Originally invented by cryptographer David Chaum in 1990, eCash in a Fedimint context is digital money fully backed by bitcoin and issued by federations that acts like physical cash: it can be transacted cheaply, instantly, and privately.
eCash notes are not bitcoin but rather IOUs representing claims on bitcoin. When you deposit bitcoin into a federation either via on-chain or Lightning, you receive an equivalent amount of eCash.
You can use this eCash to transact privately with other members of the federation or redeem it later for bitcoin. Payments within federations use eCash, while transactions into or out of a mint use bitcoin.
eCash payments are kept anonymous using a method called blind signatures, meaning federation guardians cannot see who is sending or receiving funds or any individual's balance. Guardians can only see how much total bitcoin the federation holds and how much total eCash has been issued.
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