David Chaum, the person responsible for starting the cypherpunk movement of the 1980s and also introducing eCash, a precursor of today’s virtual money, in the 1990s, believes that financial privacy weighs on the minds of people a lot more now.
“Consumers are starting to lose faith in online services and privacy protections they hoped were in place,”
he declared at Money 20/20, a conference in Las Vegas held on October 23, 2018. To exemplify his point, he draws attention to recent and widely reported lapses on social media websites like Facebook and predicts that improved privacy options are round the bend.
In an interview with Charlie Lee of Litecoin, Chaum spoke expansively about the future of digital privacy. He also promoted his most recent idea, a blockchain-based payment and messaging service “Elixxir,” backed by Ripple co-founder Chris Larsen.
“People are more aware of the dangers of being tracked,” Chaum said. He points out that in debates on digital privacy, the lens has shifted from protection of personal information to the collection of ‘big data’.
Chaum claimed that Elixxir can process hundreds of thousands of confidential, quantum-resistant transactions per second. (To compare, Bitcoin can only handle seven transactions per second.) Elixxir is not available to the public yet and a betanet is due out in Q2 2019, according to the project’s website.
In a separate interview with Bitcoin Magazine, Chaum proffered more details on Elixxir. “We have it; it is running,” he said, almost reassuringly. He also emphasized the importance of blockchain technology: “The opportunity to provide a stronger, fresher approach to consumer privacy is owned by blockchain because blockchain is not owned by the powers that be,” said Chaum.
Acknowledging that payment apps and messaging apps are becoming increasingly intertwined, Chaum described Elixxir as a blockchain-based variant of WeChat, the mobile payment and messaging app that has become the instant messaging mainstay in China. Chaum is careful to distinguish this, however- he emphatically states that his service shall not serve any corporate overlords, but shall be founded on individual liberty.
“My guess is that most people in China realize that the government has considerable access to WeChat and can even turn off the accounts and access the bank accounts of certain users,”
Chaum said. (The Chinese government has gone on record to admit that it has access to deleted WeChat messages.)
Chaum believes that, until now, consumers have had to settle for options that do not protect privacy. Given a choice, people will opt for a privacy-focused app over one that can be snooped on, especially if it appears equally as trendy and hip as WeChat.
A long standing issue with cryptocurrencies is that people try to use them for illegal activities. Charlie Lee, however, believes that this is what proves cryptocurrencies are working.
“The reason dark markets and the Silk Road used bitcoin is because bitcoin is good money.”
He points to how in 2011, the U.S. government shut down online poker by blocking bank payments to major poker sites.“You want to use money that someone unrelated to the transaction can’t block,”he says.
When pressed regarding concerns about illicit activity, Chaum replied:
“This is a silly concern, because I believe it has been said that three-quarters of U.S. banknotes are in unknown locations globally.”
He goes on to say that money launderers tend to deal with large sums of money, not the smaller amounts associated with consumer payments.