Privacy Startup Nym Will Pay You in Bitcoin to Run Its Mixnet

Nym now allows bitcoin transactions and has an incentive program for people running its nodes. It is also enabling plugins that will allow users to plug in wallets and applications to run their traffic through its mixnet. 

Nym is a start-up software project working to obscure metadata tracking at a network level via the mixnet it enables. The mixnet itself is hosted by a decentralized network of volunteers.

On a normal internet network, most traffic can be tracked. Browsers like Tor offer a degree of protection against network surveillance by running traffic through a number of relays to obscure a user's location and usage. Such networks are still susceptible to metadata observation, however, meaning highly capable adversaries like the National Security Agency in the U.S. are able to see the timing of data packages being sent across a network to get an idea of what’s going on, even if they can’t see the actual contents of the packages. 

It’s like when the NSA was tracking alleged terrorists’ phone calls in the U.S. While they weren’t eavesdropping on the calls themselves, they were looking at those involved in the calls as well as the duration of the calls and other details. 

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A mix network or "mixnet," on the other hand, (taking its name from the proxy servers it employs, called “mixes”) obscures the metadata left behind when data passes through a network. 

“In a mixnet all the data packets get shuffled around, and then it's emitted in a different order than [how] they came in, with a small delay,” said Dave Hrycyszyn, CTO of Nym. “Basically a mixnet acts like a game of Yahtzee, where the dice are data packs, they get shaken around on the mixnet and come out in an entirely different manner than they went in." 

Doing that multiple times, said Hrycyszyn, makes it impossible for an attacker monitoring all the network traffic on the internet to see who's communicating with whom.

Nym has largely been focusing on its testnet, with node operators hosting them as a labor of love. Now, Nym will compensate operators using bitcoin. One way it offers rewards is through L-BTC on the Liquid sidechain using the Blockstream Green wallet. Liquid offers on-chain privacy using confidential transactions, which obscure the amounts being paid. For those who don’t have or want a Blockstream Green wallet, Nym will reward operators with BTC because Nym doesn’t want to force anyone to adopt a particular wallet. It will also be launching an incentivized bounty program to test the network's strength. 

Nym is also launching its own reputation system, NYMPH, which lets it and node operators keep track of which mixnodes are online and mixing data packs, even across multiple chains. 

The company is also adding greater functionality for running transactions and web traffic over its mixnet. 

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“Nym is plug-and-play replacement for Tor for any wallet that supports SOCKS5, or any application that supports SOCKS5,” said Nym CEO Harry Halpin.

For example, the Nym team has streamed video through Firefox on the network, though Halpin says that is still experimental at this point. 

SOCKS is a protocol that exchanges network packets between device and server via a proxy. 

“What Nym does is, just like Tor, start a SOCKS5 client up on your local machine. You send all your traffic from the app there. It transforms it into Sphinx packets (the same format Lightning uses, but invented for mixnets) and sends the traffic through the Nym mixnet,” he said. 

Adam Back, CEO of Blockstream, said in a statement that Nym’s mixnet technology looks promising as a modern upgrade to Tor and is a step forward in terms of privacy. 

“Network privacy is a crucial component to ensuring the financial privacy of Bitcoin users, so we were very happy to collaborate with Nym on its integration with Liquid,” he said. 

“Nym’s SOCKS5 architecture made adding Blockstream Green wallet support easy, and we’ll keep an eye on the project with a view to adding standalone support in the future.”

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These are important steps for mixnets, which aren’t in regular use right now and are traditionally fairly slow and clunky. The slowness is in part due to disrupting the timing of data packet delivery to foil network-level observers.

Nym recognizes that while this is important progress, it’s not a privacy panacea.  At least, not yet. 

“We do not recommend depending on the Nym mixnet for strong privacy yet,” said Hrycyszyn in a post announcing the updates. “We are working to get sender and receiver anonymity coded up, after which a full audit will be needed. But we are making very steady progress, and we invite you to try the mixnet today and give us feedback about how things go.”