On September 19, at the international forum Consensus in Singapore, David Chaum, one of the founders of the cypherpunks movement and the eCash payment system, introduced the new Elixxir cryptocurrency. The project should become a "revolutionary in its field," but not all are convinced of the success and novelty of the coin.
The Essence of Elixxir
According to David Chaum, Elixxir should solve several problems of cryptocurrencies: scalability, low transaction speed, and privacy issues. In general, blockchain needs fundamental changes that will lead to the modernization of the network and the introduction of technologies. Bitcoin should become a payment system, rather than a speculative asset. To change the course of the case and make a "qualitative and rapid leap," we need to change the rules of the game.
"The Elixxir platform will handle thousands of transactions per second and reduce the energy needed to maintain the network. Now, the Bitcoin network can only process about seven transactions per second, and this low speed is a major obstacle to popularization," Chaum says, citing a classic example of Bitcoin and Visa bandwidth comparisons that can handle tens of thousands of transactions in a short period of time.
Scalability is not possible due to the constant use of complex and long keys. To work around this problem, it was suggested to perform operations with private passwords in advance. The very nodes of the Elixxir network, called Mixxchain, will produce unique and confidential calculations for each of the blocks.
The protocol of confidential computing, as Chaum is confident, will reduce the threat of quantum computers that can destroy the cryptographic system with their active development. In the framework of the Elixxir architecture, developers believe that "true confidentiality" can be achieved through so-called multi-party computing, a term that David Chaum himself introduced several decades ago. This effective function is currently used by the Zcash and Enigma projects to increase privacy.
Despite the fact that the developers and Chaum claim "the best privacy," users and crypto enthusiasts have already managed to find system shortcomings and conflicting issues. The well-known Twitter user WhalePanda tested the Elixxir project and doubted its ability to store personal data.
When you start a new node in the Mixxchain network on the site, you need to go through the KYC procedure, which requires personal information about the user: name, mail, country, and more. "So @chaumdotcom (David Chaum) launched a new project @mixxchain. Their tag line 'Privacy Meets Scalability.' What that means? ¯\_(ツ)_/¯ The fun part is that they're talking about privacy and then run a KYC form to allow you to run a node, 🤔" says the suspicious Twitter user.
Because of these requirements, it is not clear whether the project will be able to meet the stated characteristics and really make a coup in the cryptocurrency industry. Coindesk journalist Alyssa Hertig called Elixxir “a project that uses well-known principles of blockchain and digital coins.”
Probably, the Mixxchain network would not have been given so much public attention had it not been for the personality of David Chaum, who is one of the most significant and unique experts in the computer technology industry.
The Personality of David Chaum
This specialist can be called a pioneer and attributed to the rare category of people who were born before their time. In the 80s, long before the appearance of Netscape, Internet Explorer, and Mozilla browsers, Chaum had started thinking about privacy in the global network as a young scientist at the University of California, Berkeley.
In 1981, the researcher published his important research paper "Untraceable Electronic Mail, Return Addresses, and Digital Pseudonyms," which talked about a method that would encrypt the source of outgoing information. 21 years later, the anonymous Tor browser was created on the basis of the technology he presented.
A few months later, he released another important research paper on blind signatures for untraceable payments, and the essence of the material was the availability of cryptographic key pairs: public and private. The technology of blind signatures is the basis of cryptocurrency is the main part of the system, with the help of which transactions are made.
Even then, the computer science doctor started developing cryptographic concepts that would ensure the privacy of monetary transactions. In 1994, at the first CERN conference (European Organization for Nuclear Research) in Geneva, David Chaum stated that the capabilities of the Internet would soon become boundless.
"Payment from any personal computer to any other workstation, over email or Internet, has been demonstrated for the first time, using electronic cash technology. You can pay for access to a database, buy software or a newsletter by email, play a computer game over the net, receive $5 owed you by a friend, or just order a pizza," Chaum said long before the worldwide network became available to many users around the world.
After many developments, the eCash payment system was created. It did not become a prototype of modern money, but it inspired CIFPs, an informal group of people who are concerned about privacy in the network and cryptography. After the idea of private money was advanced, the well-known cryptographer Adam Back created Hashcash (the system of consensus that is used in Bitcoin and its forks, known as the Proof-of-Work consensus algorithm), and cypherpunk Wei Dai described the concept of B-Money.
David Chaum is one of the first supporters of digital privacy. All scientific activity was devoted to this aspect of the user's behavior on the network and the preservation of data. In an interview with the American Wired publication on computer technology, the scientist stated that there are no restrictions and walls in cyberspace.
"You have to let your readers know how important this is. The choice can only be made once. Cyberspace doesn't have all the physical constraints. There are no walls . . . it's a different, scary, weird place, and with identification, it's a panopticon nightmare. Right? Everything you do could be known to anyone else and could be recorded forever. It's antithetical to the basic principle underlying the mechanisms of democracy," Chaum said at the very beginning of 1994.
Chaum believes that his main mission is the creation of digital private money. Therefore, in 1990, the company DigiCash was founded in Amsterdam. It specialized in Internet transactions and payment systems. DigiCash was used in the state program of refraining from road tolls (eventually canceled) and smart cards (analogs of modern hardware wallets). The digital money system eCash with the monetary unit CyberBucks became the main product of DigiCash.
"As payments on the network mature, you're going to be paying for all kinds of small things, more payments than one makes today, and they're going to be that much more revealing," Chaum assured in an interview with The New York Times in 1994.
Classic banks had started testing the eCash payment system. For example, the Mark Twain Bank of St. Louis received a license to use eCash. By early 1996, Deutsche Bank had also begun to implement the Chaum solution, followed by Credit Suisse, Australian Advance Bank, Norway's Norske Bank, and Bank Austria.
After the appearance of DigiCash, a community of cyberpunks was created. Chaum became the ideological inspirer of the group and received the status of the "Godfather" of the cyber movement.
But then users and government authorities did not understand the essence and necessity of privacy in the network, so gradually the DigiCash project went bankrupt.
"It was hard to get enough merchants to accept it so that you could get enough consumers to use it, or vice versa. As the web grew, the average level of sophistication of users dropped. It was hard to explain the importance of privacy to them," David Chaum commented on the collapse of his company.
Perhaps now, the well-known developer and computer science doctor wants to restore his activities with the help of the cryptocurrency project Elixxir on the implementation of private instant payments to the average user environment and realize the concept that he had worked on throughout his research career.