Definition
Ecash (electronic cash) is a class of bearer-token money in which value is represented by cryptographic tokens that can be passed directly from one holder to another, like physical cash, rather than recorded as account balances. The concept traces to David Chaum's 1980s work on untraceable payments. Modern Bitcoin-backed ecash systems issue tokens that are 1:1 redeemable claims against bitcoin held by an issuer, combining the privacy of cash with the settlement assurance of an underlying asset.
How ecash preserves privacy
The defining property of ecash is unlinkability: the issuer signs tokens without learning their serial numbers, so when a token is later redeemed the issuer cannot connect it to who originally received it. This is achieved with a blinded signature scheme. Because tokens are bearer instruments, holding one is equivalent to holding the value it represents — there is no account, login, or balance the issuer can see.
The custody trade-off
Ecash is fast, final, and offline-capable, but it is not trustless in the way base-layer Bitcoin is. A holder trusts the issuer (the "mint") to honor redemptions and not to inflate the supply. This makes ecash a practical layer for small, frequent, private payments rather than long-term self-custody, and it pairs naturally with the Lightning Network for funding and redemption.
Two leading Bitcoin ecash designs are Cashu, which uses single-operator mints, and Fedimint, which distributes the mint across a federation of guardians. Both lean on blinded signatures for privacy.
In Simple Terms
Ecash (electronic cash) is a class of bearer-token money in which value is represented by cryptographic tokens that can be passed directly from one holder…