Cypherpunks write code: David Chaum & Ecash

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

He is considered the inventor of digital cash, long before Satoshi Nakamoto. Therefore, he deserves a mention as an honorary cypherpunk, or, just like Bloomberg called him“The Godfather of Cryptocurrencies.” Chaum ultimately provided many of the pieces that ultimately became Bitcoin.

He was born in 1955 into a Jewish family in Los Angeles, California (USA) and received his PhD in computer science from the University of California, Berkeley in 1982. That same year he organized an entire conference on cryptography and its possible applications, and that was indeed a bold move a cypherpunk because the US government was closely monitoring these systems – and in a bad way.

In the early 1980s, cryptographic technology was classified as munitions under the International Traffic in Arms Regulations (ITAR), meaning that the export (and even the creation or transfer) of strong encryption technology was severely restricted. Chaum avoided The simultaneous founding of the International Association for Cryptologic Research (IACR) and the associated securing of protection as an international scientific association by the United Nations led to legal challenges in this regard.

The IACR still exists today and organizes several conferences on cryptography around the world every year. After this first crypto conference, Chaum became a professor at the University of New York and the University of California.

E-Cash

In 1983, Chaum published a paper entitled “Blind signatures for untraceable payments“, in which he described a new privacy-preserving financial technology based on cryptography. This is the basis of Ecash, the first privacy-focused electronic cash system, which was launched when Chaum founded DigiCash in 1989.

This system allowed users to store money in a digital format on their computers and spend it anonymously at any store that accepted Ecash. The goal was to protect their privacy by ensuring that transactions did not require opening accounts with merchants or submitting credit card numbers.

As mentioned above, the core technology behind Ecash was the use of blind signatures. These are digital signatures where the message content is hidden (obscured) before signing. This technique ensures that the signer cannot see the message content, thus making it impossible to link the withdrawal and spending of the digital currency. As a result, the bank cannot trace individual transactions and the user’s anonymity is maintained.

However, the bank was still necessary as an intermediary and the actual origin of money was still a central bank. Ecash was a system and not a standalone currency and of course not as decentralized as modern cryptocurrencies. This is perhaps the reason why DigiCash had to file for bankruptcy in 1998, despite initial interest from major banks.

However, the concept paved the way for future developments in the field of digital currencies and cryptographic data protection solutions.

More than e-cash

David Chaum’s cryptographic and privacy-focused efforts did not end with Ecash or blind signatures. One of his notable achievements was the development of Mix networks in 1981, an anonymous communications system. Mix networks work by encrypting and bundling messages from multiple senders and reordering and obfuscating them on each server until they reach their final destination. This concept is fundamental to modern anonymous browsing tools like Tor and underscores Chaum’s pioneering role in improving Internet privacy.

Chaum also introduced non-repudiable signatures in 1989, which allow the signer to control who can verify the signature in an interactive process. This ensures that signatures are considered valid unless the signer actively rejects them.

In addition, in 1991 he developed group signatures, which allowed a group member to anonymously sign messages on behalf of the group, with a group manager able to remove anonymity if necessary.

Another important area of Chaum’s work lies in trustworthy electoral systems. Starting in 1981, he proposed an electoral system that would protect voters’ privacy while ensuring verifiable results through the use of mixed networks. His later work included SureVote in 1991, which enabled secure voting from untrusted systems, and a number of cryptographically verifiable voting systems such as Prêt à Voter, Punchscan and Scantegrity. These systems have been used in some real elections.

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

As Chaum and other cypherpunks have already noted, the use of privacy tools is even more important today than it was in the last century. According to the “Zimmerman Law” (another remarkable cypherpunk), “The natural course of technology tends to facilitate surveillance (…) the ability of computers to track us doubles every eighteen months.” The sad truth is that surveillance is only the first step to abuse – by cybercriminals, corporations and governments.

We must protect our information and our money as best as possible. Fortunately, there are numerous tools and decentralized ecosystems that allow us to do this simply by using them. One of them is Obyte.

This decentralized ecosystem offers a compelling solution for those looking to protect their online privacy and financial freedom. Its DAG (Directed Acyclic Graph) structure sets it apart from blockchains by offering a more decentralized and censorship-resistant framework. Since there are no miners, “validators,” or other middlemen, only users are responsible for their own transactions and data. This architecture enables secure and immutable operations, ensuring that no single entity can control, censor, or otherwise tamper with the network.

With Obyte, users can conduct their digital activities with greater security, 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 using Obyte’s technology, individuals can protect their data and assets and enjoy greater levels of freedom and security online – just as cypherpunks desired.

Read more from the Cypherpunks Write Code series:

Featured vector image by Garry Killian/Freepik

Photo by David Chaum of Piaras Ó Mídheach/Web Summit