[KeynoteSpeech] #David Chaum #Elixxir CEO at #kbw2019

[Music] so it's wonderful to be here in Korea again I was about 18 months ago that I was first invited to Korea to give a little bit of historical background on blockchain and some of my work and that predated watching I was not in this space at that time and it was such a kind invitation and I learned at this event that blockchain wasn't really technically as sound as it could be and I heard a lot of discussion about plans for the future and things that people were working on and and so on and frankly I was unimpressed I concluded that the the types of fundamental improvements that are needed like consumer scale and quantum resistance and privacy and so forth a mass adoption we're not just a matter of engineering but rather that they required some fundamental new technical breakthroughs scientific breakthroughs and so I started working on that and that's why I'm here now to present what I think is a very fundamental breakthrough in this space we call it praxis and it is a new fundamentally new type of consensus algorithm and a new currency that's based on it and you know I've been working in this space for like 40 years trying to provide privacy the way it was the issues were framed back in the day and understand the fundamental capability of cryptography to provide security and privacy and I worked on voting systems and you know I probably many of you have heard of the digit cache work in the 90s and probably most of you don't know that in the late 70s and early 80's the Byzantine guy Leslie Lamport and I were hanging out in Berkeley talking about all this stuff before the famous results were published and my dissertation at Berkeley my PhD thesis was on a way to do distributed consensus essentially a blockchain and people have now recently written about that if you look at my Wikipedia page you can read about the reference where essentially it's it's asserted that all the elements of modern blockchains whether permission or um permission were in my my dissertation but because I was such a privacy fanatic and digital sovereignty believer I didn't sign away the rights to my thesis so that meant that it was never published electronically and it just remained on paper in the library at Berkeley so most people are unaware of my early work in in consensus but I've been using this background and a lot of other things that I've worked on over the years to come up with this praxis scheme at its it's a the first really strong quantum resistant electronic payment system but it also includes the speed privacy and scalability needed to be mass adopted and I'll come back to these these points in more detail this is not working up it's working but with delay switch to this one so we have created a crash project of some of the top top people that I could pull together from all over the world to work on developing this breakthrough at a special lab we've created in the Cayman Islands what it doesn't have any restriction on who can come there and work that's a view from one of our windows it's not a really bad place to work and we've been at it for a while now and in stealth mode and I here I'm announcing the fact that that we're actually doing this and we've now see how this is all coming together and we were expecting a white paper hopefully before the end of this calendar year and so of course the underlying vision is that articulated in the first words of the Satoshi white paper to make an electronic money that can be used widely by everybody and that's something that still remained a bit elusive and now just I think yesterday or so the even the National Academy of Sciences in the US has said that they're concerned that quantum computers may break cryptographic systems and they don't know exactly when but be just like you know engineering work in software isn't going to make fundamental advances you can also say I think safely that like they used to say when I was growing up you know they used to say the the revolution will not be televised just remember that this was a meaningful statement to us in those days well I don't think the development of quantum cryptanalysis will be something that you'll learn about in advance you'll only find out after currencies that are based on that have been totally destroyed because the the actors that are capable of developing these technologies are our state actors it's not so and there's more evidence of this you saw recently a announcement of progress in this space was taken down on a US government site so there's a there's a there's a battle on for dominance in this and and a breakthroughs in this technology and it it's it's a serious threat to cryptocurrencies so the Praxis currency is able to provide the the kind of scale and speed that's needed for consumer transactions as I said in past announcements on relays our technology general you can do tens of thousands of transactions a second which is way more than like the visa Network even when it's running out of both of its redundant data centers and allegedly that accounts for something like 40% of global Global Payments so the fundamental idea of our payment technology is one of a denominated currency in other words just like the original ecash from the 90s it is based on numbers that are each worth fixed amounts of money just like containerized shipping just like paper money and metal coins each different type of signature validates a number to be worth a fixed amount and this is a say currently a relatively unique approach even though it's well proven out in the 90s with Withey cash but what it does is it gives you a piece of the privacy puzzle it gives you what might be called horizontal privacy it starts to break the linking between transactions and to other transactions now when you combine this with the elixir which is our other technology mixing which breaks the link between the individual's physical location or identity and the transactions the vertical link then you have unprecedented privacy and payments so praxis provides the underlying type of ingredient that's necessary to be fully private when it's integrated with elixir so you know I think that the fundamental interest in the blockchain space is probably triggered by let's say governmental usurp ssin of people's money and there are a lot of places around the world where governments have devalued or basically confiscated money from consumers and this to a large extent it could you could interpret as explaining why there's so much interest in digital money that is outside of the control of governments but I think now the world is is rapidly changing because of awareness of another kind of thing that governments the lights are taking from us and that is all the information about us they are that taking our privacy away you could say it's a theft of metadata the public is in many countries outraged and there is tremendous let's say hatred towards those social media companies and the like the technical technological BMS of this world for having secretly stolen what it is that's essential and unique about us all but moreover and far more frightening really is the apparent ease with which this information can be used to not only manipulate our political orientation and our votes so it's actually being used to take control of society and that is a far worse threat than someone stealing your money because basically what that means is they're stealing your freedom and your ability to be a human being it's a very very serious escalation and so what's needed now urgently to address this issue is protection of what is referred to as metadata metadata was defined recently by Edward Snowden you know you may think he broke the law that is it you may think he's a hero or both it doesn't really matter he was in the unique position to know so this statement is is still quite valid independent of what you might think about Edward Snowden he's telling us that and maybe I'll just pause let the translators translate this but as we know the United States government together with its it's friends have been engaged in what Edward Snowden told us initially was is called internally the full take have you heard that expression the full take that's that spy talk for capturing every single bit that travels over every single wire in the world and saving it forever and that data even if the message content is encrypted the remainder of that data is what's called metadata and it is actually more revealing and much more easily distilled and much more certain to be unalterable and a none to be true that's all that so-called traffic analysis all the who talks to whom and when the so called social graph where you are at each moment who you're communicating with what what organizations what sort of transactions how long the transactions are how long they last etc etc the whole pattern of your life and recently I mean just to illustrate this a fellow at MIT did a little bit of analysis just based on his email to sort of see what kind of a picture of his life would be revealed and he's written about this and this does not include all the other location-based tracking everything else that has now become quite prevalent so people have written about how this kind of thing is done it's not rocket science it's it's a technological engineering process that's extraordinarily well funded has complete access to everything it needs to do and it's just a very organized routine process that just scoops up analyzes sort saves and then makes available to anyone in government's that wants it all this data so this is this you know your tax dollars at work as we say well okay when Silvio and I were back having fun that in Berkeley on graduate school studying computer science solving the really hard problems which was like a huge thrill I got to tell you when I was also thinking about what this stuff meant for the world and I wrote this in an article which later appeared in Scientific American so that was it like translating the ten languages it's appeared on the featured on the cover also like the top journal of computer science at the time communicates of the ACM and so forth and so on it's pretty widely reported what may I'll just let this be translated if so you know I urge you to if you have time to go back and look at this original article you'll see that it also predicted and had an illustration of a smartphone and predicted the importance of electronic commerce and so forth but what it really was mainly trying to set up is this big problem which I think we are only seeing the very beginning of now there's going to be an escalation of measures and countermeasures in this battle to control what I think is the whole game control over our informational lives that is the whole game so I'd like to now show you just a video that explains the solution we we need the audio can we get the audio for this when the metadata let me just start it again so here's a brief two-minute cartoon video with Korean subtitles that I've narrate which explains how the elixir and praxis technologies team up to shred metadata and provide a platform that can solve this very urgent and pressing problem suppose Alice wants to send a message to Bob but she doesn't want anyone to know that the two of them are communicating message content can easily be protected by so-called end-to-end encryption but this does not protect formation about who's talking to whom and when the metadata which is increasingly recognized as far more revealing and more challenging to protect each member of a team of nodes in order to protect the metadata successively shuffles the batch of encrypted messages using its container of secretly arranged tubes and sending the messages without delay through to the next team member even just a single node can keep senders from being linked to recipients Alice also gets a receipt to for me her confidentially that her message was provided to bomb team members that destroy their secret pattern of tubes making way for a new team ready for a new batch earlier each note is chosen independently as a kind of random secret key which input tube to connect to which output tube elixirs break through over the type of messaging I open sourced in the 80s is a way that enables almost all the work to be done well in advance yielding the only known way to provide real-time metadata protection smartphone to smartphones lead can also pay you me by sending what appears to be an ordinary message but that actually contains numbers that serve like dental coins and paper money a called such denominated on for first issue by digit cash in the 90s alysha's breakthrough improvement on the original digital cache now makes it fully distributed and quantum resistant elixir thus is able to uniquely provide a new ultimate metadata level protection of confidentiality in all your online communications and payments for the first time giving you a protected sphere protecting your digital world today and your digital future you can see that up on our elixir website so after announcing actually it was just a year ago that I would start this company and actually build this stuff we've made a lot of progress and spent a lot of time traveling around and you know interacting with the community it's very important and building a super team I mean by the way we're the only development team in the Cayman Islands as far as I can tell in this space seems to be one of the only places you can bring people from anywhere in the world to work on a common project so I think we're doing something extraordinary in that regard now we have a transparent process that's I think uniquely transparent where we first had a survey to find out what was wanted and a completely open process with dispute resolution and so on to arrive at a set of volunteer node operators for our beta Network and this is now completed for a while and we have three teams of beta node operators and very pleased by the showing of support that that represents we also have well the numbers increase since this slide was made but we have several thousand people who are using our waiting list app and are looking forward to participating in our messaging system and the messaging system is running its live on nodes that are operated by our alpha partners these are companies that are interested in running these nodes and helping us measure and evaluate everything and have access to the full api's and the libraries that allow them complete access to the messaging platform and that's also running very well currently and today represents an important announcement of praxis coming out of stealthy release here in Asia and a little more in-depth discussion of the quantum resistance so we've I think in a short span of a year or since we announced our the beginning of our efforts we've achieved a great deal with a lot of help and so for which I'm grateful and as you know it's all about community in this space and so our xx collective sort of unifying praxis and elixir is underway we have one thing that the collectives helping with is the performance analysis of the alpha net and there are you know public involved in pubs verification of the whole system and they're using the Android and iOS clients currently and I guess you can see some of that scrolling by they are and importantly the collective is grateful to when the leadership that our local leaders provide and we are currently open to establishing relationships with additional local leaders in this this of course as you many of you know is to prove to be an important part of most Community Development and most programs and so we would encourage anyone that's interested in participating in this to reach out to us and I just wanted to kind of wrap up here by pointing out that we'll be having a few events and in particular today just as this conference closes if you walk past the escalator on this floor you will come to the Rose Room and that's where we will be holding a meet-up but at 7:00 or when the conference is over and we have other meetups here and in them we'll be in Japan and also for Def Con and so on so I look forward to having a chance to discuss any and all this image in person at some of our events and so I'd like to yeah thank you all for your for your interest in attention and support [Music] all right