A Deep Dive Into Nym: The Next Generation Of Privacy Infrastructure

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Threats to data privacy are constantly increasing both in volume and complexity, and few understand this better than the team at Nym. Nym is the next generation of privacy infrastructure which protects users at the network layer. We sat down with several Nym contributors to break down what they are building and how Nym, the native token of the Nym mixnet, is used to provide privacy for users of the Nym network.

1. To begin, what is Nym and how does it utilize blockchain?

Nym is a privacy infrastructure. It’s primary technology is a mixnet that provides privacy at the network level. The Nym mixnet removes the metadata of communications from any internet traffic. Metadata is the data about data such as who you talk to, when, where, from what IP addresses and so on. Metadata is the language of machines, and because most surveillance today is done using machine learning algorithms, the metadata is as important as the data itself in monitoring your internet activity and predicting your behavior.  A Cosmos-enabled blockchain ‘Nyx’ is used to keep track of the reputation of every mix node tracked in NYM tokens. The blockchain also runs the Nym mixnet smart contracts needed to reward the nodes, and all NYM token transactions by users and people pledging to run mix nodes.

2. What is the utility of the Nym network’s native token, NYM?

NYM tokens have three main use cases.  First, users pay a fee in NYM tokens to send their data through the mixnet. Second, users can also pledge NYM tokens to run a mix node. Mix nodes are then rewarded in NYM tokens based on their reputation and quality of service - doing the work of mixing packets and so providing privacy for end users. And if their mix node successfully mixes user traffic, their reputation increases as does their amount of NYM. Third, users can delegate to a mix node instead of running one themselves.

The inherent value of the token is therefore in its utility as granting access to network privacy and incentivizing the provision of network privacy. The crypto-economics are designed to incentives high quality privacy protection: the higher the quality of service, the more rewards a node receives and the better their reputation will be in the overall infrastructure.

3. What is a mixnet and how does the Nym network utilize the mix nodes to provide privacy for users of the network?

A mixnet is a decentralized network of computers arranged in a multi-layered format. Instead of a user sending a message through the internet, message packets are transformed into encrypted  “Sphinx packets” on their device. The Sphinx packet format renders all packets a uniform size so that they cannot be easily traced. Then, in each layer of the mixnet, computers that are called “mix nodes,” mix users' internet traffic with that of other users. This makes communications private from even the most sophisticated adversary with capabilities to watch the entire network because they can no longer trace packets and analyze patterns of communication.

4. Can you explain “proof of mixing” and how this novel concept rewards users of the Nym network?

The Nym mixnet is a proof-of-work system, where the work is “mixing” packets rather than mining Bitcoin. Mixing is a form of work, while the Nym mixnet  does use delegation of NYM to mix nodes, the quality of service and privacy provisioned by the Nym mixnet depends on the actual work done by mix nodes. We can measure that hard work by sending “measurement” traffic through the mix nodes, as mix nodes cannot distinguish measurement traffic from user traffic or cover traffic generated by users or even the Nym mixnet itself. This allows the network itself as a whole to determine which mix nodes are offline or working in a sub-par manner, and so not reward dysfunctional mix nodes in NYM, while the users that run mix nodes that work well should end up getting a higher reputation in terms of NYM.

5. How does the Nym network compare to VPNs (i.e., virtual private networks) and Tor?

The most broadly used network-level privacy solutions are VPNs (virtual private networks). Although VPNs provide the ability to hide the precise IP address of a user, they are a centralized solution.  This means that VPN providers can fully observe all network traffic between their users and the public internet, knowing exactly what services its users are accessing at any given time! Furthermore, VPNs offer no protection against powerful network adversaries that can observe the VPN, or a corrupt VPN provider that logs your IP address … as most of them do!

Tor tries to solve this surveillance problem by routing a ‘circuit’ through three relays, which provides better privacy than single-node VPNs. Tor encrypts traffic multiple times, so that only the final Tor node can see the destination. However, Tor’s anonymity properties can be defeated by an entity like an intelligence agency that is capable of monitoring the entire Tor network’s ‘entry’ and ‘exit’ nodes. This is because currently Tor does not add timing obfuscation or cover traffic to obscure the traffic patterns in circuits, which can be used to correlate flows and de-anonymize users.  However, Tor's design is expected to continue to be the best available for web-browsing and other stream-based traffic.

Nym can provide more powerful network-level privacy for cryptocurrency transactions, instant messaging, and any other message-based traffic. Unlike Tor, Nym's mixnet design provides network anonymity and resistance to surveillance, even in the face of adversaries capable of monitoring the entire network, by adding cover traffic and timing obfuscation. The Nym mixnet is decentralized, rather than operated by a trusted provider like a VPN, as it uses blockchain technology and economic incentives to decentralize the network. Nym node operators are incentivized to run nodes and provide a high quality of service and uptime by “proof of mixing.” Software updates are governed through community adoption as decisions are made by the node operators and token holders.

6. What does it mean for Nym to provide network-level privacy for all blockchains and applications? Can you give a few examples?

Apps, wallets and blockchains can use the Nym Mixnet in order to protect packets from network observers - whether they are broadcasted across a peer-to-peer network in a crypto transaction, or for a message sent between clients or any other type of application. Developers can run their applications or transactions via the mixnet to offer their users protection against network wide surveillance. In fact, the mixnet is designed such that the more applications and diversity of uses that it has, the better the privacy for everyone. This includes messaging apps, like Signal, or any blockchain and wallet. From Bitcoin to ZCash, no current “layer 1 blockchain” provides “layer 0 privacy” for the peer-to-peer broadcasts used in every transaction.

If you are interested in seeing Nym in action, the Nym mixnet works today with any application that supports the SOCKS5 interface for a local proxy of internet traffic, just like Tor. This means that Nym works today in many Bitcoin wallets, including those that support on-chain privacy using Liquid Confidential Transactions like Blockstream Green. The encrypted messaging application Keybase can also support Nym today, and adventurous users can even get Nym working on Firefox. Videos of how to get Nym working with apps can be found on the Nym YouTube channel and we have detailed documentation on our website.

We are of course excited about the focus coming back to privacy! Privacy, including early work on mixnets, was very much central to the early visions of the same cypherpunks that created Bitcoin, and it is great to see privacy returning as a topic of interest. Hopefully, privacy will become a cornerstone of the industry again like we saw in the late 1990s with Zero-Knowledge Systems.

Many of the ideals of decentralization, including autonomy and freedom, are simply not possible without establishing privacy as the default on the Internet. Given the digital totalization of our lives during COVID-19 and the increasingly popular idea of a ‘metaverse,’ there are more and more people concerned about the risks of what it means to put so much of our lives and interactions into a digital world that serves as a surveillance machine for governments and Silicon Valley. Surveillance can lead to profiling, targeting, and thus all manner of concrete harms, and we need tools like Nym to fight back. However, Nym is not the only tool needed for human freedom, and we look forward to other efforts taking off from Minimint for Bitcoin to “DarkFi” as well as seeing existing efforts like Tor and the Liquid federation continue to gain more traction in 2022. It’s now or never for privacy!

8. What is the best way for the community to get involved with Nym?

Currently users can download and install the Nym wallet, get NYMs use the wallet to pledge  a mix node or delegate to one and earn mixmining rewards. Users can also use the Nym’s SOCK5 proxy to send their data to the mixnet for network layer protection, just like Tor.    

There is an entire Get Involved section on the Nym  website which is updated with new calls to action over time. Also, Nym telegram is a good place to get to hear news about the growth of the Nym network.

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