Incentives prove successful for rapidly scaling the testnet of this full stack privacy system
Nym, the next generation of privacy infrastructure, announces that its “Finney” testnet has grown to over 8,000 Mix Nodes with a massive surge in nodes around the Miami Bitcoin conference. The success of the testnet makes it larger in terms of nodes than the Tor network, the most popular anonymous communication system, often used in Bitcoin wallets.
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Nym incorporates economic incentives as a means to scale and ensure the long term sustainability of the privacy network. This is an improvement on established privacy networks. Tor in particular relies primarily on donations, government funding, non-profit grants, and contracts. There is no economic incentive for operators which means volunteers have to cover the cost of running and maintaining the privacy system. In contrast, the Nym incentive scheme rewards mixnodes and validators that provide good quality of service, while encouraging the network to scale in response to demand.
The next step for Nym’s “Finney” testnet will be to implement the reward-sharing and proof of mixing algorithm into their whitepaper. In later releases Nym will make the validators completely permissionless. But first they need to make sure Nym’s giant mixnet contains only nodes providing the highest-quality of service and uptime. This will likely cause the testnet to shrink to a smaller number of high capacity nodes that can ensure a high quality of service. Participants will then be allowed to use delegated staking in order to vote for the best performing nodes.
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Delegated staking allows people who hold testnet token HAL, but who might not have the technical capacity to run a good mixnode, to participate by staking HALs on other mixnodes of their preference. The delegated stake represents reputation in the network and contributes to determining whether the node will be selected to perform the work of mixing packets and providing privacy.
Nym is further improving privacy systems by decentralising the usage of semi-centralised directory authorities. In the case of Tor, the entire network can be taken offline if these directory authorities are seized or even fall victim to a DDoS attack. And while Apple have recently launched a Tor-like relay system for privacy, their system also presents serious issues of centralisation, will not be available in many countries and is limited to web browsing. Unlike Tor and VPNs, Nym offers mixing packets on the individual level for all traffic, offering improved privacy by hiding the timing and volume of packets and so thwarting meta-data surveillance by even the most advanced adversaries.
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