Nym, the project that aims to (totally) protect online privacy

Take the case of the IP address: the IP address is the identification number allocated to all devices connected to the Internet (most often the router).

Every time you carry out an online transaction, you leave a fingerprint and a telecoms operator is able, if it wishes, to trace it back to you.

This system works with an e-mail, a purchase on Amazon, a message sent via WhatsApp and Telegram, or a transaction in... bitcoin! By reconciling the date of the transaction and the metadata, we can easily identify the owner of a wallet.

Companies like Orange, T-Mobile, O2 or Vodafone can thus know that you have a wallet and that you use cryptos, without you even having declared it (you're not obliged to). 📡

It was in an attempt to get around this problem that several partners set up Nym in 2018. Based in Neuchâtel, Switzerland, the company has developed a blockchain infrastructure capable of masking all your metadata.

"If you want a communication to be truly private, you have to hide its content with cryptography and, above all, mask its existence," explains Alexis Roussel, COO of Nym Technologies.

"In the case of cryptos, my phone operator doesn't have to know that I have a bitcoin wallet. Nothing obliges him to have this information", continues the Swiss entrepreneur.

Alexis Roussel is a historic figure in the bitcoin community. Close to the libertarian movement, in 2014 he co-founded the crypto broker Bity, one of the very first European exchange platforms (find out more in his interview conducted as part of our report).

Electronic noise" to muddy the waters

Nym's operation is based on a concept defined by cryptographer David Chaum in the 1980s: the mixnet (for "mix network").

In this system, all electronic communications (crypto transactions, emails, photos or videos) are cut up and sent over the network in the form of packets (blocks of data) of identical size so that they all look the same and cannot be identified. 📦

Whether it's an email or a video, all the packets look the same. Above all, each one will take a different path through the network, which distinguishes Nym from a network like Tor... On Tor, up to now considered the most effective tool for using the Internet anonymously, the path of a communication is the same for five minutes!

To further complicate surveillance, each packet is more or less randomly slowed down. This makes it possible, in particular, to mask where users are located on the network.

Finally, 20% to 30% of traffic is made up of empty packets sent over the network.

All of these elements, taken together, constitute "electronic noise" that prevents any entity from monitoring the network. ❌

We asked Renaud Lifchitz, an IT security expert who has had the opportunity to manage a Nym node (independently) in recent months, what he thought of Nym:

"Nym has the advantage of VPNs, in that it allows the user to mask their IP address, without the disadvantages of a centralised protocol," he explains. VPN providers can in fact know their users' real IP addresses and pass them on to the authorities if they were to request them...

"Since Nym injects superfluous packets to defeat attempts to statistically analyse traffic, it seems more robust than Tor."

What are the concrete use cases for Nym?

The first use for Nym is to hide the possession and use of a crypto wallet from telecoms operators (and therefore de facto the authorities). But it's also useful for concealing communications made via instant messaging (WhatsApp, Telegram, etc.).

From the point of view of the network, someone using Nym only gives the information that they are connected to the infrastructure. After that, it's a black hole 🕳️.

According to the Nym team, even Apple or Google, who develop the operating systems for iOS and Android smartphones, would be "blind".

"The whole digital economy is based on metadata, not the content of discussions. It is important for citizens to be able to protect them at a time when the means of surveillance are becoming ever more numerous and powerful", insists Alexis Roussel. 🖥

Activist Chelsea Manning, a former US army analyst famous for leaking confidential documents about the war in Iraq, is involved in Nym.

How to use Nym today

For the moment, only the Electrum bitcoin wallet (available on computers) can connect to Nym. But others should be compatible soon. The biggest challenge will be to ensure that Nym is directly integrated with the wallets to make the experience smoother.

As far as instant messaging is concerned, it has been possible since 2022 to use Nym with Telegram and Keybase (again on computers only). Nym Technologies is expected to offer its own mobile application during 2023 to make it easier to connect to most messaging services.

Also, since Nym is open, any project can be developed on it and new services are beginning to emerge. This is the case with Pastenym, which is inspired by Pastebin, and enables messages to be sent completely anonymously and undecipherably to a person who holds the decryption key. The tool has been developed by No Trust Verify, a small team based in Neuchâtel.

"When using a site like Pastebin, it is possible for someone to detect actions carried out by users, such as retrieving or sharing a text," points out co-founder kov0x, a member of The Big Whale community. "Pastenym solves this problem thanks to the mixnet."

What is the blockchain used for in Nym?

The mixnet is not based on a blockchain. It is a fairly traditional network infrastructure.

On the other hand, a blockchain (developed on Cosmos) is used to establish the position of participating entities (because they have to register on it). It also remunerates the nodes that provide the mixing.

The latter receive the transaction fees paid in NYM tokens by users. The capitalisation of the NYM is currently $100 million.

Its existence is fundamental because it ensures the protection of the network. As with Ethereum, an attacker needs to gather a large quantity of tokens to take control of 80% of the nodes (currently 250). At present, the theoretical cost of an attack is estimated at around €40 million. The more Nym is used, the more the cost of the attack will increase.

Note, however, that this approach is only theoretical since Nym's economic model has never yet been put to the test.

"These economic mechanisms allow the mixnet to have real resilience," assures Alexis Roussel for his part.

In addition to this system, Nym has taken inspiration from the bitcoin protocol to "ensure that any malicious participant (who "tints" a packet so that it can be identified, for example) is excluded by the network", says Alexis Roussel. This is called "proof-of-mixing".

Another token, the NYX, acts as a governance token. It should soon be publicly available.

Prestigious investors... and full coffers

The project has raised $50 million in 2022, making it one of the best-funded in Europe. More importantly, the venture capital funds that participated in the deal have pledged a further $300 million to develop the ecosystem. Among them are the Americans Andreessen Horowitz and Polychain.

The European Union has also awarded several grants as part of its Next Generation Internet initiative aimed at promoting a "human-centred Internet".

The interesting thing is that telecoms operators have also invested in Nym. This is the case with Swisscom and other German telecoms companies, not least to use the protocol.

"Internet services collect countless data about their customers. Many don't know what to do with it. Some resell it in the form of targeted advertising, but others are faced with managing it, which has a significant cost, particularly since the European RGPD regulation," says Alexis Roussel.

"The idea is that if they use Nym in the relationship with their customers, they will be able to limit themselves strictly to the information they need to provide the service. They won't have to worry about the rest", he continues.

Can Nym find its market?

The project is still very new and there are currently a modest number of transactions (around 500,000 8-kilobit packets deployed daily on the network at present). By way of comparison, a single e-mail weighs between 20 and 60 kilobits.

We put the question to Stanislas Bathélémi, crypto expert for KPMG to find out what he thought.

"The aim of developing a privacy layer is necessary and useful, but the overriding issue is the adoption of this type of solution so that it doesn't remain a niche subject," he says. "Nym needs to move forward on this part to demonstrate at scale that it's a better solution than VPNs or Tor. We need to move beyond the promise stage," says the expert.

For IT security specialist Renaud Lifchitz, "the Nym project offers a very interesting system, but it still needs to prove itself, particularly with regard to its business model, which has not yet been validated, its software, which lacks stability, and the small variety of services available."