Minimint, a Privacy-Focused, Community-Led Scaling Solution for Bitcoin, is being sponsored by Blockstream. Minimint introduces to Bitcoin the concept of blinded federated mints or Chaumian banks.
Families and other communities might prefer the Federated mints more for a better local as well as streamlined banking experience of the Bitcoin, in which using a completely centralized custodial service or running one’s own node might not be available nor wanted. Federated mints bring a custody solution that focuses on the Bitcoin community.
The Federated Mints will also help preserve the identities and data of its members, their wallet balances, and also other confidential information like the transaction history of the members. This can be done automatically with the use of blind signatures.
What are the Federated Mints?
The Federated Mint majorly comprises members who are independent, and who have created a multisig wallet. These independent members participate in a distributed and blind custodianship. The funds involved are not allowed to be moved or controlled except according to the rules and code of conduct laid out as per that particular federation or group. When the independent member makes the deposit, the mint then blindly issues a note or a redeemable receipt which can then be easily exchanged for Bitcoin. The traders also have an option to trade these blinded notes or receipts amongst the other traders. The federated mint will not be able to tell to which member the note or receipt was an issue or the time when it was spent. This allows a fully untraceable exchange of payment and deposits just like how the cash works.
Integration of Lightning with Federated Mints
Lightning users currently have limited choices- it is either opt for self-host or either rely on a centralized hosting service. For most users, it is too much of a challenge technically to run their own node and a wallet. Even if they handle the technical difficulty, it might not be easy access to them because of their living situation. With the integration of Lightning into the Federated mints, the users can easily have an access to a privacy-conscious and trust-minimized wallet solution. The new lightning-enabled federated mints will help in more interoperability and a broader network. This new standardized model will be suitable for mass adoption purposes.
Currently, the Minimint project is a work in progress, where the individual users who are working on similar concepts can collaborate to build blinded mints on the Lightning network and the Bitcoin.