Derived from Forklog, Cashu is a Layer 2 eCash protocol for Bitcoin that allows users to transfer satoshis without on-chain records. It uses blind signatures to protect user privacy, enabling tokenized transactions that resemble physical cash. Users can send and receive tokens via Lightning Network, with no transaction data stored on the blockchain. The protocol is inspired by David Chaum’s eCash and uses a mint-wallet model where users choose trusted mint operators. Cashu tokens are bearer assets, and losing wallet data results in permanent loss of funds. The protocol integrates with BTCPay Server for merchants to accept Cashu payments. However, privacy is limited at the network level, and metadata like IP addresses may still be collected. Users are advised to use Tor or a mixer like Mixer.Money to enhance privacy when exiting the Cashu system.
Cashu Protocol Explained: How It Enhances Bitcoin Privacy
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Summary
Cashu protocol offers a new way to send Bitcoin with privacy. Built as a Layer 2 eCash system, it uses blind signatures to hide transaction details. Users can transfer satoshis via Lightning Network without on-chain records. The protocol, inspired by David Chaum’s eCash, works with a mint-wallet model. Merchants can accept Cashu through BTCPay Server. However, metadata like IP addresses may still be tracked. For better privacy, users should combine Cashu with Tor or a mixer. Cashu protocol explained, it’s a bearer asset system—lose your wallet, lose your funds.
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