Understanding the Different Types of Fedimint Setups

Fedimint is the first ecash protocol backed by Bitcoin. However, depending on the level of security, resilience, and cost required, the flexibility of the Fedimint protocol can allow three types of mint: Federated Mints, Federated Single Guardian Mints, and Unfederated Mints. Each type has its pros and cons, which we'll explore below.

Types of Fedimint 

Federated Mints (4+ Guardians Mints) 

Definition: A federated mint is managed by four or more guardians, each responsible for their own Fedimint server. This model is the ideal setup in terms of security and resilience. Federated mints also represent a key innovation over the original ecash protocol first invented in the early 1980s.

Pros:

• Highest Security and Resilience: With a federation of guardians, no single guardian can lose or mishandle the money held in the mint. Also, the loss of or temporary inability to access one or more* guardian Fedimint servers will not prevent users accessing the mint. The distribution of control among multiple guardians ensures a robust and secure system. This is a significant trust reduction when compared to an unfederated or federated single guardian mint.

Cons:

• Multi-step Setup and Cost: Setting up a Federated Mint involves coordinating among multiple guardians, which requires more steps. However, the added security benefits make it well worth the slight increase in effort. Finally, running a federated mint will not be as cheap as running an unfederated mint.

*A four guardian federation is resilient to one guardian or their Fedimint server failing. A seven guardian federation is resilient to two failures, a ten guardian federation is resilient to 3 failures and so on.

To learn how setup a federation click here.

Federated Single Guardian Mints

Definition: A federated single guardian mint is managed by one guardian but they are running four or more separate Fedimint servers. This model represents a middle ground between the two other options.

Pros:

• High Resilience and Easy to Set Up: One or more of the guardian’s servers can go offline or be otherwise compromised without affecting the mint. The users will be unaffected and continue using the mint while the guardian fixes or recovers their server. This is a significant resilience improvement when compared to an unfederated solo mint. Also, having only one guardian makes the setup process almost as straightforward and quick as setting up an unfederated mint. 

Cons:

• Single Point of Failure and Cost: Since there is only one guardian, there is still the risk that they single handedly take funds, presenting a major security risk for the users of the mint. Finally, running a federated mint will not be as cheap as running an unfederated mint.

To learn how setup a federation click here.

Unfederated Mints (Solo Mints) 

Definition: It is possible to have an unfederated mint managed by a single guardian. This means that one individual or entity has complete control over a single Fedimint server.

Pros:

• Easy to Set Up and Cost: The simplicity of having only one guardian makes the setup process straightforward, quicker and cheaper.

Cons:

• Single Point of Failure and Resilience: Since there is only one Fedimint server, there is a significant resilience risk. If this guardian loses access to their keys, all the money within the mint will be lost. Also, as this is a single guardian, they have the potential to single handedly take funds, presenting a major security risk for the users of the mint. Finally, if this single guardian’s server is offline for any reason (software update, internet or power outage, etc), all users will immediately lose access to the mint until access is restored making it unsuitable for situations where high reliability is important.

To learn how setup a solo mint click here.

How to Choose the Best Setup?

Choosing the best Fedmint setup depends on your specific needs and circumstances. While we always recommend setting up a federated mint as the objectively best option in terms of security and reliability, we understand that requirements may vary. The flexibility of the Fedimint protocol allows for adjustments based on your unique needs. Whether you prioritize maximum security and resilience or ease of setup, there is a mint model that suits your needs.