This is a transcribed excerpt of the “Bitcoin Magazine Podcast” hosted by P and Q. In this episode, Obi Nwosu joins them to talk about the difference between Fedimint and Fedi and how Chaumian Mints can be used to reach millions of people. into bitcoin.
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Q: The idea of what Fedi was like – what inspired you and the team to say, “Hey, here’s the problem. How will we solve it? And this is how we will solve it. “
Obi Nwosu: There’s Fedimint and then there’s Fedi. So, Fedimint is this open source protocol, the same way Bitcoin is a protocol for store or value. Lightning is a protocol to transfer that bitcoin at low cost at high speed and also increase privacy as a side effect. Well, Fedimint is a protocol for storing that value, keeping that value with incredible privacy in such a way that you are effectively using your community to support each other. They work really well together. Effectively, they’re all Layer 2. When your coins are at rest, you store it in Fedimint, and when your coins are on the go, you use Lightning. But the money is the bitcoin underneath both.
It’s the Fedimint protocol.
That really has its roots – actually, if you go back 39 years, we have Chaumian ecash and then 13 or so years with the invention of Bitcoin and then four or five years ago with Blockstream’s popularity of the linking technology used for Liquid. When those are combined, some amazing cypherpunks and cryptographers have found we can put these together and get the Chaumian ecash – invented by David Lee Chaum in 1983, considered catnip for cryptographers, one of the best forms of security technology out there – combine it with the best form of money, bitcoin, the first many people can hold and federations let you link this Chaumian Mint to bitcoin as backing instead of US dollars, that was David Chaum’s original effort.
Work started three or four years ago and there are several projects running in parallel, but my current co-founder, Eric Sirion, is working on a project called Fedimint. About two years ago, Blockstream saw it, got really excited about it, started sponsoring him, and about a year ago I saw it when I – and I don’t mention this, I did UK’s longest running bitcoin exchange. At one point I had 70% of the UK market, the whole New York Stock Exchange had to gasp. And we are the first regulated exchange in Gibraltar, all of that. But that is the past now. But while selling that company, I am looking to get people off the exchange because I am increasingly concerned that liquidity will bring liquidity and there will be an increasing concentration around exchanges. Translate.
I can see the kind of Orwellian future where there are half a dozen exchanges, each with a billion users with full visibility, just as bad as countries with CBDCs (banking digital currencies). central) because this is where we’ll end up if we keep going the way we’re going. So we need an alternative to exchange custody.
Now the obvious alternative is first-party guardianship, i.e. do-it-yourself guardianship, but if you just look at the numbers and if you look at the attitudes of the people we receive found that with the best will in the world, you get 5% of people, maybe 10% [doing] self-custodial, but that still leaves 90-95% stuck in these exchanges.
So I’m looking for a solution to get people to stop swapping. I attended the Hackers Congress last year. I ran into Eric by chance. We had a conversation. I have suggested some of my ideas. He politely told me why they weren’t working and then I asked him what he was doing. He told me about Fedimint and he considers it amazing security technology, but with my exchange operator hat, I realized that this is really a solution to make people leave the exchange – if structured correctly. That’s where I got involved, I started cheering for it, and I talked about it at Bitcoin Miami. That led to Alex Gladstein asking me to go to the Oslo Freedom Forum to talk about it more.
Then I met some of the bravest men and women I’ve ever had the opportunity to meet, human rights activists and defenders from around the world. You may have met, like if you go to Ghana, hopefully you are there, you will see Farida Nabourema from Togo, such as Fadi Elsalameen from Palestine, Roya Mahboob from Afghanistan, who founded the first female robot team in Afghanistan when women weren’t allowed to study, and so on and so forth, and the list goes on. They all recognize that the problems and challenges they are facing around the world, whether it is Latin America, Africa or the post-Soviet parts of the world, even though they seem very different. each other, and the dictatorships they are fighting against, seem to be diverse, all with one common theme: Those groups use weaponized money and through high/hyperinflation and many other mechanisms. They realized that if they wanted to fight these forces, they needed to be able to control their own money. So they are not Bitcoiners, but they come to Bitcoin because they need to solve a problem, but they are having a problem of scale.
They want to roll these out to millions of people at scale quickly in many of these regions. And what I realized is that only Fedimint can do that. That was in May. It comes from, Fedimint is an amazing open source protocol that we are supporting and allowing to grow natively, but I went back on June 1, talked to them – and now Now the co-founders have grown with myself, Eric and Justin Moon, an incredible soul mate. I explained what I had seen and observed and who I spoke to, and we all agreed that we needed to speed this up. And so Fedi was born. Fedi’s goal is to take Fedimint as the base protocol and accelerate bitcoin adoption to billions of users in the years to come because we can’t wait any longer. We have a technology that enables rapid bitcoin deployment with incredible privacy, high level of security, and direct integration with Lightning. So why are we waiting? There’s no reason why. And that is where Fedi’s journey begins.