David Chaum, Inventor of DigiCash, Sets Out to Build a “Better Bitcoin”

David Chaum, 63, showed up at the Consensus 2018 conference in Singapore with an idea to revolutionize Bitcoin (BTC). Chaum is considered one of the early birds of applied cryptography, after proposing the DigiCash electronic money in the 90s. However, the technological infrastructure was not there yet to have a crypto asset built, and it would take years before Bitcoin appeared on the stage.

Now, Chaum has founded his own startup, Elixxir, and plans to build a blockchain allowing for enterprise-level transactions. He promises thousands of transactions every second, but has suggested block producers would need to be more centralized.

The chief idea of Chaum is to first create blocks, then attach the transactions to them.

“The blocks in this new system wouldn’t contain the actual transactions, nor would they be linked to digital wallets. The result is a network that both processes and stores less information, reducing security vulnerabilities and cutting down on the energy needed to run it, Mr. Chaum said, quoted by the Wall Street Journal.

However, such a solution may go against the principles of the cryptocurrency community, where some believe the slowness and redundancy of Bitcoin are its chief feature as it ensures security.

In fact, producing thousands of transactions per second and verifying them cryptographically has been done multiple times, under both test and real conditions. But this feat has a few problems - first, it limits the difficulty of calculations. And second, it makes the network semi-centralized, or even fully centralized. Bitcoin maximalist Jameson Lopp, criticized the DPoS (Delegated Proof-of-Stake) model:

https://twitter.com/lopp/status/1042604072501690368

Networks like EOS have already worked through thousands of transactions in one second, but using only 21 block producers. The Elixxir startup may use a similar idea of a handful of selected block producers, instead of competitive mining. Some form of delegation for faster transaction processing already exists with DASH, TRON (TRX), Lisk (LSK) and Tezos (XTZ) and other networks where block production is limited to a handful of delegates.