The Godfather of Crypto expresses concern over the current state of blockchain privacy

The crypto industry is often referred to as being in its infancy with the “we’re still early” meme popular in the community. However, digital cash is not a new concept, as anyone familiar with David Chaum will attest. Chaum is known as the Godfather of Crypto, when he published an article about digital cash almost 40 years ago.

In his 1983 paper, “Blind Signatures for Untraceable Payments,” Chaum proposed a “new type of cryptography” that would give digital currency the properties of privacy, proof of payment, and freezing of funds. He feared that electronic payment systems could “have a significant impact on privacy as well as the nature and extent of criminal use of payments.”

Chaum’s ‘Blind Signatures’ proposal was later referred to by Vitalik Buterin in The Ethereum Whitepaper as Chaumian Blinding in 2014. CryptoSlate spoke exclusively to Chaum during our Twitter Space with XX Network, Chaum’s latest project. The full recording is available in the first reply to the tweet below.

Join us in a special place tomorrow.

“How to achieve true privacy using blockchain”
w/@chaumdotcom @aaron_welwood @carterwj3 @BengerMarques

Moderated by: @akibablade

11 August at 6pm BST/10am PT

Link in 🧵 pic.twitter.com/GLY7xl8z7m

— CryptoSlate (@CryptoSlate) 10 August 2022

What Chaum would have thought of web3 back in 1983

Our first question to Chaum was to ask what his 1983 self would have thought had he been shown a crystal ball with a glimpse into the crypto state of 2022. His response said he would have realized he “had a lot more work to do and been a bit disappointed.”

Chaum declared that what he originally proposed “had privacy built into it”, and he had hoped that the paper would have triggered an expectation of privacy by default. Furthermore, he believes that failure to adhere to the privacy standards he set up nearly 40 years ago led to problems well beyond crypto, such as “manipulation of elections” and “shredding of social cohesion.”

The conversation would later develop into a discussion around the Cambridge Analytica scandal and its clear breach of privacy. Passionate about privacy, Chaum sees the potential for blockchain-style cryptography to solve problems on a socio-economic level. Throughout the discussion, his frustration with the development of the internet and the lack of protection of users’ data is evident.

Digital money and DigiCash

Chaum also stated that the idea of ​​”an autonomous computation that no one can tamper with” was part of his early vision, which was referred to as a “chain of blocks.” In 1994, Chaum launched DigiCash, the world’s first digital currency that uses cryptographic proof. DigiCash was custodial because a central bank held it, but Chaum argued that “the bank couldn’t know who had what money.”

While Chaum may have his reservations about the state of the blockchain industry in 2022, he ultimately declared that

“It’s exceptionally great that Bitcoin has raised its profile [of his vision] to the extent that it cannot be ignored by the powers that be, and it changes the game.”

He sees many opportunities and room for growth when it comes to blockchain. However, the current state of privacy is his primary concern.

Crypto Mixing Protocols

When asked about his views regarding the sanctioning of Tornado Cash and Circle’s move to “blacklist” related addresses from using USDC, he noted that it is “quite disturbing.” Chaum then claimed that it was a “slightly off [his] scope,” but 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 such as Tornado Cash. The technology was originally designed to ensure the privacy of e-mail 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 dedicated to using “cryptography to give people power over their own data.” However, he admitted in Space that it’s “quite difficult to know how to protect privacy and still allow all the things that need to be done to be done effectively.”

Chaum declared that he does not like to get involved in what he called the “crypto wars” regarding politics and policy. However, the general thread in his contribution to the conversation was frustration and that privacy is not a more important part of our everyday lives. In contrast, any technology that improves privacy is banned.

The crypto community

Twitter Space moved on to the topic of the state of the blockchain as it stands today. Chaum was asked his thoughts on industry leaders in Space, 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 is wearing any clothes you know.”

He went on to refer to some project leaders as “amateur cryptographers”, and admitted that he has not been impressed by much of what he has seen. The XX Network, co-founded by Chaum, was created to address what Chaum felt was missing in the space.

According to Chaum, the XX Network team has demonstrated 3,500 quantum-resistant transactions per second, while also launching a P2P messenger called Elixxir built on top of the network. Elixxir uses dark nodes to route messages through a decentralized network that allows the privacy of both messaging and network routing.

Chaum declared that the XX Network is now ready for use by the general public, and Elixxir is the first point of contact for those who want to test out Chaum’s version of the blockchain.

To listen to the full conversation covering Elixxir, quantum resistance, Apple, Google and private community management, visit the tweet 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.