Widely credited because the inventor of digital money, David Chaum is usually referred to as the “father of online anonymity” or the “godfather of cryptocurrency,” whose work impressed the near-mythical group known as the Cypherpunks from which Bitcoin emerged. 

Beginning his research in pc science in the late Nineteen Seventies, when encryption was labeled on the identical stage as nuclear know-how, Chaum shortly realized that the know-how can be essential to make sure the continuation of privateness and democracy in the digital age. More not too long ago, he based xx Network, a privacy-focused blockchain whose related xx Messenger Chaum hopes will stand up to assaults even by quantum computer systems of the long run.

“The National Security Agency was taking the position that cryptography was born classified, even if you created it yourself — like nuclear weapons technology,” Chaum remembers. He was instructed round 1980 that conferences on the topic would naturally not be allowed and that “people who organize them would be prosecuted.” 

Cryptography, encryption, cypherpunks, xx Network, xx Messenger, xx Coin, privateness, quantum computing, Ecash, DigiCash, democracy, Hannu Nurmi — “I was risking spending the rest of my life in jail,” he says.



David Chaum was 10 years forward of the Cypherpunks in his understanding of cryptography and digital privateness.




Encryption has lengthy been of very important significance in warfare, and the Allies breaking the cipher of the Enigma machine and decoding the Nazis’ secret messages modified the course of World War II.

Afterward, the United States authorities regulated cryptography as a navy munition alongside nuclear know-how. The 1976 invention of public key encryption, which allowed data to be shared between two events and not using a mutual encryption and decryption key, which couldn’t be cracked or intercepted, took away governments’ monopoly on the know-how. The cat was out of the bag, as they are saying.

As a pc science graduate pupil on the University of California, Berkeley in 1977, Chaum, now 67, remembers how he “started thinking how important privacy would be for the upcoming digital world” and, by extension, for democracy. 





Privacy was the default state in these analog days, with surveillance resembling listening to conversations, intercepting mail or looking for information requiring lively and concentrated effort. With digitalization, surveillance not wanted to be lively, as information could possibly be extra simply searched, cross-referenced and saved for later use. Chaum got here to the “fundamental realization that cryptography was the only way to protect privacy in cyberspace,” he remembers.

“That’s when I realized it was important to organize a conference on cryptography,” he says with fun, totally recognizing the absurdity. The end result was the International Association for Cryptologic Research, which continues to prepare conferences a number of occasions a 12 months. “I called it crypto — the conference was called Crypto 81,” he notes. 



ecashThe first cryptocurrency group, Ecash, circa 1994. Source: chaum.com



He was the primary individual to explain cryptographic cash in his 1983 paper, “Blind signatures for untraceable payments,” which led to the creation of short-lived Ecash by his firm DigiCash from 1995 to 1998, in addition to the invention of blind signatures, a kind of digital signature used in Bitcoin and different cryptocurrencies. 

It is notable that some cryptographers, resembling Matthew D. Green, have aired grievances with the phrase “crypto” coming to face for, and even being dirty by, cryptocurrency, thus disrespecting its authentic that means of “encryption.” 

Chaum takes the alternative view. “It’s so exciting to me because it’s bringing what was an archaic, esoteric, highly technical, mathematical, possibly classified technology area into widespread appreciation, so on contrary, I’m happy” to see the phrase “crypto” get new life.



“Crypto” means cryptography. Not that different factor. https://t.co/yaLOOCyx8d

— Matthew Green (@matthew_d_green) November 23, 2017



Backed by privateness

Among essentially the most outstanding elements of Chaum’s work is that his 1985 paper “Security without Identification: Transaction Systems to Make Big Brother Obsolete” is credited as offering the spark from a privacy-focused group in 1992 that started calling themselves the Cypherpunks.

Princeton’s Arvind Narayanan wrote concerning the group:

“[This movement], which originated in the late ’80s, took Chaum’s ideas and ran quite far with them in terms of rhetoric—in an explicitly subversive direction. For cypherpunks, crypto was at the core of a vision of how technology would cause sweeping social and political change, weakening the power of governments and established institutions… Anonymous digital cash, one of the key parts of Chaum’s proposal, by itself has political significance in that it offers an alternative to government-backed currencies.” 

After a number of unsuccessful makes an attempt at digital money by varied members of the Cypherpunks, the Bitcoin white paper by Satoshi Nakamoto emerged in 2008. He was quickly contacted by fellow member Hal Finney, who went on to obtain the primary Bitcoin transaction on Jan. 9, 2009. As such, Chaum is appropriately labeled the godfather of cryptocurrency.





But Chaum desires to go additional with non-public, uncrackable funds. In order to have actual privateness in the fashionable age, Chaum explains that actions should be un-linkable each to the person (vertical un-linkability) and to one another (horizontal un-linkability), that means that particular person actions should exist inside a knowledge vacuum of kinds. Unlike PayPal or bank cards, cryptocurrencies like Bitcoin and Ether usually are not straight linked to the true identities or IP addresses of customers — the transactions themselves are, nevertheless, linked to one another, and publicly so.

To have actual privateness in funds, Chaum causes, “you need to use a different pseudonym with each entity you interact with,” in order to make sure that no one can maintain a file on a selected nameless identification. Taking the subsequent step from privateness cash resembling Monero and Zcash, Chaum’s xx Network is engaged on xx Coin to allow quantum-resistant non-public funds.



“The difference between a bad electronic cash system and a well-developed digital cash will determine wether we will have a dictatorship or a real democracy.” Crypto pioneer David Chaum in 1996 #bitcoin pic.twitter.com/jiNh9TCqsf

— BankSith Lord (@renegruner1) July 18, 2022



A imaginative and prescient for governance

Chaum is evident in his perception that “the only effective way to maintain any level of privacy is to control the information with your own keys” and goes on to clarify that steady authorities leaks counsel that any data entrusted with others can grow to be public at any time. 

“All those leaks are forever, and they can be aggregated and amalgamated.”

Unlike the criticism leveled on the Cypherpunks he impressed, Chaum denies being an ideologue, saying his views are based mostly on practicality, as folks have to have a reputable assurance of privateness.

Chaum argues that privateness, over the long run, is essential for a purposeful democracy as a result of “you cannot be a citizen of a democracy without the ability to communicate freely,” citing a narrative about how when espresso was launched in Europe across the time of the enlightenment, it was hated by kings because it inspired folks to spend their evenings discussing politics.





Having a “private sphere of communication,” he argues, is the pivotal distinction between China and the West and that funds are a elementary type of communication. A steady democracy, due to this fact, requires the power to pay anonymously in response to Chaum — one thing that has historically been the case with money.

“Did you know that every single banknote is traced from the teller desk to the ATM machine in China?” he notes. The Chinese authorities has launched the digital yuan to get a panopticon-style view of each final fee.

Despite all the eye on cryptocurrency, Chaum appears way more enthusiastic about blockchain as a mechanism of future governments. Armed with a confidently deep understanding of political historical past, he dives right into a lecture.

“We’ve had civilizations we know of for 6,000 years,” he begins, saying that they gained traction after they have been in a position to train public coverage however naturally turned failed states and flipped to autocracy largely as a result of of the issue of discovering clever folks to do the federal government’s work whereas resisting the temptation of corruption. “If democracy fails to govern effectively, it gets kicked out,” he says, somberly opining that the west seems to be heading towards such a part.



Join me in welcoming the xx messenger – actually a dream come true! A giant thanks to all of the arduous work from the group at xx labs for making this imaginative and prescient a actuality. https://t.co/zbIFxWEyu8

— David Chaum (@chaumdotcom) January 26, 2022



Citing University of Turku political scientist Hannu Nurmi, he causes that direct democracy, a system in which voters vote on points straight with out the use of elected representatives and which was used in historical Athens, is the one approach to make democracy sustainable. Such a system turned infeasible as societies grew past the city-state, however Chaum believes that the arrival of smartphones and cryptography make the traditional system workable as soon as once more after 2,500 years.

In observe, Chaum envisions the reemergence of Athenian democracy utilizing a randomly chosen pattern of the inhabitants to vote on particular points utilizing their non-public keys in a approach that he believes would root out the potential for corruption. A pure drawback, nevertheless, would middle across the media, which is immensely highly effective in shaping political beliefs of the would-be voters.

“That type of democracy can scale to the complexity of modern civilization — no other system can,” Chaum asserts. 

“Nation states are proving to be somewhat dysfunctional — I’d much rather see a sort of global democracy if there was a way to make it fair in a poly-cultural and more diverse environment, which I think I’ve found.”

It exhibits that blockchain exterior of authorities is a vital step” towards such a brand new order, he says. Such concepts admittedly come throughout as quite grandiose and utopian in bringing again reminiscences of a curious experiment in blockchain governance on a Thai island, however the identify behind the imaginative and prescient instructions one to ascertain the place it may lead in 50 years’ time.





Quantum threats

Chaum is shocked by the success of cryptocurrency’s proliferation because the publication of the Bitcoin white paper. “The fact that these economic instruments succeeded to be outside the control of governments is a profound thing,” he says. He is, nevertheless, no fanboy of the crypto order because it stands, seeing many shortcomings from privateness to vulnerability to quantum computing. “Bitcoin is not a digital currency — it’s something else right now,” he says.

“Part of the reason I decided to launch my own project was that I sat in on an early Ethereum 2.0 meeting,” he remembers, coming to the view that “it was not likely to happen in a good way any time soon.” 

Chaum based xx Network in 2016, which he describes as a quantum-secure blockchain. “The first phrase of Satoshi’s white paper is ‘a digital currency’ — that’s me, right?” he says referring to his invention of the idea itself. In his opinion, each Bitcoin and Ethereum “are a little jammed up” and fail to reside as much as the purposeful title of a “digital currency.” They additionally face an existential risk from quantum computing, which some imagine may arrive by 2030.

“There’s a bunch of ways you can use quantum computing to either steal money or damage the consensus unless both are hardened in this way,” he asserts, referring to the quantum-hardened nature of his xx Network.

“The kind of encryption used by Bitcoin and Ethereum can be easily broken by a reasonably large quantum computer in seconds.” 

Many cryptocurrency fanatics imagine that no such pc exists or is more likely to come round anytime quickly, however Chaum factors out that “people who have machines that can break other people’s codes find a lot more advantage in keeping that a secret than in announcing it,” once more utilizing historical past to reveal his level with the truth that the Allies allowed German U-boats to sink passenger ships in order to stop freely giving that that they had damaged the Enigma Code. 



What so many individuals in the @xx_network group have been ready for, is lastly going to occur on the finish of July… 📈👀
For those that do not know xx community, it is a privateness targeted bc/ecosystem based by THE cryptography OG David Chaum. Start right here: https://t.co/aFxIaero9L

— Philipp Weber (@PhilippWeber_) July 14, 2022



Be calm and don’t panic simply but. According to The New Scientist, “calculations show [quantum computers] would need to be a million times larger than those that exist today” in order to crack Bitcoin. Cointelegraph not too long ago reported on an MIT Tech Review report that asserts that such threats are a few years away and a profitable quantum assault “is akin to trying to make today’s best smartphones using vacuum tubes from the early 1900s,” in response to physicist Sankar Das Sarma.

If such a quantum functionality did exist, it’s troublesome to think about who may resist the temptation of declaring oneself Satoshi or his predecessor after effortlessly cracking the non-public keys to the estimated 1 million BTC mined by Nakamoto.

Read extra: 6 Questions for David Chaum


6 Questions for David Chaum of XX Network






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