aLE on Nostr: bullish! nostr:note1270npklesqwf2n2kp8v6qswclxzkectvzfsdqmdwxhfn99kl7phs8q3ege

quoting note1270…3ege

Here is the crazy part: even if you required KYC in an ecash system at every step of the protocol and it would still have amazing privacy.

Mining: Calle mints 1000 sats.

Mint knows Calle minted 1000 sats.

Swapping: Calle sends 500 sats to his friend. Friend swaps them to prevent double-spending.

Mint knows friend swapped 500 sats. Mint does not know that Calle sent 500 sats to friend!

Melting: Friend pays a Lightning invoice for 500 sats.

Mint knows that friend has melted 500 sats.

That's worse privacy than a system without KYC but the transactional ecash pricacy would still remain largely unaffected due to the properties of blind signatures. I'm not saying this is desirable, but remarking an interesting observation. Regulated companies will choose their own policies for operating an ecash system.