DigiCash founder talks about privacy and security in cryptocurrency and blockchain technology

In a Money 20-20 conference held on October 23, David Chaum, the founder of DigiCash, explained the need for privacy and how it has evolved over the years.

The Cypherpunk movement was set off by David Chaum with his anonymous digital cash and pseudonymous reputation systems described in his “Security without Identification: Transaction Systems to Make Big Brother Obsolete (1985).”

Chaum shared his thoughts on privacy and what it means to him. He stated that he started looking at possibilities to protect privacy way back in the 80s when he published “Achieving Electronic Privacy,” detailing how users could protect their information.

He further explained the reasons why anonymity matters and stresses the need for privacy meta-data and call protection. According to the article, records of purchase of goods, subscription to a magazine and tax information can all be linked into a single dossier on the users’ life without their knowledge.

Chaum stated that the aim of development of Digicash in the 90s was to bring a privacy-protected digital bearing instrument to the web. Digicash was an electronic money corporation that developed a software to make the electronic payments untraceable by the issuing bank, government or third parties. He added: 

“In those days it was unclear whether the democratic distributed nature of the web and internet will prevail and dominate the telecom industry and the banks as well. And now we see how its more centralized collaborative distributed mechanism.”

He went on to explain the reason he was looking forward to e-cash’s success which was issued by Deutsche Bank. E-cash, he said, was a really “big thing” in those days which provided a much-needed traction for the start of the digital era.

He also expresses optimism on digital currencies. He says that “privacy”, “distributedness” and “security” are the building blocks of cryptocurrencies.

Furthermore, he spoke about a new type of cryptography that he had developed over the years for his cryptocurrency project “Elixir” which has reportedly made a “breakthrough in blockchain technology adoption” and can handle thousands of transactions per second.

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