brochure of this article is available for download.

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