Epic: Linking DIDs to Cashu Tokens #38
Description
Author: Sat
I did a short exploration with Gemeni regarding DIDs and Cashu and a couple found interesting use cases for the system.
Lock token to a DID's public key
Linking identity to something designed to be anonymous seems counterintuitive, but it's a powerful feature for specific scenarios.
Here's how you can link a DID to a Cashu token:
Pay-to-Public-Key (P2PK) Locks: This is the most elegant and secure method. The Cashu protocol allows for ecash tokens to be "locked" to a specific public key. To redeem or spend the token, the owner must provide a signature from the corresponding private key.
How it would work:
A user would provide a public key from their DID Document to the Cashu mint. The mint would then issue a Cashu token that is cryptographically locked to that key. The user can receive and hold this token securely, knowing that only they (by proving control of their DID) can spend it.
Contrast this with the cashu token I sent today which could have been spent by anyone who could read it.
The Benefit:
This transforms an anonymous bearer token into a "non-custodial" token that is securely owned by a specific DID. It prevents theft even if the raw token data is exposed. You can send a payment to someone's DID knowing only they can claim it, even if they are offline.
Verifiable Credentials (VCs):
You can use a VC to create a verifiable link between a DID and a Cashu token without embedding anything in the token itself.
How it would work:
An entity (like a mint or an exchange) could issue a Verifiable Credential to your DID. The credential's claims could state: "The subject, did:example:12345, was issued a Cashu token with proof [proof_details] on [date]."
The Benefit:
This method allows you to prove the origin or ownership of your anonymous ecash when needed, without compromising the privacy of the token in everyday use. It's useful for regulatory compliance, accounting, or proving the source of funds in a trust-minimized way.