💾 90s crypto wars

Painters paint, sculptors sculpt and cryptographers code.

For millennia, creators have fought to express themselves through their chosen mediums. 

Around the year 430 BC, Greek sculptor Phidias is famously said to have died in prison after being charged with impiety due to his art (with a side of treacherous politics).

Phidias had sculpted himself and statesman Pericles onto the shield of Athena on the Athena Parthenos, an unforgivable act of hubris in front of the gods.

Nearly two and a half thousand years later, cryptographer Daniel Bernstein fought the US government over his constitutional right to express himself through code — and won.

Code is speech

Twenty-six years ago today, Judge Marilyn Patel ruled that computer code should be considered speech and thus protected under the First Amendment, even if that code represented powerful encryption technology.

Bernstein had sued the US State Department and subsequently the Department of Commerce in what Judge Patel later described as “part political expression.”

As we touched on in an email last week, the US government at the time classed cryptographic tools with a key size larger than 40 bits as weapons.

This meant anyone seeking to publish or otherwise make cryptography software available outside the US had to register as an arms dealer — including doctoral candidates studying mathematics at UC Berkeley like Bernstein.

So, when Bernstein approached the State Department about publishing the source code, instructions and academic paper describing a new encryption method called Snuffle, authorities labeled the work a “munition” under the International Traffic in Arms Regulations. 

But the imposition of any licensing regime on code — the medium through which cryptographers express their ideas, thoughts and theories — was unconstitutional, in Bernstein’s view. The Electronic Frontier Foundation (EFF) then sponsored his lawsuit, in what was its second major case after the Steve Jackson Games in the early ‘90s.

Courts sided with Bernstein and the EFF in a landmark decision about a year later, ruling that the government must protect cryptographers’ freedom to code. It’s their language. 

The case paved the way for strong encryption to be readily applied to e-commerce and all manner of private enterprise, thanks in no small part to the forward-thinking Judge Patel. 

Patel wrote: “By utilizing source code, a cryptographer can express algorithmic ideas with precision and methodological rigor that is otherwise difficult to achieve… The need for precisely articulated hypotheses and formal empirical testing, of course, is not unique to the science of cryptography; it appears, however, that in this field, source code is the preferred means to these ends.”

It’s clear that without the Bernstein ruling, the development and release of Bitcoin might have been seriously slowed. After all, Satoshi (if they were in the US) would’ve needed to acquire a license to share Bitcoin source code, immediately doxxing them with the government. How convenient!

Luckily, Bernstein chose to fight.

— David

“I believe it was Max Kaiser that said ‘the government is not getting into Bitcoin. Bitcoin is getting into the government,’ and I think that’s a good reflection of what we’re seeing here.”

That’s Adam Simecka, Manna Bitcoin Wallet founder, on today’s Supply Shock podcast episode. Rizzo had asked what to make of Roswell, NM becoming the first US city to steward a strategic bitcoin reserve.

Simecka and Rizzo were joined by Guy Malone, the lead citizen brain who pushed Roswell officials to formally accept a 0.0305 BTC ($2,860) donation late last month that would seed the city’s reserve.

The city’s bitcoin coffers have since grown to more than 0.167 BTC ($15,700), with an additional 20 or so UTXOs flowing in over the past week.

Catch the latest Supply Shock on YouTube, Spotify or Apple.

• Florida has indefinitely postponed two strategic bitcoin reserve bills, following last week’s veto of a similar bill by Arizona Governor Katie Hobbs.

• Bernstein expects corporate treasuries will acquire $330 billion BTC by the end of 2029.

• Charlie Shrem wants to revive the Bitcoin faucets from the early 2010s.