A Secure Way to Store Your Bitcoin
Today's Highlights
- Fedi - storing your bitcoin in a decentralized manner
- Today's Infographic
- In Other News - a few interesting developments we're tracking.
Fedi - storing your bitcoin in a decentralized manner
Hardcore bitcoiners would say that one can only truly own the bitcoin when the user stores it themselves, not entrusting to anyone else. But noncustodial storage is not easy to get right, and the idea of not having a reliable backup plan if they lose your keys – a private code consisting of a series of alphanumeric characters to provide access to the bitcoin – might make them feel as uncomfortable as storing the life savings under a mattress: In both cases, the loss would be permanent and irreversible.
Fedi is approaching bitcoin custody with an assumption that, although full self-custody is the best solution, most people would choose to trust someone else to keep their bitcoin safe. Someone the user trusts who helps them set up the wallet and buy the first bitcoin, so that they don’t worry about making a mistake and losing their money. Fedi is building a product to help communities store bitcoin together and simplify crypto transactions between members. Using an open-source protocol called Fedimint, Fedi is offering a compromise between the comfort of custodial storage and autonomy of self-custody: outsourcing backup storage to people they personally know and trust.
The concept of Fedi is that once a community – or “Federation” – has pooled their bitcoin together, they can mint tokens –fm-BTC eCash notes – running on top of the Bitcoin blockchain, and use those tokens for payments inside the community, while the bitcoin backing them is sitting inside the joint custodial wallet. This way, payments in the community will be faster and more private because they will be invisible to outside observers, unlike bitcoin transactions that can all be seen on a public blockchain. A community can also agree to store other things in a joint backup wallet using Fedi. If they use decentralized identity tools, they can store backups for their credentials in joint storage instead of keeping them in a Google Docs or Dropbox file. They also can manage a joint cloud file storage for content important to this community.
Eric Sirion, Justin Moon, Obi Nwosu are the co-founders of Fedi. They have raised a total of $21.2M in funding.