While the cryptocurrency world is often seen as a nascent industry, its foundational figure, David Chaum, will tell you that the concepts of digital privacy and anonymous transactions are nearly forty years old. Famously dubbed the "Godfather of Crypto," Chaum pioneered the underlying principles of digital cash long before Bitcoin was a concept.
In his groundbreaking 1983 paper, "Blind Signatures for Untraceable Payments," Chaum introduced a "new form of cryptography" that would give digital money the essential properties of privacy, payment validation, and asset security. He presciently warned that electronic payment systems could "have a material effect on personal privacy as well as on the nature and extent of criminal use of payments."
Chaum's discussion of 'Blind Signatures' was later referenced by Vitalik Buterin in The Ethereum Whitepaper as Chaumian CoinJoin in 2014. CryptoSlate spoke exclusively with Chaum during our Twitter Space with XX Network, Chaum's most recent venture. The full recording is available at the link in the tweet below.
Join us for a special Space tomorrow.
“How to find true privacy using blockchain”
w/@chaumdotcom @aaron_welwood @carterwj3 @BengerMarquesModerated by: @akibablade
August 11, 6PM BST/10AM PT
Link in 🧵 pic.twitter.com/GLY7xl8z7m
— CryptoSlate (@CryptoSlate) August 10, 2022
Our first question for Chaum was a thought experiment: what would his 1983 self have thought if shown a crystal ball into the state of crypto in 2022? He responded that he would have realized he "had a lot more work to do and been slightly frustrated."
Chaum asserted that what he originally designed "had privacy integrated," and he had hoped his paper would have sparked a movement for privacy as a standard. Furthermore, he believes the failure to adhere to the privacy standards he set nearly four decades ago has led to issues far beyond crypto, such as "the impact on elections" and the "shredding of social cohesion."
The conversation then evolved into a discussion around the Cambridge Analytica scandal and its clear privacy violations. Chaum is passionate about privacy and sees the potential for blockchain-based cryptography to solve issues at a socio-political level. Throughout the discussion, his frustration with the evolution of the internet and the lack of protection for users' data is palpable.
Chaum also shared that the idea of "a free system that no one can tamper with" was part of his early vision, which he referred to as a "chain of blocks." In 1994, Chaum launched DigiCash, the world's first digital currency utilizing cryptographic proofs. DigiCash was centralized in that a bank held it, but Chaum asserted that "the bank could not know who had which money."
While Chaum may have his reservations about the state of the blockchain industry in 2022, he ultimately declared that
“it is extraordinarily great that Bitcoin has raised the profile [of his vision] to the extent that it cannot be ignored by the powers that be and that’s game changing.”
He sees plenty of potential and room for growth concerning blockchain. However, the current state of privacy remains his primary concern.
When asked about his views regarding the sanctions on Tornado Cash and Circle's move to 'blacklist' associated addresses from using USDC, he noted that it is "quite disturbing." Chaum then claimed it was a "little outside [his] purview," yet in reality, he has a deep understanding of the underlying technology.
According to Chaum’s website, he is also the inventor of "mixing," a cryptographic technique similar to those used in protocols like Tornado Cash. The technology was initially designed to secure the privacy of email and digital pseudonyms and was presented in his 1981 paper, "Untraceable Electronic Mail, Return Addresses, and Digital Pseudonyms."
Since the late 70s, Chaum has been committed to using "cryptography to give people power over their own data." Still, he admitted in the Space that it is "pretty difficult to figure out how you can protect privacy and still let all the business that needs to get done, get done efficiently."
Chaum stated that he prefers not to get involved in what he called the "crypto wars" of policy and politics. However, the general tone of his sentiment was one of frustration—that privacy is not a more integral part of our daily lives, while any technology that enhances it is being criminalized.
The Twitter Space moved on to the topic of the state of the blockchain community today. Chaum was asked his thoughts on industry talent, to which he replied,
“I’m a big fan of the community and all the energy around it. But if you really had X-ray vision and could see through the technology, I don’t think the emperor’s wearing any clothes, you know.”
He continued to refer to some project leads as "amateur cryptographers," admitting that he hasn't been impressed by much of what he's seen. The XX Network, co-founded by Chaum, was created to address what Chaum feels is missing within the space.
According to Chaum, the XX Network team has showcased 3,500 quantum-resistant transactions per second while also launching a P2P client named Elixxir built on top of the network. Elixxir utilizes dark nodes to route messages through a decentralized network, enabling privacy for both messaging and network routing.
Chaum proclaimed that XX Network is now ready for use by the general public, and Elixxir is the first point of contact for those wanting to experience Chaum's vision of blockchain.
To listen to the full conversation covering Elixxir, quantum resistance, Apple, Google, and private community power, click the link at the top of the article or click here. Follow CryptoSlate on Twitter to be notified when we go live with more Spaces in the future.
