Credentials and Privacy - History and New Kinds of Cards

It's a pleasure to be here virtually in Berlin. You know, I have to say that I was in Berlin when the wall fell right. The actual day I was there at a, at a conference cryptography. And, you know, prior to that, I, I took it upon myself to visit east Germany, not just east Berlin, but east Germany and spent several days driving around in a planned private tour with a friend of mine and visited a bunch of places. I met a lot of people. It was quite an eye opening experience, but I, I, I've got some interesting information for you. I think that both retrospective and prospective, you know, I think that the present previous presentation kind of sets the stage for the sort of current middle part of it. But I'd like to show you a little bit about the history of this technologies that you've heard about, right. And give you some hints as to where sort of profound change in them that is imminent, but I'm, I'm not at Liberty to discuss it in great detail here, but it, it, you know, watch this space. It will, it will be come out quite soon.
So let me, if you don't mind ask you to think back to like 1982 long time ago, sort of before the internet, before, you know, the web, it was very early days and I was a graduate student at Berkeley. This is where the story starts. And I was thinking about information technology and the profound significance it would likely have for shaping society in the future. And I realized that cryptography that is all this stuff around secret codes and zero knowledge. And what have you, cryptographic protocols more generally are the only effective way to create effective structures in the digital world.
So absent cryptography and cryptographic techniques, there's there's, there are no there's sort of no walls. It's, everything's transparent, there's no rules, there's no effective way to ensure that things are done or were done or will be done and, and so forth. And there's in particular, there's no way to prevent flows of information, UN undesirable flows of information. And of course, it's, it's all about the information that's the whole game. So, so cryptography to me would take a central role in, in shaping the informational world that I saw as inevitable, even back then, very early days. And so one of the things I did was develop technologies that could protect privacy while allowing people to do the kinds of transactions that they want to do. And so one, a natural type of transaction was payment. That's pretty essentially the, in the, you know, commercial world and another type of transaction is a vote casting, right? That's pretty important in the public sector, at least the democratic form. So I, I focused on those kinds of transactions, as well as communication underlying them. And I, I came up with some, you know, relatively simple, but surprisingly powerful examples of how these things could be done while protecting, you know, protecting both sets of interests, the security of society against abuse by individuals and the privacy of individuals against abuse by whoever might tap into the data.
So realizing the importance of this sort of thing, and reading at the same time, being a graduate student, you know, in science magazine that the national security agency was asking all scientific organizations, not to hold conferences on cryptography, not even sessions at conferences. In fact, the new director of the national security agency was threatening organizations with the full force of the us government, if they were to, you know, have such a session. So realizing the importance and being a graduate student at Berkeley in those days, I did the only natural thing, which was to organize a conference on cryptography. And, you know, I did this, I had to do secretly, you know, without using the phone and we, you know, all kinds of stuff, mailed the labels, the, the printed things and the, with labels, we pasted on et cetera. And pretty much everybody that was interested in this sort of thing at the time appeared at the conference, there was over a hundred people there and it, you know, what I realized now, retrospect is, you know, I could have spent the rest of my life in jail, right?
I mean, this was a crazy thing to do in a sense, but it was an important thing because at that conference, you know, as the, as, as the, you know, organizer of it, I made the introductory remarks. And I told people that they're a hundred dollars, whatever. I think $80 fee for attending would constitute their membership fee in a new international association for cryptologic research, which was just, you know, I was announcing, was founded and we had officers and we had another conference that was gonna take place in the six months in Udina Italy and, and everything. And so, you know, international scientific organizations are, are protected under an umbrella of, of a lot of UN structure and, and so forth. So basically that changed the whole game. And, and this organization, I could show you pictures of it, but it, it exists today. Well, I guess if you go here, let's just quickly go to sean.com.
And then if we go down to the projects here, we can see the ICR founding, why not? There are these, these were my co-conspirators. They ran the program committee. I was the general chairman and we published this book in, in 82 and, and so on. Okay. So any event, so lemme just Facebook mark. So, oh, slide here. We'll still keep it here. So this was, I think, a, a, a whole sea change. It sort of set cryptography free if you will. And I presented a paper at that conference, a single paper, and it was called blind signatures, untraceable payments. And you can see it on, on, it's been referenced about 5,000 times almost now, and it is a, a new kind of, it is basically digital currency.
It is a, it is numbers that are worth money. So it is, I can, I, I will explain to you how it works, because it, it was in my view, a kind of precursor to the attribute credentials that you heard about in the previous talk, which I called credential mechanisms at the time. And it was my hope that by issuing this new type of electronic money, what would happen was that people would start to see and, and sort of maybe viscerally feel that they could actually protect their own privacy by holding exclusive exclusively information in their own custody in their own compu pocket. You know what I call the card computer, which we would now call a smartphone, the computer that was their own, that was protecting their interests. And so that, that feeling of, of empowerment and sort of the naturalness of it would start to extend to other uses simple credential uses such as you know, so you would be anonymous and private when you made a payment and I could go to the details, but I hope that it would extend to things like simple things like borrowing library books, you know, library card.
You wouldn't have to reveal your identity to, to borrow library cards, but you'd only books, but you'd only be able to borrow a limited number and you'd get, you know, when you return them, they would be credited against that pseudonym and so on. And this, and the, the use of this would start to percolate out into society. Once people realized that it was possible and got a feeling for it, that's part of my motivation for pushing this E cash electronic money forward and pushing forward. I did. And I guess I can just show here the E cash page here. So this, you know, we, we issued E cash in 82 and what I want, and we had the cyber bucks and so on that with a hundred people that accepted our own currency, but later just the der connection here, actually Deutsche bank issued E cash in denominating Deutsche marks in those days.
And these are, you can see the press releases and all here. I guess I have a slide on that later, but that was, you know, an effort to get this idea out. There was the first real form of electronic money, and it was based on this concept of blind signatures, which I'm going to explain verbally because they are, in fact, the essence of these credential mechanisms, the credential mechanisms are actually what you would say. Technically, you might refer to it as a simply a generalization of the notion of a blind signature. It's just taking the idea of a blind signature a little bit further. So the way that E cash worked is, and I think this, this will be helpful is that, you know, you would be known to your bank by your bank account number and your name and, and all as today, however, you could withdraw E cash kind of like you withdraw paper, money from an ATM.
You could withdraw E cash in online from your bank account. And the way that would work is that your computer, your smartphone, if you will, would create itself at random the bank, the serial numbers for the bank notes that you wanted to have. And if you choose a really large number at random, the chance that someone else would've chosen the same number or will choose it is negligible. So your, your phone chooses a very large serial number, and then it, it performs a, a kind of encryption on it. It's a special kind of encryption, which we call I call blinding. And it is like regular encryption in that you can't see the number once it's been blinded, but it has a special property. And so what you would do, your phone would send those. Let's just talk about withdrawing, a single dollar for simplicity, clarity, send this blinded serial number to your bank and ask the bank to digitally, sign it, to validate it as being worth $1 with their special worth $1 key signing key that only they have, and only they can perform that digital signature operation on it.
They would return it to you still, they wouldn't know your serial number, but you having formed the blinding could unblind it. And now you would have the bank's clear signature on your chosen serial number. And that was, anyone could see is, was valid money signed by the bank because that's like the way digital signatures work. If they're on a, a thing that's of a well defined form, then that, that means they're a valid digital signature. So you could spend it at a shop. Now, the only question would be, you know, had you spent it previously. And so the shop would check online with the bank and the bank would look the serial number up and say, no, it's not been spent before. Okay. We will honor it. Just send us the digital signature and we'll put a dollar in your account, Mr. Shop owner. So that's, that's the blind signature E cash digital payments, which was working in Germany over the web, back in the nineties.
And, you know, I had to meet with a board at Deutsche bank and convince them to do this. And they were very excited about it. It was a whole, quite a, quite a project. And I, I must say we had issuers all over the world at different banks and different currencies, but Deutsche bank was the most thorough and security conscious and careful. And they were the, our like key customer that we learned the most about what was all the different backup and things that were needed, the banks could ever ask for. So it was, it was a great relationship with them.
So the next question is, so what is, how does this relate to credentials as, as I promise you, I would tell you, and I do have a slide that, oh, well, yeah. So I published this, the credential mechanism, unlike what you heard in the previous talk, which I think was maybe a little historically inaccurate. This appeared in 19 80 92 in scientific American. And it also appeared previously in German. It was translated into German twice, once in the, this a publication of the, the German informatic or three times actually German informatic society at the time, once by the German privacy data, privacy D U D or something organization. And once it, because it was, it appeared in scientific American. So it was in spectrum D Western chef, if you'll forgive my bad German. So this here it is encrypted IDs for digital privacy was right on the cover of the, of that issue.
And here's, oh, here's the thing about Deutche bank. Okay. But here's an illustration from the scientific American article and you get the BA basic idea of the credential mechanism. So it's, it's basically a blind signature that you, you, you, you request this how clear this illustration is. I think the ones in the German article were a lot better, but right now they're, they're, I wasn't able to put them in this, in this presentation, but the, basically they sign it blind with this, this kind of IM premature. And later you can remove that the blinding and now give in effect to zero knowledge proof that you have an engineering degree based on your base credential, as well as whenever other stuff you want to show in order to get this, this job. So you can answer questions like this, you know, do you have any, do you qualify under any of the following criteria without revealing even which criteria or exactly how you, how you satisfy it? So that was the, the idea of what I called credential mechanisms. And, oh, so last slide on that.
There is a, another shoe to drop in this space, and I'll just give you a bit of a teaser on it because I'm not at Liberty to really go into the details here, but I think what you can easily understand from what we've heard like in the previous talk and what you probably have already know is that not much fundamental new has occurred in the very central and challenging area of individual identification since maybe 1992, apparently now, and, and the, the, you know, and the, and the precursors to that article, the more technical articles in longer one. So there is plenty of room for something new and maybe one of the ingredients for that might be blockchain and that sort of thing, because it, it does create a new level of permanence and transparency of information that seems, you know, helpful for kind of recording at least some public aspects of these credentials and so forth, another ingredient, which could make something really powerful and new is smartphones. So there most people on the planet are getting smartphones and have connectivity. We'll see a little bit about that. If we have a chance to get into the, the payment part, I think I've gone a little over on this part, but those are, this is a very different reality. Now, having those smartphones in people's possession, and it it's extremely powerful mechanism. So we could probably use that to some real advantage.
I think that there's a, a third new thing that's kind of really big, and that is a bit of amorphous, but essentially it's kind of a combination of the fact that people don't really want to give their identity to. And they, you know, they're built new kinds of structures are being built to, to cater to what people want. So there's this notion of web two versus web three. And if you look at the public opinion, studies related to this, the big thing, the main thing that people don't like about the current web web two is the privacy that it affords them. And the fact that they don't have control over their data, which is essentially the privacy issue that credential mechanisms solve. So, and what they hope to get from web three, which is kind of information now is a solution to these problems. And the interesting thing about blockchain in my opinion is really fundamentally that the technology's been known since, you know, you could look at my dissertation on my website, you'll see it was in there already. The, the, and there's been articles about that. The, the thing is it's not the technology.
It it's that it's so much outside the control of the powers that be, why is Bitcoin interesting? It's because I think to a large extent in this respect, at least because it's, it's not controlled by governments. And so it's doing what people wanted to do, and that's what that's the potential of the web is to do that sort of thing. I mean, of the, of, sorry, web three. And so that's complete sea change. It's not, it's no longer up to nation states to control identity fully. So in cyberspace, in the web three environment, there may be new kinds of credentials and identity that are what people want. And this is a building of fresh. It's not gonna be related to the carrying of specific chip cards. If you go back and look, I organized the first conference international conference on chip project. You can see it on my website, smart card, 2000 in Austria.
I mean, it's, you know, I know about this stuff. And I was lived in Europe for many years, and we were the beneficiary of a lot of brands back in the day to work on credential mechanisms and all this stuff. And, but I can tell you that I think that the web three excitement and the smartphones and so on is probably gonna mean that the, the, that somewhat of a disenfranchisement of, of state issued identity and much more, about, much more opening for a new kind of identity that really empowers individuals. So there's an opening for that, but there's been no new vision for what what's needed in a new kind of identification, technology and credential mechanism, if you will. And I believe that I have stumbled upon a way to do that. That's fundamentally different and so much more empowering to individuals and actually protect society in a fundamentally important way, extraordinarily important way.
That will become more critical as we move into a more digital era. So watch this space look out the inalienable. If you're interested right to me@davidatcharm.com, I'm happy to talk to you about it and keep you on the list. But right now it's a little bit embargoed, but there's a real, there's another big shoe to drop in the digital identity space from the guy who basically invented credentials back in the day and risked his life to make cryptography be something that was available to the public. So that said, I'm, I hope you appreciate my, my frankness and willing to speak to you extemporaneously about all this. And I hope you, you gained some perspective and insight and curiosity about what's new what's coming down the road, and yeah, and it was like a virtual pleasure really to be with you all and to be in, in, in, in Berlin and, and thanks to the organizers and everyone, and yeah. Hope everyone has a great conference. Thank you.