Satoshi did not invent anything new

The pioneer of Russian cryptography and director of technology and innovation at EncryptoTel, Andrei Chmora in a special interview

How 90s Russia was interested in the idea of creating electronic money, how Bitcoin appeared and whether it is worth waiting for the refusal of the Proof-of-Stake algorithm, and more in our exclusive material.

- You have been working with cryptography for several decades. When did you start studying this topic?

- I started to practice cryptography after the “perestroika” period and the collapse of the Soviet Union. For me, the topic was new and therefore seemed interesting and worth careful study. Before that, I was engaged in the development of noise-tolerant coding at the Institute for Information Transmission Problems of the Russian Academy of Sciences, algebraic codes in particular. As a coder, I faced tasks that are directly related to cryptography, such as a discrete logarithm problem, but it was the 90s when I decided to switch my focus to cryptography.

The first surge of interest in cryptography occurred in connection with the development of payment systems. But before the appearance of cryptocurrencies, there was no such massive interest in cryptography. Large investments flowed with the rise of Bitcoin, and then it suddenly became clear that there are very few real experts in cryptography.

- When did you find out about Bitcoin and what grade would you give it in terms of technology?

- The money generated by cryptography was discussed by the international cryptographic community long before the appearance of Bitcoin and White Paper by Satoshi Nakamoto. I had an article in the late 90s about electronic money, which, according to the technological description, can be called “proto-cryptocurrency”. Satoshi proposed a specific technology, but it was built on what was already known and described. Before Satoshi, many people were engaged in electronic cash, they were simply not called cryptocurrency, and the term Bitcoin had not yet been invented.

All electronic cash, including bitcoin, is simply information that is stored and transmitted as a sequence of bits. Information, as you know, is easily replicated, and it was then, at the very beginning, before the Bitcoin, that one of the fundamental problems of this area was formulated — the problem of double spending of electronic cash (double spending). From a scientific point of view, Satoshi Nakamoto’s document was nothing breakthrough, but he picked everything that was known at the moment, assembled and turned into a contensive technology. Some believe that this kind of activity is the essence of what is commonly called “innovation.”

- Can Proof-of-Stake replace Proof-of-Work?

- All these algorithms are built to solve specific problems within the framework of cryptocurrencies. In this case, the PoW-algorithm is unlikely to disappear somewhere. Firstly, it is used in Bitcoin, and this is the most popular cryptocurrency. Secondly, this algorithm, although extremely energy-intensive, is the most proven.

- Tell us about your latest developments in the field of cryptography. What are you working on now?

- Currently, I cooperate with the EncryptoTel company and develop various technologies for blockchain services. One such development is a new identification protocol for checking affiliation with the local community. Imagine that there are two sides — one knows the secret and wants to sell it, and the other wants to buy this secret. Problem: in order to sell a secret, you need to somehow disclose this secret, because the buyer wants to make sure that the seller actually has what he needs. But as soon as the seller reveals the secret, there is a great risk that the buyer will no longer pay for it, because he has already received the necessary information. Identification protocols are created for such situations, this is a game for two. There is someone — he is called “prover” — who owns a certain secret, and there is someone who is “verifier” and he is trying to understand whether this is true. The prover uses the protocol and convinces the “verifier” that he really knows the secret, but the secret itself is not disclosed. It is called a protocol with zero disclosure.

Our latest development is a new version of the protocol with zero disclosure, which allows us to demonstrate and make sure that one of the parties has some information, but which is not disclosed. At the moment, the development is undergoing the according expertise. We will get to patenting after we receive a positive conclusion.

- Where can this protocol apply?

- Protocols with zero disclosure have many practical applications. Consider the following task: for example, a scientific conference is being held. In addition to the participants there is a committed registration center. Each participant goes through the registration procedure, during which he is assigned a unique identifier. Different types of interaction are allowed: between registered participants within the local scientific community and between registered participants and all others.

Suppose that full-fledged functioning is possible only if the subject is able to confirm his membership in the local scientific community. This task has several solutions. The first and the most simple one is to make lists of identifiers and then distribute it among interested parties. But there are many shortcomings: a lot of overhead that will arise during the transfer and storage of the list. So, if only registered participants have access to the list, then overhead costs are associated with ensuring the confidentiality and integrity of information distributed over unprotected channels and stored in the personal devices of the participants. In addition, it is impossible to avoid disclosure of identifiers if we are talking about the proof of belonging to the local community when a registered participant interacts with outsiders (unregistered) subjects.

The second solution, which was also created as part of the work in EncryptoTel, is to certify EDS identifiers through the registration center which certifies the identifiers. The center then passes these identifiers to the participants along with the signature. So anyone can verify the signature using the public key of the registration center. Signature validity confirms local community membership. Now this check can be performed by anyone, including an unregistered subject, but at the same time the identifiers themselves are transmitted in open form. Our identification protocol allows us to solve this problem avoiding the problems that are listed above.

- Do you have already patented development?

- There is a patent on transaction binding technology. It can be used to solve a variety of tasks. One of its applications is the extension of the functionality of instant messengers through which it will be possible to transfer some information containing responsibilities. For example, two people decided to make a deal using a tool such as instant messenger. Both parties of the transaction exchange some messages that reflect the obligations of the parties. These messages are connected in a single chain using the mentioned technology and then placed in the blockchain. Thus, we get a certain instrument that allows us to establish the responsibility of the parties in the event that one of them refuses to take on the obligations assumed in the transaction. The technology of linking messages will not allow changing their contents, rearranging, manipulating them. The synergistic effect is achieved through the use of blockchain, which, as is well known, guarantees the persistence (immutability) of the information stored in it. In the event of a conflict, the mentioned tool allows to broaden and substantively enrich the evidentiary base necessary for rendering a verdict during the trial.

This technology will allow the use of electronic communication not only for the exchange of irresponsible messages, but also for the conclusion of transactions and other important operations involving the fulfillment of obligations.

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