Technology × Freedom

The Origin of Cypherpunk and Crypto-Anarchy

July 19, 2017 nitsuj

We’ve thrown around the term “cypherpunk” (and the synonym “crypto-anarchy”) a few times in the past – most notably in invisiblehand’s Anticapitalism and the Cypherpunk Movement – without really explaining its origin. While it has become more anticapitalist over the years, it started out very libertarian and “anarcho-capitalist” (versus just “anarchist”) in philosophy.

Thomas Rid, in a fascinating excerpt from his book Rise of the Machines: A Cybernetic History, dives deep into the origin of cypherpunk and highlights this theme:

For the libertarian minded, crypto anarchy meant that “men with guns” could not be brought in to interfere with transactions that all participants mutually agreed on. Taking violence out of the equation had two wide-reaching consequences. Two types of men with guns would find crypto hard to cope with. The first were the police and agents of federal law enforcement. No longer would they be able to trace and find those who refused to declare income or deal in illegal goods. The state, in short, would lose a good deal of its coercive power. If financial transactions became untraceable, enforcing taxation would be impossible. And that, of course, was a good thing. “One thing is for sure,” [Timothy] May told Kevin Kelly of the Whole Earth Review already in late 1992, “long-term, this stuff nukes tax collection.”

But crypto wouldn’t affect only the government and the rule of law. The other kinds of men with guns were criminals. And the same applied to them. Criminals would also lose their power to coerce others with threats of physical violence. If the buyers of drugs, for instance, would be untraceable not just for the Feds but also for gangs, then markets that were chronically plagued by violence and abuse would become nonviolent and abuse would stop. Anonymously ordering LSD online was much less risky than going to dodgy street corners and talking up shady pushers.

Strong crypto, made widely available, enabled totally anonymous, unlinkable, and untraceable exchanges between parties who had never met and who would never meet. The anarchists saw it as a logical consequence that these interactions would always be voluntary: since communications were untraceable and unknown, nobody could be coerced into involuntary behavior. “This has profound implications for the conventional approach of using the threat of force,” May argued in the Cyphernomicon. It didn’t matter if the threat of force would come from governments or from criminals or even from companies: “Threats of force will fail.”

The whole read is glorious and added a slew of people, ideas, and books to my list for further investigation.

Of particular note is the importance “digital cash” has been to the movement from the beginning. Now that cryptocurrency is upon us, are we closer than ever to seeing the cypherpunk philosophy fully realized? I wonder what Tim May would say.