Nym is not a blockchain — but it is powered by one

How the Nym mixnet and the Nyx blockchain combined solve some of the toughest problems for privacy

Author: Nym

August 9, 20236 mins read

How the Nym mixnet and the Nyx blockchain combined solve some of the toughest problems for privacy

The Nym mixnet is often confused for a blockchain, but it is best understood as a separate infrastructure that is serviced by a blockchain, namely: Nyx. This article will go over the architecture of Nym and Nyx to clarify what each of these do and how, in combination, they solve some of the hardest problems for providing people with actual privacy — even in the age of AI.

Nym: the decentralised, incentivised privacy mixnet

The Nym ‘mixnet’ is a decentralised global privacy system that solves one of the core problems of the internet: that traffic patterns are entirely visible.

Translations: Русский // 日本

Governments and large tech companies able to observe large parts of network traffic can record and analyse traffic patterns, which often reveal more than even the content of a message. These small bits of information are like digital footprints left behind after every online interaction. They don’t mean much in their own right but when collated, they are used to build up revealing user patterns and profiles that can be exploited and deanonymise people.

To solve this problem, the Nym mixnet encrypts internet traffic into identically looking packets. These packets are sent through three layers of what are called mix ‘nodes’ in a series of ‘hops’ at randomised times and intervals, before finally being reassembled and decrypted on the receiving end.

The mixnet thereby protects almost any type of internet traffic as it is routed through open networks, making tracking near-impossible for adversaries. The mixnet protects people’s IP addresses and metadata about their given location, the timing of messages, and the kinds of device they are using, as well as communication patterns from observers.

The Nym mixnet is trustless, decentralised and permissionless.

‘Trustless’ means that you do not need to trust any aspect of the infrastructure with your data. All content is encrypted in several layers. Each node only knows the next hop in the network and never holds any information that can deanonymise people.

‘Decentralised’ means that the mixnet is operated independently and collaboratively by node operators and token holders all over the world.

‘Permissionless’ means anyone can join as an operator or token staker and participate in running the network. Permissionlessness is essential for the network to be truly decentralised as it means there is no centralised authority that can determine who joins as a node operator.

Although in theory a mixnet could run without a blockchain, it would run into a major problem: in order to know which ‘nodes’ are operating in the network so that it can send traffic through them, something called a ‘directory authority’ is needed. This directory authority helps systems understand which nodes are operational and where traffic can be distributed. But if this information is stored in a single centralised location, it becomes more vulnerable to attack or compromise, and for observers of the network to monitor traffic.

Achieving a decentralised and permissionless mixnet is no small feat and this is where the Nyx blockchain comes in.

What is the Nyx blockchain?

With her black robe studded with colourful stars, the ancient Greeks saw the goddess of the nighttime, Nyx, as the precursor to life itself. It’s this celestial deity of umbra and shadows that the Nyx blockchain is named for. And this Nyx blockchain solves a set of key problems for the Nym mixnet:

Ensuring that the mixnet network directory is decentralised and permissionless.
Operating the token economics of the mixnet to incentivise and reward operators for providing privacy instead of grabbing user data.
Facilitating the vesting of the NYM token.

Nyx is a general purpose layer-1 production-ready blockchain built on the Cosmos SDK. It is written to Rust, and compiled to WebAssembly, and mints all NYM tokens. Like Ethereum addresses begin with ‘0x’, all Nyx addresses begin with ‘n’.

The Nyx blockchain is integral to ensuring the Nym mixnet is decentralised and permissionless. And it does so through clever token economic design.

The Nyx blockchain provides the decentralised directory authority of Nym mix nodes via smart contracts that keep tabs on which mix nodes have bonded to the network.

Here’s what the process looks like.

When operators spin up the Nym mixnet code, the software will remain inactive until the operator ‘bonds’ NYM utility tokens via their Nym wallet or CLI. Operators must bond these tokens to actually join the network, route traffic, and ultimately earn rewards.

This ‘bond’ signals a smart contract on the Nyx blockchain that the operator is live on the mixnet. They will then have the chance to be selected to perform work in the mixnet through a selection algorithm that hourly checks the node’s reputation and performance and changes the topology of the mixnet ‘active’ set accordingly. This means the pathways of the mixnet are continuously changing, making it near impossible for an attacker to establish a malicious path of nodes.

Operators are then rewarded in NYM tokens for the amount of work they have performed. In order to increase their chances of being in the active set, node operators can increase their reputation by attracting stake from NYM token holders, who in return will earn a share of operator rewards.

No user data ever touches the blockchain. The Nyx blockchain only manages the directory of nodes and their delegations and rewards.

In summary:

Nym is a mixnet that mixes up and obfuscates user traffic. It is operated by a global system of mix nodes, which route this traffic.
Nyx is a blockchain that runs the smart contracts that manage the Nym token and token economics. The token economics serve as a reputation and reward system and enables a fully decentralised and permissionless directory authority.