A community custody protocol, Fedimint wants to scale the Bitcoin network to a billion users located in the global south.
“Bitcoin is for billions, not billionaires,” a phrase first coined by investment researcher Lyn Alden, could soon become a reality, according to Fedimint.
The protocol that aims to scale Bitcoin (BTC) while making it more private, has been buoyed by a $4.2 million seed round for the Fedi application.
Cointelegraph spoke to Obi Nwosu, co-founder and CEO of Fedi, about the “incredible group of inspiring people who we are working with to support their activities to increase the freedoms of some of the most oppressed regions of the world,” and why the mobile app Fedi could solve issues related to scaling, custody and privacy.
Lyudmyla Kozlovska, head of the Open Dialogue Foundation — which focuses on supporting people in post-soviet Europe — Farida Bemba Nabourema, a Togolese human rights activist, and Fadi Elsalameen, president of the Palestinian Security Project and a fellow at the Foreign Policy Institute at the Johns Hopkins School of Advanced International Studies, support the Fedi app’s development and its impact in the global south and emerging economies.
In brief, the Fedi wallet app connects users to Fedimint “federations.” The Fedimint protocol (which takes its name from “federated” and “mint”) uses multi-signature (multisig) technology and trusted community members called “guardians.”
How Fedimint “federations” combine. Source: Twitter
Nwosu told Cointelegraph that Fedi hopes to have the biggest impact on those located in the global south, and that the firm is “uniquely placed to help which is why we will put special focus on deploying into these communities.”
Farid Nabourema, a Togolese human rights activist, explained to Cointelegraph that in “poor parts of the world,” acquiring a hardware wallet is near impossible. Hardware wallet distributors including Ledger, ColdCard and Trezor are not present on the continent of Africa, despite the fact that “Africa has the fastest growing adoption rate and Togo, for example, was listed among the top 10 countries having the fastest adoption per capita based on the 2021 Chainalysis report.”
The Fedi app may go some way in resolving these issues, allowing for greater exposure to Bitcoin in Africa, Nabourema continued:
“Fedimint solves a lot of our problems in one system. It offers us an extra layer of security to keep bitcoin purchase and ownership totally decentralized, anonymous and offers an extra layer of ownership.”
Nabourema details that the “federated wallet method” takes inspiration from the traditional savings methods used across Africa and emerging markets in the Caribbean and Latin America. Known as a “tontine” in francophone West Africa, a “sousou” in Nigeria, or a “zu-zu” in Trinidad and Tobago, these community savings tools help thousands of people to plan for their future. It’s among the oldest peer-to-peer savings technologies:
“This model has helped millions of people, especially women who were traditionally excluded from the banking system to fund their businesses, their children’s education, to acquire properties among others.”
Fedimint uses this community-backed approach to finance but uses a decentralized, immutable currency i.e. Bitcoin. “In addition, Fedimint adds an extra layer of security and more importantly privacy as the custodians can keep the amount they own totally private from others,” Nabourema highlights.
Nourou, the founder of Bitcoin Senegal — a grassroots Bitcoin adoption campaign located in the populous West African city of Dakar — told Cointelegraph that Fedimint’s community-backed approach is a reflection of how certain Bitcoin enthusiasts run nodes.
Nonetheless, the way in which the groups of trusted community members called “guardians“ interact with Bitcoin using Fedi remains unclear at this stage and could pose risks, he explained:
“In this instance, guardians would have more powers than others on the network, which could create centralization challenges. Plus, there could be a risk of certain people abusing their elevated responsibilities.”
Nwosu explained that “Fedimint is a federated custody protocol that complements the Bitcoin monetary protocol and Lightning payments protocol to provide a complete solution to holding, using, and securing Bitcoin at global scale.” Community custody is a brand new development in the Bitcoin protocol while multisig, (in which two or more signatories are required to move Bitcoin), has existed for almost a decade.
Although Africa is a clear candidate for Bitcoin scaling and community-backed advancements, Nwosu told Cointelegraph that Leopoldo Lopez, the Venezuelan opposition leader who co-founded the political party Primero Justicia in the year 2000, has also shown interest. Reportedly, the solution that Fedi poses could “meet the needs of the people in Latin America at scale.”
Nabourema concluded that Fedimint will be “a lifesaver for millions of citizens living in developing worlds and most importantly those that face brutal authoritarianism at the hands of their government which tends to control their money and how they use it.”