😈 Fight for your right

“Any sufficiently advanced technology is indistinguishable from magic.”

That’s the third of writer Arthur C. Clarke’s famous laws, which first appeared in a 1968 letter to Science outlining his thoughts on whether aliens walk among us. 

Interstellar travel, to Clarke, was nothing particularly impressive. “A rather simple engineering accomplishment, to be expected within a mere two or three centuries of the control of thermonuclear fusion.”

“The real mystery is the apparent absence of genuine UFOs.”

But let’s push this idea further. Powerful tech itself isn’t magic, rather it's the stubborn creative spirit of those who build it that’s supernatural.

WIRED goes Cypherpunk

Thirty-two years ago this week, in May 1993, WIRED released its second-ever print edition featuring three legendary cypherpunks on the cover: Tim May, Eric Hughes and John Gilmore.

Steven Levy’s piece, “Crypto Rebels,” handily documents the genesis of the Cypherpunk movement, starting almost two decades earlier in 1975, when Whitfield Diffie led the creation of public-key cryptography alongside Martin Hellman and Ralph Merkle.

Until then, the US government codebreakers had dominated cryptography through the National Security Agency (NSA). Cryptographic tools were considered weapons under the Arms Regulation law, “right alongside tanks and bomber planes,” Levy wrote.

The act of giving regular citizens access to “military-grade” privacy tech like public-key cryptography — which would allow information to be stored trustlessly and sent securely over unsecure networks — was then a brave act of defiance for personal liberty. A fight against government tyranny.

Public-key cryptography would go on to be a cornerstone of the modern internet, protecting emails, bank accounts, website interactions among many other online matters, and, of course, everyone’s bitcoin.

Or as late The Codebreakers author David Kahn wrote, public-key cryptography was the “most revolutionary new concept in the field since … the Renaissance.” 

Around the same time, MIT scientists Rivest, Shamir and Adleman developed a separate public-key method, RSA, which had far greater potential than the government-created Data Encryption Standard, which didn’t use public keys at all.

WIRED’s article also detailed the plight of cryptographer Phil Zimmermann in the wake of his invention of Pretty Good Privacy (PGP) — a mighty free alternative to RSA that utilized RSA patented technology without permission.

Zimmermann went to great lengths to build PGP, missing five mortgage payments and “coming within an inch” of losing his home. But he wasn’t selling the software, he simply released it into the wild (internet bulletin boards), “like thousands of dandelion seeds blowing in the wind,” he wrote.

Still, the US government made Zimmermann the target of a criminal investigation for munitions export without a license, which was still ongoing at the time of WIRED’s piece.

Two years later, Zimmermann published the entire PGP source code in a hardback book released by MIT Press — allowing anyone in the world to build their own privacy tech all by themselves. 

Exporting books is a First Amendment right that should trump any restrictions on the exportation of cryptographic software. The investigation was eventually closed and the Feds brought no charges.

To say that there might be no Bitcoin without the Cypherpunks is a severe understatement. Satoshi Nakamoto himself may very well be underneath one of the many masks featured in WIRED’s article.

Here’s how deep the parallels go: at multiple points in Levy’s writing, one could easily sub Bitcoin-related terms into any number of sentences describing the fight for accessible cryptography:

“Diffie recognized that the solution rested in a decentralized system in which each person held the literal key to his or her own privacy financial sovereignty.”

“In the Cypherpunk mind, cryptography money is too important to leave to governments or even well-meaning companies.”

"You can have my encryption algorithm… bitcoins, when you pry my cold dead fingers from my private key."

I’ll leave you to read the full piece, which is still available online, if nothing more than to reinforce the significance of the “crypto” in “cryptocurrency.” After all, very real individuals fought years for its existence.

— David

Bitcoin is indeed a manifestation of the “ultimate Crypto Anarchy tool” that Levy described in his article, which ran almost 16 years before Bitcoin’s first block.

So, perhaps the epic adoption rate of Bitcoin on Wall Street and among other hyper-capitalized traditional finance players might have less to do with technology, and more to do with number-go-up. But is that a problem?

“If you’re threat modeling Bitcoin and you’re trying to understand these new market entrants, these suit-coiners, they may not be aligned with the core ethos of Bitcoin, the best thing you can do is hold your own keys and run your own node.”

That’s sage advice from Rob Hamilton of Bitcoin insurance startup AnchorWatch on today’s Supply Shock episode.

“The actual risk is not the financialization of the paper wrapper of these Bitcoin companies, it’s actually who is ultimately running the keys and running the nodes on behalf of these companies… their ability to disproportionately affect the network in a time of tension or forking [is the] threat modelling that I look through.”

Check out the latest Supply Shock episode on YouTube, Spotify and Apple.

• The latest statue honoring Satoshi has been unveiled in the Italian town of Fornelli.

• Morgan Stanley’s E*Trade platform could support bitcoin trading starting next year.

• A documentary film is to be made about a UK man's long-running fight to recover 8,000 BTC ($772 million) mistakenly thrown in the garbage. Call it a happy ending.