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Cypherpunks Write Code: David Chaum & Ecash

by ObyteAugust 15th, 2024

Too Long; Didn't Read

David Chaum, an American computer engineer and talented cryptographer, is likely the pioneer of all things crypto. He’s known to be the inventor of digital cash, long before Satoshi Nakamoto. Chaum provided a lot of pieces that would come together to create Bitcoin, eventually.

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The cypherpunk movement started with a mailing list in 1992, but there were pioneers of online privacy even before that. David Chaum, an American computer engineer and talented cryptographer, is likely the pioneer of all this. He wasn’t on the mailing list back then (to our knowledge), but he was definitely creating new software with cryptography to preserve our anonymity and improve older systems.

He’s known to be the inventor of digital cash, long before Satoshi Nakamoto. That’s why he deserves a mention as an honorary cypherpunk, or, just like Bloomberg called him, “The Godfather of Crypto.” After all, Chaum provided a lot of pieces that would come together to create Bitcoin, eventually.

He was born to a Jewish family in Los Angeles, California (USA) in 1955, and got a doctorate in computer science from the University of California, Berkeley in 1982. The same year, he launched a whole conference about cryptography and its potential uses, and that was actually the kind of bold move a cypherpunk would make since the US government was paying close attention to these systems —in a bad way.

In the early 1980s, cryptographic technology was classified as a munition under the International Traffic in Arms Regulations (ITAR), which meant that exporting (even creating or sharing) strong encryption technology was heavily restricted. Chaum avoided being legally targeted for this by creating the International Association for Cryptologic Research (IACR) at the same time, securing protection as an international scientific association by the United Nations.

The IACR still exists today, and it organizes several annual conferences on cryptography across the globe. After that first Crypto conference, Chaum landed as a professor at the University of New York and the University of California.

Ecash

In 1983, Chaum published a paper called “Blind Signatures for Untraceable Payments”, in which he described a new privacy-preserving financial technology built with cryptography. That’s the groundwork of Ecash, the first privacy-oriented electronic cash system in the wild, that would come to life when Chaum founded the company DigiCash in 1989.

This system allowed users to store money in a digital format on their computers and spend it anonymously at any shop that accepted Ecash. It aimed to protect their privacy by ensuring that transactions didn't require opening accounts with vendors or transmitting credit card numbers.

As we mentioned, the core technology behind Ecash was the use of blind signatures. They are digital signatures where the message content is hidden (blinded) before being signed. This technique ensures that the signer can’t see the message content, providing unlinkability between the withdrawal and spending of the digital currency. As a result, the bank couldn’t trace individual transactions, preserving the user's anonymity.

However, the bank was still necessary as a middleman, and the money's ultimate origin was still a central bank. Ecash was a system, not a currency by itself, and, of course, it wasn’t as decentralized as modern cryptocurrencies. That’s maybe why, despite initial interest from large banks, DigiCash ended up declaring bankruptcy in 1998.

The concept, however, opened the path for future developments in digital currency and cryptographic privacy solutions.

More Than Ecash

The cryptographic and privacy-oriented efforts by David Chaum didn’t end with Ecash or the blind signatures. One of his notable achievements was the development of mix networks in 1981, an anonymous communication system. Mix networks work by encrypting and batching messages from multiple senders, reordering and obfuscating them at each server until they reach their final destination. This concept is foundational to modern anonymous browsing tools like Tor, emphasizing Chaum's pioneering role in enhancing Internet privacy.

Chaum also introduced undeniable signatures in 1989, which allow the signatory to control who can verify the signature through an interactive process. This ensures that signatures are considered valid unless actively disavowed by the signer.

Additionally, in 1991, he developed group signatures, enabling a group member to sign messages on behalf of the group anonymously, with a group manager capable of revoking anonymity if necessary.

Another significant area of Chaum's work is in trustworthy voting systems. Starting in 1981, he proposed a voting system that maintains voter privacy while ensuring verifiable tallies using mix networks. His later work included SureVote in 1991, which allowed secure voting from untrustworthy systems, and a series of cryptographically verifiable voting systems like Prêt à Voter, Punchscan, and Scantegrity. These systems have been employed in some real-world elections.

More recently, Chaum has been working on the XX Network, “a high-speed privacy-protected blockchain with quantum-resistant consensus and currency with metadata shredding via mixing”. In other words, this network is designed with robust encryption for a variety of privacy-centric use cases, including secure messaging, anonymous transactions, and protecting user metadata from surveillance.

Tools for Privacy

As Chaum and other cypherpunks have pondered, the use of privacy tools today is even more important than in the last century. According to the “Zimmerman Law” (another remarkable cypherpunk), “The natural flow of technology tends to move in the direction of making surveillance easier (…) the ability of computers to track us doubles every eighteen months.” The sad truth is that surveillance is only the first step to abuse —from cybercriminals, corporations, and governments.

We need to protect our information and our funds to the best of our ability. Luckily for us, there are numerous tools and decentralized ecosystems that will let us do it just by using them, and one of them is Obyte.

This decentralized ecosystem offers a compelling solution for those seeking to protect their online privacy and financial freedom. Its Directed Acyclic Graph (DAG) structure sets it apart from blockchains by providing a more decentralized and censorship-resistant framework. Since there are no miners, "validators", or other middlemen, only users are in charge of their own transactions and data. This architecture allows for secure and immutable operations, ensuring that no single entity can control, censor, or somehow manipulate the network.

With Obyte, users can conduct their digital activities with greater confidence, knowing that their information and financial transactions are protected. The platform’s robust security measures and decentralized nature make it an ideal choice for anyone looking to maintain their privacy and autonomy in the digital age.

By leveraging Obyte’s technology, individuals can safeguard their data and assets, enjoying a higher level of freedom and security online —just like cypherpunks have wanted.

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