One aspect that fascinates me of bitcoin and the crypto industry is to have many young founders and visionaries that are very approachable. You can just hit them up at meet-ups and they might even respond on Twitter. Singapore has a vibrant ecosystem and in the few months that I’m watching the space, I’ve already had the chance to chat with two of them - Binance’s Changpeng Zhao (CZ) and Bitcoin Cash evangelist Roger Ver. Every industry has its charismatic leaders and especially the emergence of a new technology, the great disruptions that come with it, are creating fascinating stories.
Finn Brunton’s Digital Cash is a book that tells the story of the anarchists, utopists and technologists behind the creation of bitcoin. The reader gets to know libertarians and “extropians”, a culture absorbed by science fiction fantasies and “west coast hedonic optimism”, but always with a deep-rooted scepticism of government. Back in the 80s, a loosely organised circle called the “Cypherpunks” formed a mailing list to discuss encryption, digital pseudonyms, black markets, psychedelics, experimental fiction and the collapse of governments, among other topics. Eric Hughes created the first anonymous remailer, Tim May wrote the crypto anarchist manifesto, Jude Milhon penned articles for the cyberpunk magazine Mondo 2000.
Electronic money and credit card usage had been on the rise for more than a decade and the group swiftly pointed out the surveillance problem that comes with it. States will be able to access these central payment networks and thereby control entire societies. Individuals can be profiled and cut off the system with ease. Personal privacy will soon be a thing of the past. “The real choice is between a total state and crypto anarchy,” declared Tim May.
David Chaum had a desire to preserve individual privacy and he even wanted to work together with the existing banking system. Chaum presented his ecash in 1983, as a tool for banks to turn existing currency into digital cash. Banks can create money on a physical card or in a digital wallet that can be emailed. When the account holder spends his money, public key cryptography will blind the transaction to both bank and merchant, although they can still check that the cash hasn’t been spent before. Chaum was running a pilot with Deutsche Bank in the 90s, but his company DigiCash folded at the end of the decade.
There was Phil Salin, a big fan of Austrian School economist Friedrich Hayek. Salin created the American Information Exchange, a marketplace for the free circulation of information and money, for people to trade intellectual property, patents, surveys, analysis. Xanadu, a sister project that was later acquired by the company Autodesk, had the ambition to digitise all human knowledge and to “monetise thought”. It was a network based on property and ownership, with royalties to be paid on every byte transmitted. Salin died of cancer in 1991 and was one of the first to have his head cryogenically frozen, to be revived when science would allow it. How to move money forward in time, to be able to use it in the future? That was one of the questions the Cypherpunks discussed.
Another participant in the list was Wikileaks-founder Julian Assange, conducting his first experiments with anonymised networks. In 1993, Tim May invented the “BlackNet”, a purpose-built “non-place” where operators won’t know their users and users won’t know who runs it. It deemed nation states and national security considerations as relics of the pre-cyberspace era. John Perry Barlow later published his Declaration of Independence of Cyberspace, telling the world elites in Davos that they are not welcome. In their tradition, Ross Ulbricht created the marketplace Silk Road, to be shut down by the US government in 2013. That was when many of us heard about bitcoin for the first time.
Several ideas contributed to its foundation. Adam Back’s Hashcash and the partial hash collision algorithm, the “proof-of-work” or processing time that miners have to contribute in order to earn bitcoin. Hal Finney further developed the idea into reusable proof-of-work, effectively creating token money. Nick Szabo came up with the concept of BitGold. He was the first to suggest decentral “smart contracts” in order to solve the double-spending problem. Wei Dai’s b-money incorporated most of these ideas, a decade before the actual Bitcoin was released. Satoshi Nakamoto’s white paper was quoting Beck, Dai and Ralph Merkle, the inventor of cryptographic hashing. Eventually, on 11 January 2009, Hal Finney tweeted “Running bitcoin”. And utopia suddenly became a reality.
Finn Brunton: Digital Cash. Published by Princeton University Press, 2019.
No comments:
Post a Comment