David Chaum on Web3: 'Computing with a Conscience'

David Chaum and the Future of Secure Communication

David Chaum stands as a pivotal figure in both computer security and the evolution of cryptocurrency. Beginning in the early 1980s, his company, DigiCash, processed the initial digital payment transaction in 1994. Since then, he has consistently focused on advancing blockchain technology and bolstering security measures.

Introducing xxmessenger: Quantum-Resistant Messaging

Chaum, alongside his current venture, xx.network, is proactively securing messaging for the future. They have recently launched the first messaging application designed to be “quantum-resistant,” a service engineered to withstand brute force attacks for many years to come. This new application, xxmessenger, is now available.

“In the 21st century, metadata has become the most valuable commodity,” Chaum stated in a recent discussion. “While it can be utilized to enhance product marketing or facilitate information retrieval, it also presents risks of manipulation, tracking of individuals, and control over populations.”

Chaum’s overarching ambition is to establish absolute security and privacy across all digital interactions, encompassing payments, voting systems, and ensuring that service providers cannot exploit their users. He views Web3 and blockchain technology as essential components in achieving this vision.

Web3, Blockchain, and the Role of Venture Capital

We engaged with Chaum to explore his perspectives on the future of web3 and blockchain, and the importance of addressing security concerns, such as potential NSA surveillance.

TechCrunch: Considering the current technological landscape, what are your thoughts on the perception that web3 is largely controlled by venture capitalists? Is web3 a genuine development?

David Chaum: In every phase of the web’s development, influential entities will inevitably attempt to dominate the space. However, VCs are not inherently detrimental—projects that benefit society require funding sources. Their presence signifies the potential for financial gains within DApps and the construction of a new, decentralized, open-source web.

It’s noteworthy how major companies, like Facebook, have actively promoted the idea that “strong end-to-end encryption” is the ultimate solution for privacy, while simultaneously attempting to conceal their extensive metadata collection practices, which are central to their revenue model. We are now witnessing their preparations for the decline of their metadata monopoly, as they explore integrating payments into messaging as an alternative monetization strategy.

Transitioning from a web dominated by five major entities to one with no central ownership will present challenges. However, we are establishing the foundational elements for this shift. Web3 is still evolving and is only just beginning.

Changes in the Tech Industry Over the Past Few Years

You’ve been involved in this industry for a long time. What significant changes have you observed in recent years?

Bitcoin and similar cryptocurrencies have introduced a concept that could no longer be disregarded. The current challenge lies in making this technology accessible to the general public in a way that encourages widespread adoption.

Major platforms have been criticized for exploiting their users, causing significant harm globally. Attendees at the World Economic Forum identified a “lack of social cohesion” as a top concern, representing 27% of respondents—a stark contrast to previous years.

However, the public has lacked a viable alternative. A replacement product with minimal “switching cost” is needed to empower individuals to express their preferences. This is partly hindered by the network effects that reinforce existing monopolies.

The Value Proposition of Web3 and Blockchain

What value does web3 and blockchain offer? What benefits do they provide?

Decentralization promises the creation of self-governing, democratic systems for digital services that prioritize users over corporations. These systems, free from the control of existing web giants or new ones, will empower users to develop their own applications, games, and other innovations more easily.

[Our product also incorporates] quantum-level transaction security, and the transparency of open-source software creates a more equitable environment for individuals and small businesses to generate income through innovation. Decentralization and blockchain have fundamentally altered the dynamics of monetization and control on the Internet.

Web3 can be described as web2 with a moral compass. Most of our digital and financial activities are currently possible, but they operate within a structure that allows a select few to manipulate them for their own benefit.

Security, Control, and Safety in the Digital Landscape

Is the industry progressing in the right direction regarding security, control, and safety?

The centralized web2 environment is continually improving internet security and safety, but often at the cost of privacy and individual control over personal data. The lack of control over one’s own data has become a defining characteristic of the Internet’s monetization model in web2.

The decentralized Internet aims to address this through tokenization and user-controlled keys. However, the slow speeds and complex interactions of current blockchains have led to the emergence of centralized services as intermediaries, streamlining interactions for developers and users. Consequently, the core of the decentralized world has, regrettably, become centralized exchanges and platforms with the same shortcomings as web2.

In the early stages of web2, companies openly discussed ambitions of “world domination,” often using aggressive metaphors. The negative consequences of this mindset continue to shape the Internet today.

The Imminent Arrival of Quantum Computing

Let’s discuss another advanced technology. When do you anticipate quantum computing becoming widely accessible?

Our perspective is that the timing of the availability of general scalable quantum computers is less important than the widespread acceptance that they will eventually reach a point where current cryptographic methods used to protect data are compromised.

The more critical question is: How do we prepare for this eventuality? When quantum computing arrives, it will be essential to migrate critical infrastructure to quantum-secure cryptography, including finance, communications, energy, transportation, and defense. While governments appear to be addressing this for sensitive infrastructure, we haven’t observed the same urgency in the private sector, and many seem unprepared regarding privacy.

This could lead to a scenario where quantum computing becomes available to governments, large corporations, and even malicious actors, potentially allowing them to secretly compromise the public key infrastructure of their competitors.

The result could be widespread disruption of the global economy as companies suspend services until they can transition to quantum-secure cryptography. Centralized services have an advantage in their ability to recover from such catastrophic failures, while the decentralized space needs to proactively prepare due to its limited capacity for rapid response.

Furthermore, there’s the issue of historical data. While we will eventually adopt quantum-secure cryptography, what about the encrypted data currently flowing across public servers? Groups are already storing encrypted messages and key-establishment communications.

In the future, someone with access to a quantum computer could decrypt these end-to-end encrypted messages, and analyzing them will be straightforward with today’s machine learning capabilities. Given the sensitive nature of private communications, this could threaten political dissidents, whistleblowers, journalists, and ordinary citizens who shared information under the assumption of true privacy.

This is why xx network’s focus on quantum security extends beyond protecting assets. It’s about safeguarding your words and actions today from potential future exposure.

The Need for Innovative Tools

Why are tools like yours necessary?

By providing an easy-to-use and accessible application that offers a significant leap in privacy—metadata shredding and quantum security—that others have failed to deliver, we raise public expectations for all communication offerings. It challenges the status quo and prompts questions about the motivations behind other messaging systems. It also provides a secure haven for users.

These tools are essential, just as enumerated rights are in a written constitution. Surveillance enables abuse. When you are under surveillance, your behavior changes, and you avoid certain actions. This applies to everyone, from business leaders to politicians to everyday citizens. I believe in digital sovereignty—the ability for individuals to seamlessly and easily control their own keys and data. This is free speech for the Internet and is fundamental to free association and commerce online.

The reality for most messaging companies is that they monitor your activity to sell your metadata. Even more secure messengers, like WhatsApp, rely on private, centralized infrastructure, creating trust and control issues where users must rely on the good intentions of organizations with opaque incentives. With centralized infrastructure, it’s impossible to know what data is being collected. We aim to change this dynamic with a platform where such surveillance is impossible.