Interview

E-cash inventor David Chaum on making a comeback, pre-empting bitcoin, and keeping Satoshi anonymous

Quick Take

  • David Chaum, an early innovator of digital currency, tells The Block that modern blockchains are “a step backwards” from his initial vision
  • He notes his graduate-school thesis, written in the 80s, pre-empted all but 1 of the key elements in Satoshi’s 2009 white paper
  • Amid the renewed debate over who Bitcoin’s creator is, Chaum says he’s comfortable with Satoshi Nakamoto remaining anonymous

David Chaum occupies a peculiar position in the peculiar world of crypto. He isn’t one of the teen-genius cryptographers or a 20-something blockchain CEO. He moves among the upper echelons of “insiders,” but also seems to remain staunchly on the periphery. He’s an OG, but also a novelty.

But regardless of the 63-year-old’s status today, his place in crypto history is undisputed. Having founded DigiCash in 1989, the world’s first electronic money system, he is known as the forethinker of digital currencies. He holds that crown tightly, with DigiCash having made him a temporary icon. “People recognised me in the 90’s because of all the media attention … I was clearly way ahead of anyone else doing it,” he tells The Block in Paris. He’s not exaggerating; Chaum’s invention of a digital bearer instrument (DBI) offered individuals the right to transfer virtual assets without having to share personal information (as with physical cash; there are no records of whose hands it passes through). 

While DigiCash never gained traction with users – a victim of the pre-internet era – Chaum has now returned to the limelight with his own bitcoin competitor, Elixxir – a DBI-based blockchain.

“I get this feeling like I really should have been more active in this space earlier. But the truth is, we built Elixxir privately and then only started talking about it once it was really working,” he says. “I guess I’m a little bit old fashioned,” a nod to the fact the crypto space has seen much preemptive hype. 

He describes Elixxir as ‘WeChat with blockchain inside’; using the China-based payments & social media app as the central inspiration. Elixxir then brings the added benefits of offering secure dApps over normal apps “that are [] limited by their inability to keep secrets” and sell people’s metadata; a powerful combination Chaum believes his peers have neglected.
 
“It’s been essentially proven that in order to achieve [crypto adoption] you need a messaging system that allows payments…That’s why all the major messaging platforms are fanatically trying to integrate payments,” he says. But Elixxir wants to go further by offering privacy too. “Facebook raised the notion of metadata to a level where the public were aware of it… I think it’s struck a nerve with the general public.”
 
The Elixxir blockchain is yet to launch, with no fixed timeline in sight beyond an upcoming BetaNet. It promises significantly fast and more energy-efficiency transactions, reducing the competition among nodes by treating them equally rather than a mining system
 
“We’ve found a superior way to do all the key things: consensus, integration of messaging and payments,” he says, arguing modern blockchains’ abandonment of DBI-enabled solutions is a “step backwards” for privacy and information-ownership.
 
In fairness, he has a sizeable foot to stand on with his claims; academics who unearthed his 1982 dissertation at Berkeley found key similarities with Satoshi’s Bitcoin 2009 whitepaper. “All the elements were anticipated in that [unpublished] 1982 thesis, except proof of work.”
 
But there’s a big difference – Chaum is a public figure of sorts, while Satoshi is not. His identity at least hasn’t been confirmed (though several claim to be the brains behind the name). But Chaum says it’s better to keep it that way.
 
“I live in LA and the LA motto is it’s all about telling a good story. Satoshi – it’s part of the story. It’s helpful to galvanise people.”
 
“The whitepaper was responsible for creating a community,” he said.
 
Chaum also adds that the story is a long way from being complete, noting the extraordinary amount of work still to be done. And, he notes, Satoshi’s vision is a long way off being realised, with Bitcoin having become more of a “store of value.”
 
“The instinct was right, the first ten words of creating a peer-to-peer consumer cash. But it didn’t turn out that way.” 
 
While we may never know who Satoshi is, there is something reassuring about being able to speak to his (or her) precursor.  Chaum is a rarity among interviewees, delivering long, pensive pauses before answering, and openly admitting when he feels ill-equipped to answer a question outside of his expertise. For what it’s worth, he also says he’s still in the space out of “pure altruism”, having endured personal sacrifice to commit his career to his the concept of a usable digital currency. 
 
He may be outside the main hub of crypto elite, but something seems to suggest that Chaum has chosen it that way; at least in part.