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Edward Snowden Revealed As Key Participant In Creating $2B Anonymous Crypto
The notorious whistle-blower acknowledges he was the sixth person who participated in an elaborate 2016 ceremony that led to the creation of zcash, a leading privacy protecting cryptocurrency.
Harshvardhan
8:01 28th Apr, 2022
Adoption

In the fall of 2016, the cryptocurrency world was aflutter with excitement about the creation of a new kind of cryptocurrency, zcash. Unlike bitcoin, which is designed to be completely transparent – and trackable – zcash was coded to hide all information about a financial transaction, including not only the amounts involved, but also the public keys. That meant that prying eyes could no longer follow the cryptocurrency as it changed hands. Developers of zcash, at the Denver-based Zerocoin Electric Coin Company, used cutting-edge math that allowed an individual to prove a truth, such as that they owned an amount of cryptocurrency, without even revealing what that truth was. It’s called a zero-knowledge proof. Math would do the work, no humans needed.

But to start the process—ironically—these proofs require humans. In the zcash creation ceremony six individuals each performed a number of different tasks that resulted in them—hopefully only briefly—possessing a sliver of the private creation key, which if ever united would allow the printing of infinite untraceable cryptocurrency. The finale of the ceremony, which was held in locations around the world in October of 2016, was the destruction of these keys. As long as just one of those six people destroyed their part of the key the ceremony was a success.

At stake was a world where private individuals could still spend money privately without nation states or big businesses monitoring – and monetizing – them. Shortly after the so-called genesis block that created the $2.1 billion blockchain, five of the six ceremony participants revealed their identities. They included CoinCenter researcher Peter Van Valkenburgh, and bitcoin core developer, Peter Todd. But the sixth person, using the pseudonym John Dobbertin, remained unknown until today, when whistle-blower Edward Snowden.

“When we look at cryptocurrency,” said Snowden in the recording, which was made for a documentary by Zcash Media about the history of the coin, “we generally see the cryptographic properties of it being used to make sure it's a fair ledger, but not that it's been used to ensure that it's a private ledger. Bitcoin quite famously is an open ledger. The problem with that is you can't have truly free trade unless you have private trade. And you can't have a free society without free trade.”

Snowden’s interest in privacy-protecting technology first came to the attention of Zooko Wilcox, co-founder and CEO of the Zerocoin Electric Coin Company, now called the Electric Coin Company, when Snowden spoke virtually at an event on privacy at Bard College. There he described the role of privacy technology like the TOR internet browser that obscures identities, in giving normal citizens a sense of being alone. Wilcox was looking for people who were already adhering to stringent privacy practices as part of their daily lives to participate in the zcash creation ceremony. And who better than Snowden, the former NSA contractor who had leaked 9,000 classified and unclassified documents, largely about the United States spying on its own citizens, before fleeing in June 2013, and taking refuge in Moscow?

Wilcox reached out to Marcia Hofmann, a longtime veteran of the Electronic Frontier Foundation, the influential Internet civil liberties group, who connected the two. In the fall of 2016 Wilcox set up a computer at a rental property in Colorado where he could customize privacy features to ensure there were no eavesdroppers in the conversation. When Snowden first appeared on the screen Wilcox was star struck. “Ed’s revelations were really validating for the kind of defenses, the kind of safe infrastructure that I had been trying to build for society, and other people had doubted,” says Wilcox. “His revelations showed people that I had been right all along.”

After Wilcox gathered his composure and addressed a few of Snowden’s concerns about the privacy of zcash, the two agreed to work together. Wilcox assigned him the pseudonym, John Dobbertin, as an homage to Hans Dobbertin, the late German cryptographer best known for tracking down weaknesses in cryptographic algorithms. In addition to the pseudonyms, Wilcox required that the hardware used in the ceremony be “air-gapped,” meaning it has never been connected to the internet in any way.

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