What is Cashu?
Cashu is an open-source protocol that turns bitcoin into digital bearer tokens you can pass around privately—like handing over cash—without leaving a trail on the blockchain. It’s built on Chaumian eCash: a design that uses blind signatures so the issuing server (a “mint”) can’t link the tokens it creates with the tokens it later redeems. Payments happen off-chain, typically funded and settled via Lightning, so they’re fast and inexpensive.
In Bitcoin terms: you deposit sats to a mint (usually over Lightning), receive blinded eCash tokens, and then you can spend or pass those tokens to someone else. When a recipient wants to exit back to bitcoin, they “melt” the tokens—redeem them at a mint for a Lightning payout. The mint knows a redemption happened, but—thanks to blinding—can’t link it to any specific prior issuance.
How privacy works: blind signatures in a nutshell
Cashu implements Chaumian eCash using a Blind Diffie-Hellman scheme. You present a blinded token to the mint; the mint signs it without seeing the underlying value/serials. Later you unblind the signature, giving you a valid token that the mint will honor—yet the mint cannot connect that spend to the original issuance. This unlinkability is the core privacy property.
Because the tokens are bearer assets (the data is the money), there’s no public ledger of your activity, and routine transfers don’t touch the blockchain at all. That’s why Cashu is often described as “cash-like” for the internet.
Meet the components: mints, wallets, and NUTs
- Mints hold the bitcoin reserve and issue/redeem tokens. Anyone can run one; users choose which mints to trust. Cashu deliberately avoids federation at the protocol level, unlike Fedimint.
- Wallets are apps that store and transfer your tokens. Popular options include Nutstash (web), Minibits (mobile), and Macadamia (iOS). Some support seed-phrase backups and Nostr-based sending.
- NUTs (Notation, Usage & Terminology) are the protocol specs: key discovery, fees, minting, swapping tokens between users, melting (redeeming to Lightning), and more. Interoperable apps follow these NUTs.
Why Bitcoiners care: the practical benefits
- Privacy by default: No on-chain addresses or Lightning invoices are publicly tied to your identity during p2p token transfers; the mint can’t link issuance ↔ redemption.
- Speed & cost: Most activity is off-chain, so payments are near-instant and extremely cheap—great for tips, micro-commerce, and community treasuries.
- Simplicity: From a user’s perspective, you’re just sending a “note” worth some sats. That lowers the learning curve compared with managing channels or L2 routing.
Bitcoin development circles have been discussing eCash designs for years; Optech’s topic hub and newsletter threads summarize the tradeoffs and why blind-signature systems are seeing renewed interest.
The trust model
Cashu is custodial at the mint level. You trust a mint to hold bitcoin 1:1 for the tokens it issues and to redeem honestly later. The protocol maximizes privacy, not trustlessness. That’s the main tradeoff. Users typically manage this risk by:
- Choosing reputable mints (or running their own).
- Spreading balances across multiple mints.
- Treating Cashu wallets like spending wallets, not cold storage.
If you want federated custody (shared among guardians), look at Fedimint; if you want maximum simplicity and agility, Cashu’s solo-mint approach keeps deployment lean.
Where Lightning fits in
Most mints use Lightning both to receive your deposit (“minting” tokens) and to pay you out when you redeem (“melt” tokens). That gives Cashu bitcoin’s reach with near-instant settlement. As Lightning expands (including stablecoin experiments), Cashu inherits those rails for on/off-ramps.
Security and backup tips
Because tokens are bearer, protecting local data matters. Good practice:
- Enable seed backups if your wallet offers them (Cashu Nutshell, Macadamia, etc.). A seed lets you restore your eCash balance and mint connections
- Store small, spendable amounts; keep savings in self-custody or multisig.
- Diversify across mints; choose ones with transparent operators or community reputation. Some projects publish FAQs that emphasize seed security and mint choice.
Common questions
Is Cashu “on-chain”?
No. Transfers of tokens between users are off-chain. Only deposits and redemptions touch Lightning (which itself settles to Bitcoin). That’s a big part of why Cashu is fast and private.
Can a mint spy on me?
A mint sees that it issued or redeemed tokens, but blind signatures prevent linking a specific issuance to a specific redemption. This thwarts the usual “who paid whom” analysis—assuming you avoid correlating metadata (like signing in with the same account everywhere).
What if a mint disappears?
That’s the core risk of any custodial service. Spread balances, keep them small, and prefer mints you can evaluate. Some communities run their own mints, which reduces counterparty exposure for local use.
Does Cashu replace Lightning?
No—Cashu rides on Lightning for in/out rails. It’s complementary: Lightning for networked settlement; Cashu for private, cash-like transfers.
How Cashu is standardized: NUT specs
Developers don’t have to guess how wallets and mints should talk. The NUTs define cryptography and flows:
- NUT-00: Cryptography & models
- NUT-01/02: Mint public keys, keysets & fees
- NUT-03: Swapping tokens between users
- NUT-04/05: Minting (deposit) and melting (redeem)
- NUT-06: Mint info & metadata
That’s why different apps can interoperate as long as they follow the spec.
Why this matters now
There’s growing interest in privacy-preserving payments that still feel simple. Bitcoiners have used coinjoins and Lightning for years, but Cashu brings a cash metaphor that regular people understand—pay, pass, redeem—without invasive data trails. Articles and explainers from Bitcoin builders and media outlets highlight Cashu’s goal: cash-like privacy with Bitcoin liquidity.
And because Cashu is open and lightweight, it’s showing up in experiments—from browser wallets and iOS clients to games and community tools listed in “awesome-cashu.” Expect more niche apps where privacy and simplicity matter (events, tipping, vouchers, humanitarian payments).
Conclusion
Cashu is Bitcoin-backed eCash: fast, cheap, and private by design. You trust a mint with custody, but blind signatures ensure the mint can’t link your issuance and redemption, cutting off the usual surveillance paths. If you keep balances small, pick reputable (or self-hosted) mints, and use wallets with reliable backups, Cashu can be a practical privacy layer for everyday spending—without the friction of on-chain fees or channel management.
If you’ve ever wished sending bitcoin could feel as casual as handing a banknote across a counter, Cashu is that experience—cash-like payments, internet-speed, powered by Bitcoin and Lightning.