Fedi: what community custody changes

Fedi is a Bitcoin app that carries chat. A small group of people, called guardians, hold the Bitcoin together, and every user holds a digital claim on it.

I have used a Fedi federation for several weeks, and I like it a lot. I use Fedi for private spending and as my everyday bank. It feels like what private banking used to be.

What Fedi is

Fedi runs on Fedimint, open-source software for community custody. A group of guardians each run a server and hold the coins together. That group is a federation. You send Bitcoin in and you get ecash back: digital notes that are a claim on the federation's Bitcoin. You can send those notes to other members, pay over Lightning, or sit in the app and chat.

The notes move between members without the guardians watching. Nobody outside the federation sees who paid whom, or for what.

Why money and chat belong together

A company that sees your payments and your conversations can map how a community works. Who helps whom. Who organises what.

Fedi keeps both in one place, and both are private in different ways. Blind signatures mean a guardian signs a note without seeing it, so the federation cannot follow who pays whom. Direct messages and private groups are encrypted end to end. Public groups stay public. Payments arriving or leaving over Lightning can still reveal something to the services that route them.

How a federation holds up

Moving Bitcoin out of a federation takes a threshold of guardians to agree. Fedimint is Byzantine fault tolerant, so the group keeps working when members go offline or misbehave. The number depends on the size of the federation. With 4 guardians, 3 must agree. With 7, 5 must agree before Bitcoin moves or new ecash is issued, and the federation still runs with 2 of them out.

Theft would need 5 of the 7 guardians to collude. In practice that is very unlikely, because guardians usually do not know who the other guardians are. That is why the model works. Fedi matches them through PeerBadge and Manifold so they start as strangers, a design Jeff Booth described on 22 October 2026. It is still trust in a group of people.

Why many federations matter

Jeff Booth told Rob Wallace on the Bitcoin News YouTube channel, in an interview published on 3 November 2026 (at 32:07):

“And the more and more of those privacy federations there are around the world, it acts like Bitcoin nodes.”

The point is resilience. A Bitcoin node checks the rules for itself. A federation holds funds under a threshold of guardians, so its independence needs evidence of its own.

It is already in use

At bitcoin++ Seoul on 6 November, Fedimint developer Elsirion presented three years of the protocol in the wild. Matthew Vuk, who does Ark research at Second, posted on X from the session (x.com/matthewvuk2/status/2118519648409075866):

“Elsirion (@EricSirion) showcases the progress of “3 years of @fedimint in the wild” 🔆🌏 80 federations. 463k user transactions. 24k wallets.”

Group saving is the feature Fedi's co-founder and CEO rates highest. Obi Nwosu wrote on X on 12 October 2026 (x.com/obi/status/2109687380815090037):

“Group saving with Multispend is one of the most powerful and under appreciated features within the Fedi app.”

You can look at federations from the outside before you join one. Ayush Bansal, who builds Fedimint Observer, wrote on X on 6 November 2026 (x.com/bansalayush247/status/2118753707101991228):

“what's even more interesting is that you can explore data from 18 public federations on Observer.”

The dashboard is at observer.fedimint.org.

What still depends on someone else

A threshold of guardians can move the coins. Enough of them acting together could also issue ecash with nothing behind it.

There is a smaller concentration too. Fedi is the only liquidity provider for Manifold federations at the start, according to Fedi's support page, and the page describes other providers as future work. Offline guardians or thin liquidity can block a payment or a withdrawal.

An ecash note is only as good as the Bitcoin behind it, and checking that happens outside the app.

What you can do

• Check before you join. Observer shows public federations, so look at how long one has run and how many independent guardians it has.
• Send a small amount first, then pay some of it back out to a wallet you control. Note the fee and how long it took.
• Keep savings on keys you hold and use Fedi for spending money, the way you would use a bank account.
• Read step 10 of the Few Fedi guide for the withdrawal test done properly.
• Repeat the withdrawal test after a month and after any change in the federation, because a federation that paid out once can change underneath you.

Related: Few Fedi guide.

Photo: Image: Fedi, https://www.fedi.xyz/. Read as Markdown · RSS

Sources

1. Fedimint, “How Federations Work” (fedimint.org). fedimint.org/guardians/how-federations-work
2. Jeff Booth and Eric Yakes, interviewed by Rob Wallace, “Super AI Will Send Every Investment To ZERO… Except One” (Bitcoin News, YouTube), 3 November 2026, quote at 32:07. youtube.com/watch?v=Y4mxXmMh128&t=1927s
3. Jeff Booth, “Private money, private conversation, and how Fedi is solving the guardian problem” (jeffbooth.ca), 22 October 2026. jeffbooth.ca/articles/private-money-private-conversation
4. Matthew Vuk, post on X from the Fedimint session at bitcoin++ Seoul, 6 November 2026. x.com/matthewvuk2/status/2118519648409075866
5. Ayush Bansal, post on X on Fedimint Observer, 6 November 2026. x.com/bansalayush247/status/2118753707101991228
6. Obi Nwosu, post on X on Multispend, 12 October 2026. x.com/obi/status/2109687380815090037
7. Fedi, “What are the roles in a Manifold federation” (Fedi Support). support.fedi.xyz/hc/en-us/articles/38834761003666-What-are-the-roles-in-a-Manifold-federation
8. Fedimint Observer (fedimint.org). observer.fedimint.org/
9. Few, “Set up Fedi” (few.guide guide). few.guide/guides/fedi-wallet.html