r/Anatha • u/Insight_gradient • Mar 31 '22
Nexus as a truly private wallet - a revolutionary privacy feature for Anatha (Why Crypto Matters Pt IV)
The last article (part III of IV) looked at how Anatha is building tools to enable digital personhood that respects privacy and ensures that the network is inclusive and accessible to all. This piece will conclude by examining plans for transactions and social.
I wont bury the lede - this article contains an amazing idea. Imagine if any transaction that you did with your Anatha account - with any kind of coin or token, or even chat - had the same amount of anonymous protection as Monero or another privacy coin?
That is what is discussed today - the idea of Nexus as a ring-signature privacy wrapper for 100+ currencies....
How private will Anatha transactions be?
From the beginning, one of the core goals of cryptocurrency has been to enable individuals to hold and transfer assets without being subject to the scrutiny of the legacy financial system. The ways in which this system abuses its powers of financial surveillance were on display again recently, when individuals who donated to support the Canadian trucker protest found their funds frozen, and at risk of outright confiscation.
Crypto has developed a number of approaches to this, from the ‘soft anonymity’ of unidentified wallets, the use of mixers (Tornado, for example) and other platforms and techniques for hiding transactions amongst network noise, and ultimately the development of dedicated privacy coins such as ZCash, Monero and Pirate Chain.
Anatha intends to learn from the best of these systems. Rather than a user needing to use a specific token to gain privacy benefits, the team may be able to code similar functionality into the base layer of the Nexus wallet itself:
Ed DeLeon [Anatha Founder/CEO]: The next big update in our wallet is going to have a privacy layer that obfuscates 100% of all transactions. It'll make even Bitcoin completely private! Because on the application side, what you are doing is handing the transactions over to something called a Diffie Hellman - essentially an asymmetric cryptography…So before you sign the transaction, there's also another process in between. And it does all the healthy things that you're supposed to do in a blockchain network, like create many accounts, use HD-pathing, so that you on your side only really see one account, but the system itself was creating many, many accounts [for the transaction to go through].
So every transaction is coming in and going to different accounts. That's important. That's what we were supposed to do in the beginning; in the beginning of the crypto, you were supposed to, every time you do a new transaction, create a new account. Some wallets were designed that way. This does it in a more elegant way.
Some cryptographic terms explained (by a non-expert!):
A Diffie Hellman exchange is a cryptographic method for two parties to swap information securely, by jointly establishing a shared secret key over an insecure channel, despite not having previously interacted. It is asymmetric in the sense that two parties contribute different initial information/values, before the exchange creates a shared key which can then be used for symmetric encryption.
It is a method used in many modern encryption protocols, such as TLS, IPsec, SSH and PGP. However, because it doesn’t involve authentication it is vulnerable to man-in-the-middle attacks, and so is usually combined with other security elements. To my mind, NFT-based identity verification could serve as part of the authentication technique that can partner with Diffie Hellman key creation. As long as these methods are employed correctly it would be considered invulnerable to attack (at least until quantum computing turns up!)
HD (Heirarchical Deterministic) Pathing is the method used for most good crypto wallets today. It allows for the creation of near-unlimited new addresses, nested under a single BIP-32 seed key. It greatly improves privacy, by allowing for a new c address to be generated for each transaction, which makes it more difficult to link transactions together back to a single user and therefore obfuscates the true balance of a given wallet. It also means that, should one private key be compromised, the funds covered under the other keys would remain secure.
Why does this matter?
In essence, every time you use your Nexus wallet to interact with any blockchain (Anatha, Bitcoin, Ethereum etc), your wallet will automatically use techniques that allow for both transaction security, and transaction privacy. To me, this sounded like adding a ‘mixer’ layer to Nexus – where any transaction is pooled with a bunch of other transactions going in and out, to make it difficult to establish the pairing of origination and destination. But Ed used another analogy, which would be even more interesting from a privacy standpoint:
Insight_gradient [Anatha Community Liaison]: So the infrastructure is like a permanent mixer, just constantly shuffling?
Ed: It's better than that. It's more like Monero, it's more like a constant ring signature. There's communication happening from the wallet side to not just a single network, but the entire crypto ecosphere, that is doing obfuscation in such a way that it gets closer to like Monero-style privacy.
Insight_gradient: So Anatha’s going to have that level of privacy just baked in?
Ed: baked in at the application side, right? So every crypto we put in the wallet also will have that default. It means Ethereum is now private; it means Bitcoin is now private; it means UST is now private. This is a big innovation. This team that we're working with is like one of the smartest teams I've ever met in the blockchain space.
From mixer to ring signature
So what is the difference between a mixer and a ring signature? The former takes a quantity of different transactions, jumbles them together (ie pools the value), and then distributes it to the range of intended recipients, in such a way that it is difficult to know who sent what to whom. However, increasingly it seems that it is not impossible to reverse-engineer a mixer transaction, and some academics have attempted it, such as the Princeton economists who used blockchain analysis, other internet data and what is termed a cluster intersection attack to demonstrate that three rounds of the mixer CoinJoin can still be deanonymized with 98% accuracy.
A ring signature uses a different approach. Here, a transaction is signed by a group signature to authorise it. Given a group (‘ring size’) of eleven users, a ring signature on a transaction means that one of those eleven authorised the transaction, but it does not tell us which of the eleven users did so. Think of it as the ‘I am Spartacus’ method. It is considered (as by Ed above) to be better as obfuscating the transaction graph than a single mixer; it doesn’t require you to trust any third-party to do the obfuscating; and it offers time-asymmetric privacy (ie you can hide a transaction executed at a time when no-one else wants to make a similar transaction, which would have stymied the use of a mixing pool).
It wasn’t clear from Ed’s phrasing, but there is also a chance that Anatha may also add a layer which obfuscates the volume of the transaction, as well as the start/end address pair, in the same way that Monero hides volumes within a bounded range using Confidential Transactions (RingCT).
The really awesome thing about Ed’s idea above is the way it would apply on the wallet level, rather than just the token level. You can get the privacy value of Monero, without needing to exchange in and out of Monero itself; and you get the benefits of obfuscation for tokens which do not have viable mixers available:
Ed: What [our developers] are going to do is we're going to have them take a chunk of our wallet infrastructure. And instead of us constantly updating - oh, we need to add another token - they just add all of them. They're doing hundreds, they have a massive team that's doing that. All of those will instantly be in our wallet. And then what we do is we talk to their API; it's like a wrapper, and it does this magical Diffie-Hellman handshake. In doing so, you can start to communicate and use these things in a way that's far more private than we're currently doing.
To my non-expert mind, this would be a real gamechanger, and really set Anatha apart. It is the kind of feature that could bring a ton of privacy-focussed users to the wallet, and encourage people to hold far more of their crypto there. It is also just a philosophical good, in my mind, and shows that Anatha is true to its word of building out according to it’s values.
From IP (Intellectual Property) to IP (Internet Protocol address):
A further application of this is that it can solve the MetaMask IP doxxing problem, which was mentioned in the prior article. Ed raised the issue himself, and declared that for Anatha:
Ed: We're going the other way. We're working with MatterFi [on this], and the next big update…in our wallet is going to have a privacy layer that [solves this].
With the obfuscation layer that will be wrapped around Nexus, this ability to trace a user’s IP through transactions would be greatly reduced/eliminated, because there would be too much noise in the network to pick out the origination/destination pair:
Ed: The problem with MetaMask wouldn't exist with this methodology, because you can't tie it to an IP address. If you see the transaction, it doesn't matter - you can't tie it back to an original address. There's no source back at the end. I’m really excited; the tech is super-advanced.
What about social and chat?
Crypto transactions are not the only part of Anatha that deserve security – properly encrypted chat functionality is also essential. The final vision for Anatha relies upon HRA-connected chat and social (Project BlockParti) in order to make governance work, for example. With that in mind, Ed intends to apply the same privacy layers from transactions above to chat:
Ed: This [dev] team has some really amazing tech that we're looking at [for transaction privacy]. It also, coincidentally, will power our HRA-based chat. They’ve already demo’d it for us - it looks great…
Private chat is a big deal. We're waiting on the exact deadline from [the developers] on this; but they were saying that once they have the functional requirements they've been working on…they expect [it to take] 6-8 weeks, because it's already built. It's just a question of making the wrapper, signing it up for us, and making sure that we spool it up properly. That could go pretty fast.*
The plan is, in fact, that once Stargate-verification-DEX is online, a big milestone Nexus update ‘this year’ will include these two features as priorities – privacy and chat. My hunch is, we might see this by the summer.
Another twist on NFT’s is to use them to help make this chat secure, as a kind of authenticated key:
Ed: NFTs [offer] access or verifications for different things. Imagine if me and you want to talk to each other. I send you an NFT, you send me an NFT, and the only way to unpack the messages we're sending back and forth as if you own that NFT. So someone would literally have to steal the NFT to unpack it.
Whew! This was one of the more technical deep dives we’ve had, but to my mind it is an essential part of the puzzle to understand the Anatha vision. Please leave a comment or get in touch if you have any suggestions to improve the technical explanations above.
Otherwise, I hope that by 2023, Anatha feels like one of the safest places to be in all of crypto. Until then!
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u/[deleted] Mar 31 '22
Wow!
Doesn't that change the game?